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December 05, 2013


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Wow, feels like you made all the right moves! Where around DC did you buy and is that a down market or something else that got you that opportunity?

Thanks for sharing your story. Are you planning early retirement or any other big plans for the future?

You're on a great career path - your parents must be very proud of you.

Like you my third job was the one that I ended spending 32 years at. I also cultivated an excellent relationship with my Manager, Division Manager, and the Chief Scientist, and did my utmost to please them. My degrees were BS and MS since I wanted to stay in the technical field. It's very important that you are happy in your work and all of the people that you work with.

We were married in 1956, ended up having 3 children, born in 1958, 1960, and 1963 and everything has worked out beautifully for us. My wife went back to work as soon as the children could be left.

Buying a home is also a wise decision when you plan to stay put, and as you continue to prosper there will come a time when you will want to step up to a nicer home in an even nicer neighborhood. We only ever bought two homes and that has worked out perfectly for us.

Yours is probably the best profile that I have read and I think you are on a great path to even greater prosperity. Above all, keep your wife happy, treat her very well, and you should have a great life and a very long and happy marriage. We always felt that for the children's sake it was essential to keep our relationship very happy so we used to get a babysitter most weeks and have a date night out.

@Luis -- Thanks! We were able to purchase within DC proper. I wouldn't call it a 'down' market that gave us the opportunity to purchase. It was more of the decision that we could get a mortgage that was only about $100 more than our 1BR apartment rent, so it made sense for us at the time knowing we would be trying to have a child in the near future. The market in DC seems to be well insulated from the market throughout the country as a whole -- some people attribute this to the job stability that the Federal Government provides.

@VA -- At this time, I don't have any formal plans for an early retirement. We are still in the wealth accumulation phase, so many more years to contribute to savings before we start drawing on them in a retirement fashion. Ideally, I would like to have enough to feel comfortable to downshift my career in my early/mid-50's, and maybe work an abbreviated ~20hrs/week (possibly consulting, or teaching?) Lots of possibilities at this point.

@Old Limey -- Thanks for the kind words! I have been a long time reader of FMF and always enjoy your comments, thoughts, and experiences. I absolutely agree with you that you should be happy in your work along with your coworkers to make the most of your career (and earning potential). Great tip for getting a weekly babysitter to have a dedicated date night. Our baby is almost 6 months old and the date nights have been few and far between so far, but I don't think either of us mind (yet!) as we love spending time as a family. We also took the mindset that we wouldn't stay at home with the baby, so it is common for all 3 of us to be out and about (at restaurants, friends, stores, etc). It has worked well so far!

You've gotten great raises in the past 5 years. Even without that big raise for 2010 your increases are about double the average.

Great job all around! Like you, I am building a dividend stock portfolio in a brokerage account, and I would like to hear more about your strategy on that point. For comparison, our dividend stocks brought in about $10/month last year, and we'll be at about $15/month this year.

Do you have a set amount you plan to invest each month in dividend stocks?

How does that compare in size to your monthly investment in 401k/IRAs?

Do you have a minimum dollar amount you buy to keep transaction costs down?

Essentially, a dividend stock portfolio is like running your own little mutual fund. Are you aiming for a portfolio of a certain number of stocks?

How do you pick stocks to be in the dividend portfolio?

Thanks for any insights you can share.

Great job on putting down your career/financial path. Best one in the series. You seemed pretty organized and disciplined with your finances. What have you doing to get comfortable with upper management. My profile is pretty close to yours. I have been working on building rapport with Management bur not happy with the results yet

Congratulations on your career success, and thanks for sharing the details. Your path and mine have quite a few similarities, which is always interesting to read.

I definitely agree with many of your points regarding enjoying what you do, putting in the extra effort, and keeping the big picture in mind during projects. I'm in the IT field as well, and it's easy to set yourself apart from many peers by having a problem solving mentality rather than a simple "technology is cool so we should use it" thought process.

Good luck to you going forward.


@jim -- Yes, I have been fairly happy with my overall pay raises and bonuses over the past few years, keeping in mind what the economy has been doing. I would like to think it is attributed to being a top performer :)


@PJ -- Thanks! I've had pretty good success thus far with my dividend portfolio. I'm sure it could go into it's own dedicated FMF series, but i'll try to answer your questions as best as possible :-)

We don't have an exact amount we invest each month into the dividend portfolio -- we are generally able to save between $3000-$4000 each month after all expenses are paid. So, as an example, some months we will invest $2500 and save $500 into targeted savings (i.e. upcoming vacation or upcoming large purchase). In 2011, we averaged $600/month in contributions, 2012 average was $1100/month, 2013 is averaging $2100/month.

I max out my 401k at $17,500/year ($1458/month). So far this year I have averaged more in monthly contributions to the dividend portfolio compared to the 401k contributions.

I generally look to make 1 trade each month. If I am torn between 2 companies, I will split it 50/50 and buy both with the contributions. Transaction cost is $7/trade, so investing $2000 in one trade with a $7 commission is a one time 0.35% fee. If I had to set a ceiling on it, I would say try to make the fee lower that 0.5% per transaction ($1400 trade with a $7 commission)

I aim to have each company not to overtake more than 5% of the portfolio -- so that leaves me to target having approximately 20 companies to hold/track.

Some of the criteria for selecting a stock for me, (1) Long history of yearly dividend increases, at least 10+ years, (2) Low payout ratio, (3) moderate entry yield, 2.5%-5%, (4) competitive P/E ratio compared to industry, (5) positive EPS over past 1/3/5 years, (6) positive revenue growth over past 1/3/5 years.


@Sam -- Thanks for the kind words. I would say that building rapport with management does not seem to happen quickly or with ease, but is worth the effort if you want to advance. Some things that have worked well for me in recent years;

(1) Consistency & Dependability; if you commit to doing something, do it! An example would be status reports biweekly or monthly, it might not pay off immediately but it will build a good work trail to tie your name to. If you want to be the "go to" person that gets recognized you will need to be dependable.

(2) Brevity; the higher up in management, the less time they will have to dedicate to any one person, so make your point quickly and succinctly. From my experience all the long/wordy emails do not get read - if you can't get away from a long email, provide a 1-2 sentence summary at the very top so they can scan it quickly to get the gist of the content. Also using bold/underline helps draw attention to important points.

(3) Quantify your efforts; the bottom line matters the most to upper management. Figure out a way to quantify your efforts (if you can translate anything to a dollar amount that gets the most attention) and don't be shy about letting management know how much you have saved the company by reducing some costs, or how much you have increased revenue by closing an unexpected contract.

Great job! I'm your age and earn a similar amount, although I don't have a $4k gap between income and expenses, unfortunately. I'd be interested to see a list of your monthly expenses. You should probably contribute to a Roth IRA if you're not already doing so. I'd even suggest lowering your 401k contribution, if necessary, to contribute to the Roth IRA. Finally, you're clearly a leader and well written. Keep up the good work and remember to consider those who are less fortunate.

@SR -- Thanks! With risk of turning this into a FMF Reader Profile, I'll just say our average monthly surplus is between $3000-$4000 a month. Some months are lower when we have higher expenses (i.e. around the holidays, or when wife was on maternity) and some months are higher when we have increased income (i.e. bonuses from both wife and I).

I would love to contribute to a Roth IRA (and I have in the past), but currently our joint income surpasses the limit for contributions. However, I do contribute to both a Traditional 401k and Roth 401k to split some tax liabilities for the future.

FYI, there are no limits on Roth conversions. You can get a back door Roth IRA by contributing to a non-deductible (regular) IRA and then rolling it over to a Roth. If you have other IRA funds then you have pay taxes on a ratio of the conversation. However, if you have no other pre-tax traditional IRAs then no-tax (except on any gains). I do this every year -- rolling it over the day after I make the contribution.

Perhaps not an issue for #8 since he has Roth 401K options (I don't).

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