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January 30, 2014


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Congrats on having put so much thought into managing your financial life. Wish i had thought it all through when i was 25.
I completely agree that you have a unique opportunity to put yourselves on a good financial footing right now. I would try to save as much as you can now. If you refine your budget you could probably save another $500 a month by reducing groceries, eating out and massages. If you put that money in a Roth ira, that would create a huge advantage for you. Hold off on adding that new car if you can. The true TCO fo cars are so much more than people realize.
Life insurance might not be needed until you start a family since you are both able bodied and working. I have term insurance to cover me till my kids are 20 which should have them mostly through college.
Good luck and once again congrats on doing so well.

You're gonna feel rich when hubby gets a full time job, nice work. If you can live off of one salary going forward (you almost live off of just yours now), you'll not only build that savings in a hurry but when it comes time to start the family you'll have choices as to staying home, etc that is hard to otherwise make work.

Good that you've created a great start for yourselves.

A simple will is nice since you plan to accumulate a lot of assets, but as already mentioned I don't see the need for life insurance until you plan on bringing kids into the mix.

Don't understand why you included the 401K employer match as income. It doesn't seem like it's really monthly income you can draw from to pay bills and I would generally just let it be covered in the retirement balance for networth considerations.

Otherwise, while you could tweek the budget to get more savings, if you can keep the current expenses and double your income that should be more than sufficient. You'll have to decide if that's going to be enough to meet your goals.

Thanks for the feedback and I look forward to more comments.

Re life insurance: I still haven't done it and I still am debating it myself.
My one concern would be if one of us were to pass away, it'd be tight with our monthly bills and we'd have to go back to work very soon to make things work. We've increased our cash reserves to ~15k recently so maybe that partially alleviates that concern.

We are continuing to work on reducing our spending with groceries, eating out, allowances, and miscellaneous spending. We've had a small amount of success but we don't want to get the point where it feels like deprivation/needless obsession.

I include the 401K match just so I can see how much we're increasing our net worth each year through our own contributions/savings. I also like seeing the % not spent there-- according to this calculator:

With our current lifestyle, we'd need to work for 27 more years before retirement. That's longer than I've been alive! Just numbers, but hey, it entertains/motivates me.

And yes, I'm looking forward to my husband graduating. We ARE going to feel rich! Hopefully we can avoid too much lifestyle inflation and just feel rich with a fast increasing net worth.

Hi JV:

Despite your initials--- I would put you on the VARSITY team. (sorry-- that was bad....)

I agree that you are doing great and I also wish that I had been so astute with money at your age. I really did not settle down ( read: stop spending foolishly) until I got married at about 28 years old. My wife still kids around that she loved dating me cause we always were going to shows and concerts and eating at great restaurants etc.. BUT after we were married I became much more frugal. The pressure of having a wife and kids made me really stop and think.

At your age--- time is your best friend. The magic of compound interest is simply amazing. You have 40 years until you are 65 and if you play your cards right-- you will be a multimillionaire. Its just math. And you are right that cutting expenses and savings itself is more productive than "investing" until your net worth gets rather high.
Save as much as possible-- and grow your net worth You will not regret it. Regarding investing---- it is as much about NOT LOSING money as it is about making it. Invest carefully. Keep fees and volatility as low as possible.

It seems like you are headed in the right direction.

Best of luck to you.

Millionaire #19 --

Thanks for the kind words.

Hah your story is funny. We got a lot more thrifty once we got married too. An overwhelming amount of material goods coming in when our apartment was already packed and money flying out with wedding expenses made us regroup.

We are very blessed. I do want to be a good steward of all we've been given and hopefully give back in a big way later in our lives.

So happy to see that you have found MMM. The forums there are a great source for inspiration and tips for saving $. I think you will get more value out of creating wills than you will from life insurance at this point.

With that margin, if you actually want to give to charity, there's zero excuse for you not to be doing so. If you don't treat it as a priority, it won't become one in your lives going forward. Something to think about.

The two of you are really on track to have a great life.
My wife and I are now 80 and 79 respectively and have been happily retired for 22 years. I think you will find that my comments are going to be very encouraging.

We emigrated from England in 1956 and finally ended up in Silicon Valley, California in 1960 where I worked as an aerospace engineer and my wife as a pre-school teacher. In retrospect we didn't plan our family the way you have planned. Birth control methods were rather hit and miss in our day, our first child, a girl, came along as a big surprise when my wife was 25, the second, another girl was planned and arrived when she was 27, and the third, a boy, was unplanned and arrived when she was 30, that's when I made sure he was going to be the last.

Another thing that we did that probably wasn't a good idea at the time was to buy a very nice, new, home in 1963. We also spent way too much furnishing it with everything top of the line instead of making do and building up our savings.

However, in the end everything turned out great. We sold the house after 14 years for 3.3 times what we paid for it, then bought a much nicer one that is now worth more than 16 times what we sold our first home for.

Other things that worked out well were that we both had jobs that provided retirement pensions and were never unemployed. Finally, after retiring I taught myself a lot about investing in the market and ran right into the bubble that I was able to ride all the way to the very top when I bailed out over 4 trading days. Ever since I have been in stable income investments that provide a very stress free ride. I was also lucky that my job was in the defense industry and provided good raises and promotions right throught until the Cold War ended just befor I retired.

Bottom line. There are many things over which you have very little control - fortunately most of those things turned out to be far better than I could have ever hoped for, i.e. the economy, the housing bubble, and the bubble. You and your wife are well educated, making all the right decisions and in my opinion have a great life ahead of you. I would bet money that you will retire as multi-millionaires.

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