My Timeline for FIRE

Introduction:

This page will serve as my timeline for FIRE goals as well as major career and life events.

I will continue to update this over time and include my estimated completion dates (ECD) for the next goal.

Timeline:

May 2016 – Graduated high school.

• Net Worth – basically 0, no debts, maybe around $200-$300 from working part time at Target.
  
• Summary – This is where everything kind of gets started. There’s no real finances at play yet, but I certainly used all of my part-time money on leisure activities, tech, and my girlfriend.

August 2016 to May 2020 – College.

• Net Worth – Started going negative at the beginning, ended school at – $80,000. This is where my student loans start accumulating. Loans were taken out for school (tuition, room and board, meal plans).
  
  After freshman year, loans were taken out for rent and general living expenses as well, as I didn’t make enough at Target to afford rent with any sort of lifestyle. Hours were inconsistent as well.
  
  Looking back, I probably could have penny pinched and worked more hours, but some of my best memories were made in college and most of my best friends were as well. No regrets.
  
• Major Spending – I also purchased (somewhat regrettably) a car in April 2018. I bought a 2017 Nissan Juke certified pre-owned for around $24,000 after everything was said in done. I was previously driving a Honda CRZ which only sat 2 people. This car was paid for (kind of) by my great grandfather who set aside money for his grandchildren before he passed, although the actual money was used during my parents divorce many year prior to me getting this car. The car was around $12,000 when I received it at 16 and probably had around $1,000 to $2,000 by the time I purchased the Juke.
  
• Income – I was actually a sperm donor for a bit during college. This was earning me around $1800 a month with a backpay of about $2000 every 6 months when blood work was done. These funds went to paying off my car quicker and afforded me to quit my part-time work for a few months. I did this for about a year.
  
  Otherwise I was still working in retail making somewhere from $9 – $13 an hour with no more than 35 hours a week during holiday periods.
  
• Summary and Lessons Learned – I ended college by paying off all of my credit card debt before I moved to Texas. In total I had around $60,000 student loans with about 50% from the government and 50% in private loans. My car would’ve had somewhere between $18,000 to $20,000 left on the loan at this point in time.
  
  In an ideal (min/max) situation, it would’ve been smarter to take on the car loan from my mom and just pay off my first car, leaving me more cash down the road. There was some sort of timeline related to my mom’s finances which incentivized a purchase, but I can’t say this was my best decision.

June 2020 to April 2022 – First full-time job as a manager in a fulfillment center.

• Net Worth – Starting off I had paid all of my credit card debt off, but this quickly changed as I accumulated furniture, went out too often, and saw a chiropractor for a back injury from work. By the end of this period I had accumulated over $20,000 in credit card debt with $11,000 of that consolidated into a loan with my credit union at a rate of 15%, far lower than the cost of keeping it on a credit card. By the end of this period I was up to $100,000 in debt – my financial trough.
  
• Major Spending – My expenses were:
  • Rent: 1500 a month living in a single-bedroom apartment too close to downtown for my own good.
  • Car – $350 a month
  • Student Loans – Government loans were actually paused, so $0 for those. Private loans were ~$440 a month.
  • Credit Card Payments – I can’t quite remember how much this was, and none of my bank statements or data goes back this far, but this would’ve been a large chunk of my monthly expenses.
  • Consolidation Loan Payment – $305 a month.
  • Chiropractor and medical expenses – this was anywhere from $100 – $200 a visit if I remember correctly. After my deductible of $2000, this was still hitting me for at least $50-$75 a visit. I had to stop due to it just simply not working and financially draining me – all of this was on credit cards. I was advised to go 3 times a week, and did anywhere from that amount to at least twice a week in order for it to be “effective”.
    
• Income – At my lowest I was taking home around 3500 a month, with the match (2% match on 4% Roth 401K) which would’ve put this around 3346.58 a month. After 1 promotion in the fulfillment center, this was only up to 3848.78 a month. With the expenses above, I was netting anywhere from $750 a month to $1253 before the other credit card payments or the medical expenses. This was a rough period for me.
  
• Summary and Lessons Learned – This period taught me a lot financially and about life. I moved to Texas alone, with no family or friends out there. I spent more in order to be social, but also was just in a terrible financial situation. Needless to say these motivators are the reason I pursued a role in tech so passionately. I interviewed for over 5 different roles and it wasn’t until the last one that I found some support within my company to help me make the transition from non-tech to tech. I started that new role in April 2022.
  
  If I could change anything, I think it would be my outlook on life. If I could see the brighter days ahead, I could’ve enjoyed the my time more and not went into such dark moments which only came with more spending and bad habits like drugs and alcohol. This is all a part of growth.
  
  If I were smarter, I’d start with a real doctor and get recommendations to actually improve my health and not just therapy and adjustments which made no difference and cost me money I didn’t have.
  
  Also, don’t buy fancy furniture. It’s just not worth it in the long run and especially when you have to go into debt for it.

The Major Events

Everything beyond the recaps above is ongoing, and there’s not much to look back on now that the income situation has been fixed. From here I will recap milestones I’ve achieved and the months I achieved them. Most of my credit card debts were paid off with stock options I got from my company. If you’ve done any bit of math at all, even the best stocks don’t outpace the rate of debt you’ll accumulate from credit cards. Sure, a stock could soar + 50%m or it might not – the credit card interest is guaranteed.

October 2022 – Private student loans refinanced.

I was able to refinance my private student loans, which had a weighted average interest rate north of 7%, to a singular loan and payment of $505, a 5-year term, at 5.85% interest. I also got 3 months off of payments when I made this move. This was the best move to make.

The only re-consideration would be regarding government loans. It was at this time we were being told that loans would be forgiven. If this had happened, $20,000 of my loans would have been forgiven as I had Pell grants and qualified for the full amount. Unfortunately it didn’t.

Hindsight 20/20, would you have assumed the government would fail to fulfill their promises and refinanced your government student loans? It’s a big risk if the government did come through, as you’re now $20K more in debt than you should be with no reverse card.

November 2022 – Consolidation Loan WIPED.

I started this consolidation loan in May 2021 with a 5-year term and finished it off November 2022. I paid off this loan first as I had consolidated most of my credit cards to a 0% interest credit card which I was on time to meet.

July 2023 – Credit Cards WIPED.

I received my largest stock vest to date (at the time) which after taxes was around $8K. I used this to finish off my credit card debts. That was a good feeling. This meant I could start my emergency fund.

May 2024 – Emergency Fund Goal Met.

I saved a bit each month and used some stock vests to finish off my emergency fund of $15K, between 5-6 months of living expenses. The freedom I currently feel from achieving this goal is unmatched.

With so many tech layoffs happening, I could easily wake up one day and not be able to login. Having this cushion eases those fears as I am confident I could find another job within 2-3 months of such an event. I’m not currently worried about that possibility anyway, but no one is when that happens.

June 2024 – Net Worth Positive.

For the first time since I started taking on student loans in 2016, I reached positive net worth. To me this is really the beginning. While I was making progress before, something about seeing my apps show a positive net worth changes how I view it. Seeing the mountain of debt to climb before made it feel like I was nowhere in sight of financial progress or freedom, but it feels different now.

Of course, we aren’t out of the hole yet as my net worth is only barely positive, but knowing that every dollar added to my savings is pushing that number closer to $10K, and then $100K, and so on, feels really good.

July 2024 – Car Paid Off.

This month I finally paid off a vehicle for the first time. This is the first vehicle I’ve ever had a loan on and it’s freeing to be done with the payments. The car only has 70K miles on it, so I foresee being able to drive it for at least another 5-10 years, depending on how much driving I do. As a Nissan I am happy to take it to 200K miles and beyond.

This milestone will help improve my savings rate and increase my debt payments on student loans.

August 2024 – Priority Changes (Roth 401K, House Saving)

This month I’ve settled on a few key decisions related to my financial future. Detailing them below:

Roth 401K Percentage (5% -> 9%)
I’ve decided to up my 401K contribution to 9% of my income. Why? You might ask.

I’ll be honest – I don’t have a strong logical case or financial justification here.

I looked at my contribution from my last paycheck and, after employer match, it was very close to 1K. Something about 1K just feels right: at least 50% of my 401K max being contributed per year is feasible. The correct percentage is somewhere between 8% and 9%, but that’s not an option on Fidelity.

I’ve felt recently that what I am doing is more than enough to achieve my goals, so I think sweating about how this will reduce my savings toward my house down-payment just simply isn’t worth it. I’d love to hear your thoughts however.

House Saving

As mentioned in my 07/04/2024 update, I think it makes more sense to pay off my private student loans first before saving heavily for a house down-payment. The reason for this is two-fold:

1. I can’t touch money for a paid-off debt. Once the money has helped pay off that loan, there’s no excuse avenue I have to get that money back if I over spend. This makes sure the money is in a good spot. I suppose you could say the same about the 401K contribution increase above.
2. The interest rate on my savings account is lower than that of my house fund. I don’t think I can justify a large portion of the house fund going into a fairly unpredictable market for less than 2 years, so high-yield savings is the only real place for that money. The private student consolidation loan I have comes in at 5.85%, meaning that money I put into HYS over this loan is really just losing money.

OK… maybe it’s three-fold:

3. Paying off that debt means that I can save more in the future each month. An extra $500 a month goes a long way.

October 2024 – 10K Net Worth Milestone

I only recently hit positive net worth, and October marks the first time I’ve reached the 10K net worth milestone. This is a combination of increased savings and debt paydown rates. I’m excited to continue and see how the growth exponentiates to 100K as my next milestone. I got a new role with a decent pay increase as well, although that hasn’t really kicked in yet since my pay frequency changed.

Oh, also… I got a motorcycle license, and a motorcycle. This has added quite a few expenses for Q4 2024, but I’m really excited. It’s nothing that will be detrimental to reaching my goals, but could set my house savings goal back a month or two. Tentatively, I’m planning to have a down payment ready in basically a year.

What’s Next?

05/30/2024
I’ll pay off my car in 2 months, and increase my Roth 401K contribution to the max (around 19-20%) by August, given everything continues as expected.

Beyond that I’ll be saving in my house fund with a target for a 10-20% down payment for a house in Atlanta, which I estimate will cost me anywhere from $500,000 to $650,000. The talk right now is about interest rates maybe or maybe not falling this year. In the last week or two, that conversation has brought into picture that rates may even increase again. Either way, I want to be prepared for when the right opportunity presents itself.

07/04/2024
The car is paid off. I’ve been re-evaluating my goals a bit and my plan right now is to start paying off my private student loan quickly as the interest rate on it is higher than I can make from a high-yield savings account. After that point I’ll start saving for a house as rapidly as I can to buy one within the next 2-3 years when the timing, price, and interest rates are right.

As far as finding out whether it makes more sense to invest in my 401K or save up for a house, it’s a tough call. Using ProjectionLab I found out a few things:

• A house vastly increases my perceived time to FI, since my expenses are increased compared to current rents. This mostly makes sense, but doesn’t factor in increases in rent prices. In general when I stay in one spot the rent hasn’t changed, but if I continue to move around I may find that my rent increases to a level similar to that of the house prices I’m looking at.
• Going for the house first wins over maxing out my 401K in the 5-10 year period, when the account still has a lot of time to grow. Since I ultimately max it out in either plan, the difference isn’t life changing.

Ultimately, I don’t think I should sweat this decision so much. I’m starting to factor in some qualitative elements of the decision, such as:

A) Saving for a house doesn’t tie my money up. This keeps the money free for anything which might go wrong, or other investment opportunities.

B) I really want a house. I want to feel settled and start really decorating a place my way. I want the equity-building that comes with it, regardless of the difference between a mortgage (2500-3K+/month) and rent prices (currently sub 1500, and likely for a least 2-3 more years).

C) It’s going to be really hard to save later. Prices will only keep going up, and my lifestyle may change as well. Being single this seems like the best time to attempt to save for this.

D) Speaking of being single, did you know that owning a house before marriage entitles your partner only to the equity gained in the house while being married in the event of a divorce? You know… just in case.

I think the biggest decision now if I’m moving forward with the house being first priority is whether or not to use brokerage accounts to help cover the down payment. With good discipline I can save for the down payment without using those in about 2 years, but depending on their growth and the timing of finding the right house, it may make sense to take a profit and use it on top of what I have saved to get my monthly payment to a reasonable level.