Year 5 as a Boglehead: No debt!

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WhatsUpB
Posts: 35
Joined: Sun Aug 18, 2013 9:17 pm

Year 5 as a Boglehead: No debt!

Post by WhatsUpB » Fri Feb 02, 2018 5:57 pm

Entering year 6 as a Boglehead and doing my 5th annual retrospective post. I hope it serves to inspire and motivate a few newer members to take up managing their own finances guided by the Boglehead principles. Looking back I have gone on a true intellectual journey coming from knowing nothing about financial planning, investing, or retirement planning to all of it becoming one of my deepest interests/hobbies.

In 2017 I made another job change, which I anticipated the year before. It included a nice size title and pay bump as well as got me out of a work environment that was growing increasingly toxic due to upper management. The pay bump allowed my wife and I to absorb her quitting her full time job to start nursing school full time (with no student loans needed). She is now in semester 2 (of 4) and doing great! Other big news is we finally paid off my student loans! The progression is below. Anyone staring at a large balance, it is possible to get them paid off! You just keep doing what you can each year and over time you will get there. Finally, we had anticipated starting the journey towards having kids last year but have delayed that for now as my wife gets through school.

I continue to read these boards a few times a week and am thankful for everyone here who shares their knowledge!

Links for those interested in seeing my journey and previous posts.
Year 1 (2013): viewtopic.php?f=1&t=127906&p=1878374
Year 2 (2014): viewtopic.php?f=1&t=153385&p=2301523
Year 3 (2015): viewtopic.php?f=1&t=182856&p=2773872
Year 4 (2016): viewtopic.php?f=1&t=209175&p=3210565

I got feedback in last year's thread it would be great to carry forward the balance progressions so people do not need to click through all the threads. So, moving forward I will format accounts as 2013 ($) -> 2014 ($) -> 2015 ($) -> 2016 ($) -> 2017 ($)

Year 5 (2017)
Emergency fund: 6 months funded
Debt: No credit card debit, car loans or mortgage
Student Loans: $76,491 -> $68,972 -> $45,376 -> $27,262 -> $0
Tax Filing Status: Married with no dependents
Marginal Tax Rates: 28% Federal (dropping to 24% in 2018), 9.3% State
State of Residence: CA (LA area)
Age: 31
Desired Asset allocation: 90% stocks / 10% bonds
Desired International allocation: 25% of stocks
Income with x equaling annual income from job 1 in 2013: 1x (job 1) -> 1.8x (job 2) -> 2.5x (job 3) -> 3x (job 3) -> 4.4x (job 4)

2018 Planned Debt Contributions: No planning needed for first time ever!

2018 Planned Retirement Contributions: $36,400
$18,500 His 401k + 2.5% Salary 1:1 match
$5,500 His ROTH IRA
$5,500 Her ROTH IRA
$6,900 Family HSA ($500 by employer)

2018 Planned Savings: $?
We can now divert money previously going to student loan debt towards saving for long term goals (house/new car for him/babies). This is separate from emergency fund.
$? in taxable (CA bonds)

Current Retirement Assets: $11,000 -> $45,656 -> $77,795 -> $127,212 -> $203,341
Accounts holistically setup at 90% stocks with 25% International and 10% bonds

Taxable: None

His 401k (Fidelity): $0 -> $22,124 -> $32,002 -> $63,752 -> $110,026 (Rolled over his small SEP-IRA)

His ROTH IRA (Vanguard): $5,500 -> $12,036 -> $21,314 -> $27,797 -> $37,151

Her ROTH IRA (Vanguard): $5,500 -> $11,496 -> $20,819 -> $28,064 -> $40,472 (Converted her small SEP-IRA)

Family HSA: $0 -> $0 -> $3,660 -> $7,599 -> $15,692

Few take aways from the numbers.
1. Going with a simpler format moving forward that does not break down what vanguard/fidelity index fund every dollar is in. Believe me when I say all $203,341 is in low cost Vanguard or Fidelity index funds to get to 90/10 in total across all accounts.

2. Neither my wife nor I have an income stream that would allow us to put anymore into our SEP-IRAs. My wife does not have a 401k so I bit the tax bullet and paid the rollover into her ROTH for tax year 2017. I have a 401k so I rolled my SEP-IRA into there. This is all in preparation of likely hitting an income level this year that will require us to backdoor our ROTH contributions.

3. Crossed the $200k mark in retirement funds (for now!). Back of the envelope that balance is approx. 68% from contributions and 32% in growth. I wish I had had a significant balance in retirement funds at the start of this bull run but I was just getting out of college. Beggars cant be choosers and I remind myself to be proud of what we have done while paying off debt at the same time. Also, that will not matter much at all 30 years from now in retirement.

4. Man it pays to switch jobs. While I did get raises at both job 2 and job 3 over the last 5 years, they were not nearly as much as getting that next job and title at a new company. I know there is some sensitivity to switching jobs to often but two things: 1) I work in technology and more consistent job moving is understood 2) As long as you accomplish goals and leave on good terms with each job I see now issue. I am 6 months into my 4th job over these last 5+ years.

5. Play money. For the first time in 5 years (after paying off all debt) I put $3k into crytocurrency on June 5th, 2017 for fun. The balance at time of this post stands at $11,350. I will keep track of this for as long as I stay owning it in my posts moving forward. Maybe it grows to $100k one day or drops to $0. Just a fun thing to keep an eye on at a cost of $3k.

Any and all questions, feedback, comments more then welcome. Thank you again to this community.
Last edited by WhatsUpB on Fri Feb 02, 2018 6:18 pm, edited 5 times in total.

ReadyToRetire
Posts: 63
Joined: Tue Oct 11, 2016 8:47 am

Re: Year 5 as a Boglehead: No debt!

Post by ReadyToRetire » Fri Feb 02, 2018 6:06 pm

Congrats!!!

You are really doing well.

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WoodSpinner
Posts: 523
Joined: Mon Feb 27, 2017 1:15 pm

Re: Year 5 as a Boglehead: No debt!

Post by WoodSpinner » Fri Feb 02, 2018 10:16 pm

Way to go! Pretty impressive accomplishment.

Kudos to your wife as well, nursing is a great career

WoodSpinner :sharebeer

WannabeBogleHead01
Posts: 40
Joined: Wed Nov 09, 2016 10:12 am

Re: Year 5 as a Boglehead: No debt!

Post by WannabeBogleHead01 » Sat Feb 03, 2018 6:45 am

This is great. The annual amounts really hammer the value of having a plan. Thanks for sharing.

WhatsUpB
Posts: 35
Joined: Sun Aug 18, 2013 9:17 pm

Re: Year 5 as a Boglehead: No debt!

Post by WhatsUpB » Sun Feb 04, 2018 4:13 am

Thank you for the kind words!

TwstdSista
Posts: 987
Joined: Thu Nov 16, 2017 4:03 am

Re: Year 5 as a Boglehead: No debt!

Post by TwstdSista » Sun Feb 04, 2018 4:16 am

Woo hoo and hooray! Very nicely done, and way to keep the momentum going!

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