tl;dr: I was poor and clueless, now I'm not poor anymore (not rich yet though) and I know things
As I am finishing a big review and overhaul of my financial landscape (due to a big change of employment and relocation at the end of last year), I found myself looking back at my past data and notes. I realized I have come a very, very long way, and thought I would make this post, both to thank the Bogleheads community, and to encourage newcomers.
4 years ago, in January 2015, I posted for the first time on this forum. I was still learning what to do with my finances. As a foreigner having arrived in the US 3 years earlier, I had very little knowledge on the subtleties of US money management, investing and retirement. So I wanted to start on that path, as well as save for a downpayment.
I had about $53k in my name - $41k in my 401k, and $12k in my savings account, and that was the extent of my Net Worth.
My first question was whether or not I should open a Roth IRA, given my specific set of circumstances. The answer was a resounding yes, and I will always be grateful to those Bogleheads who took the time to answer all my questions, and explain how it worked in great details.
So I did that, and "backdoored" $5,500 for FY2014. Then I took the time to really think about my goals, to come up with a reasonable plan, and an appropriate asset allocation. I ended up investing this money in VASIX, which sounded pretty good while I waited to have enough to set up a true 3-funds portfolio. My 401(k) was in some target retirement fund (and has been all this time).
When my relocation loans ended and freed up $700 a month, I increased my 401(k) contribution to the max I was allowed - 13%. It wouldn't be enough to max it out that year, but I was limited by HCE rules.
Then I got my bonus, and sent it to the Roth for FY2015. Since then, I have maxed it out every year in January.
After that, I spent a year or so building up my EF, then saving more until I had enough to buy VTSMX. I opened my first-ever brokerage account in July 2016 (In my notes I wrote "I'm a big girl, now!"). Sold my VASIX, bought some more VTSMX and some VBTLX, and I had my first 2-funds portfolio.
I added VGTSX (International Index) in August 2017, again after saving up the money for the minimum. So it took 2.5 years to build a full 3-fund portfolio.
I have tried to save as much as I could. Every raise went into my investments. Most of my bonuses, and any overtime pay too. I had a couple of pretty "good" years in terms of OT. I also had a huge bonus payout last year when I left my job, of which I invested 100%, and took my pension as lump sum (rolled it over in my 401(k)). So that helped a lot (the after-tax bonus plus the pension amounted to ~100k)
I haven't been perfect. Sometimes it's very hard for me to fight against shinytis, and I have bought way more high-end electronics and workout gear than I care to admit. I'm not frugal by any means, but I'm also not attracted to big cars and big homes, I hate debt, and I (almost) never stopped saving money. Many thanks to the Gods of Automated Direct Deposits.
So where am I now, 4 years later?
My Net Worth as of the end of last month was $420k. Again, all of it is savings and investments. I'm still a renter.
I'm still "behind" compared to what this forum would say a person "should" be at my age (almost 45). But when I look at the path behind me, and the path in front of me, I know I can "win the game" if I keep it up as long as I have a job. My new job has great benefits, the best of them being the ability to front-load the 401(k) and the match, and full Mega Backdoor Roth IRA. So I'm planning on maxing that out every year for as long as I have access to it. My budget got a fair bit of a raise after relocation, due to a much better housing situation, but I will be saving most of the income boost I got from the new job and new state tax situation. I expect to save about 45% of my gross income this year.
I don't know what I would have done if I hadn't found this forum, and its wiki. So please accept my most heartfelt thanks. Not only have you all allowed me to save more money than I EVER thought I would ever have, and made my retirement prospects pretty good, but I have learned so much in the process.
To all the new members starting with next to nothing or less, I know it feels like an insurmountable task, but trust me, every little bit adds up, and there is nothing more effective than patience and perseverance. It *will* get to a point where it feels like your goals are within reach.
Thank you
