At 30, what are some key financial milestones I should have hit?

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bigtex
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At 30, what are some key financial milestones I should have hit?

Post by bigtex »

I am turning 30 soon. Are there any big boglehead financial milestones I should have hit by age 30?
Independent George
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Re: At 30, what are some key financial milestones I should have hit?

Post by Independent George »

It's different for everybody, and not just in terms of income. Are you married? Do you have children? What's your cost of living? Are you a doctor whose residency just ended? You can't expect a one-size-fits-all timeline for all situations. Don't measure yourself against someone else's idea of progress - that's every bit as self-destructive as trying to maintain your neighbor's lifestyle.
Wings5
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Re: At 30, what are some key financial milestones I should have hit?

Post by Wings5 »

I won’t get specific because things happen to everyone at different ages, and there will be hundreds of others chiming in anyway.

Simply recognizing the importance of personal finance is probably the biggest milestone and you’ve already made it. Nice job!
cpan00b
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Re: At 30, what are some key financial milestones I should have hit?

Post by cpan00b »

Right, you'll see more often than not most 30 year olds are not even aware yet with respect to saving and investing aggressively, and many have huge loads of student debt if they went to med/law/other grad school. By being on bogleheads you're already ahead of the curve. I discovered the bogle lifestyle at 27 (which was coincidentally when I graduated from grad school too), but I missed out on investing when I was working full time from the age of 21 - 24 (didn't even fund my 401k or ira).

The rest really just depends on your income, expenses and therefore savings rate. I save about 50% of my gross income and have been doing so for the last 3 years and hope to hit 500k NW by the end of the year.
Flashes1
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Re: At 30, what are some key financial milestones I should have hit?

Post by Flashes1 »

I would hope that all school debt would have been repaid (unless med school), and you're saving at least 10% to your 401(k), and contributing as much as possible to your Roth.

Start saving for a house (if home ownership is one of your goals).
terran
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Re: At 30, what are some key financial milestones I should have hit?

Post by terran »

I wouldn't give much credence to the X times expenses by 30 or whatever milestones. Have you developed reasonable retirement and lifestyle goals given your resources? Are you on track to meet those goals? If yes, good! If no, do you have a plan for developing goals and then getting on track?
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David Jay
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Re: At 30, what are some key financial milestones I should have hit?

Post by David Jay »

bigtex wrote: Wed May 20, 2020 8:41 am I am turning 30 soon. Are there any big boglehead financial milestones I should have hit by age 30?
Great question! You are so far ahead of where I was. I think I made my very first 401K contribution at age 30...
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
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arcticpineapplecorp.
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Re: At 30, what are some key financial milestones I should have hit?

Post by arcticpineapplecorp. »

according to the FIRE movement, you should have already been retired. :annoyed

but if you haven't read William Bernstein's book, "If You Can. How Millenials Can Get Rich Slowly" I'd suggest you do (it's only 16 pages long):

https://www.etf.com/docs/IfYouCan.pdf
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
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Watty
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Re: At 30, what are some key financial milestones I should have hit?

Post by Watty »

bigtex wrote: Wed May 20, 2020 8:41 am I am turning 30 soon. Are there any big boglehead financial milestones I should have hit by age 30?
As others have said it really varies with your situations since a married person with a couple of kids in a low cost of living area is in a much different situation than a single person in a high cost of living area.

It would be more productive to focus on what goals you would want to hit when you are 40.

A few things you might do;

1) I have a very simple spreadsheet that I update each year with my net worth on January 1st. This lets me see my progress over the years. You might start doing that.

2) When I was about your age I committed to myself that I would save half of any future pay raises and I pretty well did that for a long time. This is a painless way to increase your savings since you are not used to seeing that money anyway. This also will also help prevent lifestyle creep. Savings can be things other than retirement savings like saving up a down payment for a house or paying down debt early. If you are already saving a modest amount then you could be saving 20% of your income by the time you are 40 and it would be pretty painless.

3) Have a plan for being able to pay cash for future cars if you are not already doing that. When you get a car paid off keep making your "car payment" into a car fund to have the cash to buy your next car. If you can get one car ahead then you can always be able to pay cash for future cars. I have known people in their 60s that have had car loans for 40 years and that has cost them a lot.
Last edited by Watty on Wed May 20, 2020 9:29 am, edited 1 time in total.
alfaspider
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Re: At 30, what are some key financial milestones I should have hit?

Post by alfaspider »

At 30, what you've done in the past (i.e. the milestones you've hit) doesn't matter as much as what you are doing NOW. Are you saving a healthy fraction of your salary, and do you have a clear path to continue doing so? Are you investing well (i.e. use of tax advantaged space, reasonable asset allocation, and low fees). If so, you are doing GREAT.
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Re: At 30, what are some key financial milestones I should have hit?

Post by Sandtrap »

bigtex wrote: Wed May 20, 2020 8:41 am I am turning 30 soon. Are there any big boglehead financial milestones I should have hit by age 30?
The financial and personal and life "milestones" at age 30, and age 30's reflect the transition from youth to mature adulthood, with the corresponding changes in maturity, humility, ambition, focus, and the growing ability to discern between what is trivial and what is meaningful, what is lasting and endures, and what is not.

The outer milestones are only a reflection of inner growth. And, for each person, it will manifest differently. For one, wealth and ruthless ambition, for another, something else.

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alfaspider
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Re: At 30, what are some key financial milestones I should have hit?

Post by alfaspider »

Watty wrote: Wed May 20, 2020 9:25 am

3) Have a plan for being able to pay cash for future cars if you are not already doing that. When you get a car paid off keep making your "car payment" into a car fund to have the cash to buy your next car. If you can get one car ahead then you can always be able to pay cash for future cars. I have known people in their 60s that have had car loans for 40 years and that has cost them a lot.
With today's low interest rates, car loans aren't in and of themselves a bad thing. The issue is when they are used to buy cars one couldn't afford without them (i.e. too much car).
Slowtraveler
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Re: At 30, what are some key financial milestones I should have hit?

Post by Slowtraveler »

Saving 50% of income as a minimum. Try the Millionaire Next Door's formula to see if you're prodigious accumulator of wealth: age * income /10. Aim for a score of 2.

Honestly, it'd be good to have low expenses. Ideally a 5% withdrawal rate by 30 years old. Once you reach 3%, you can increase expenses as long as you're within that 3% withdrawal rate. Once you're very comfortable with that 3% including your family, you're set.

Also, use index funds, don't get divorced, avoid leeches, and don't abuse drugs. Any of these errors can destroy your wealth.
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Re: At 30, what are some key financial milestones I should have hit?

Post by The Broz »

Read The Millionaire Next Door. There is part that discusses net worth relative to your income essentially. There is a formula with it that escapes me, but the idea is that high income people who over consume may appear to be wealthy, while lower income people who spend and save wisely are actually wealthy.
There is a story of a WW2 Vet who worked as a janitor and made a very small income for his whole working life. He died with a net worth of $8M. Conversely, there are something around 100 people in this country who have >$1M in student loan debt alone. One of them is a dentist in the Salt Lake City area. His loan payment does not even cover the interest, so his loan balance keeps expanding. He has interest in paying it off, and instead lives in a huge house on the side of a mountain, fancy car, etc.
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Re: At 30, what are some key financial milestones I should have hit?

Post by americanbull »

Slowtraveler wrote: Wed May 20, 2020 9:34 am Saving 50% of income as a minimum. Try the Millionaire Next Door's formula to see if you're prodigious accumulator of wealth: age * income /10. Aim for a score of 2.

Honestly, it'd be good to have low expenses. Ideally a 5% withdrawal rate by 30 years old. Once you reach 3%, you can increase expenses as long as you're within that 3% withdrawal rate. Once you're very comfortable with that 3% including your family, you're set.

Also, use index funds, don't get divorced, avoid leeches, and don't abuse drugs. Any of these errors can destroy your wealth.
a 5% w/d rate by 30? How is that even possible?
huskerfan1414
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Re: At 30, what are some key financial milestones I should have hit?

Post by huskerfan1414 »

The Broz wrote: Wed May 20, 2020 9:39 am Read The Millionaire Next Door. There is part that discusses net worth relative to your income essentially. There is a formula with it that escapes me, but the idea is that high income people who over consume may appear to be wealthy, while lower income people who spend and save wisely are actually wealthy.
There is a story of a WW2 Vet who worked as a janitor and made a very small income for his whole working life. He died with a net worth of $8M. Conversely, there are something around 100 people in this country who have >$1M in student loan debt alone. One of them is a dentist in the Salt Lake City area. His loan payment does not even cover the interest, so his loan balance keeps expanding. He has interest in paying it off, and instead lives in a huge house on the side of a mountain, fancy car, etc.
Ok, I have to ask.

So, this janitor died with 8 million in net worth. First of all, what an absolute stud muffin. WW2 vet and hard working janitor, my kind of guy.

Next, did he get to take it with him? I don't know anything about the guy, but did he enjoy his hard work and saving at all before he passed, or did he live frugally his whole life? If so, what's the point? To hedge against five economic depressions? I'm not trying to be mean but seriously, at what point do you enjoy your money instead of building your pyramid?

I do not agree with the way the dentist is handling his finances...but...did he lose his house? Is he unhappy?

I think these two examples are both extremes that both need to be avoided (assuming the janitor never actually increased his standard of living and got nothing other than a raised eyebrow and pat on the back from some banker after he died).
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Re: At 30, what are some key financial milestones I should have hit?

Post by huskerfan1414 »

As for OP, I think the biggest thing is just your current savings rate and whether or not you are taking advantage of your work benefits in the 401k, assuming you have them.
Also, is a roth something that should be considered?

Further, are you married? If so, is your wife on the same page financially? Is she investing in her 401k? 30 is a great discussion "time" for that in case she is not.
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Watty
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Re: At 30, what are some key financial milestones I should have hit?

Post by Watty »

alfaspider wrote: Wed May 20, 2020 9:31 am
Watty wrote: Wed May 20, 2020 9:25 am

3) Have a plan for being able to pay cash for future cars if you are not already doing that. When you get a car paid off keep making your "car payment" into a car fund to have the cash to buy your next car. If you can get one car ahead then you can always be able to pay cash for future cars. I have known people in their 60s that have had car loans for 40 years and that has cost them a lot.
With today's low interest rates, car loans aren't in and of themselves a bad thing. The issue is when they are used to buy cars one couldn't afford without them (i.e. too much car).
The key is having the cash set aside to be able to pay cash for the car even if you decide to get a car loan because of something like a 0% financing offer where you really cannot get a better price if you pay cash(usually you can).

With the pandemic there are a lot of people that had reasonable affordable cay payments that were laid off and suddenly have no income and they do not have the money to pay off their car so they are in a bind.
tashnewbie
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Re: At 30, what are some key financial milestones I should have hit?

Post by tashnewbie »

I agree with others that it can be hard to give advice without knowing more about your specific situation.

I would agree that you should focus on yourself and don't compare yourself with other people - comparison never leads to anywhere good.

This thread might be helpful in thinking about this next decade: viewtopic.php?f=2&t=314741
Slowtraveler
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Re: At 30, what are some key financial milestones I should have hit?

Post by Slowtraveler »

americanbull wrote: Wed May 20, 2020 9:42 am a 5% w/d rate by 30? How is that even possible?
Low expenses.

You start working at 15 or so. Save 80%+ until you move out because expenses increase a lot with a roof to pay for. Save 50%+ of your income per year after. Including investment gains, you'll have well over 20 years of expenses as long as lifestyle inflation was low. This assumes very low expenses until a significant asset base is built.

This is a great milestone but unlikely for most people due to spending rather than saving most of their income. The OP is starting young so they seem more financially conscious than most at their age.

There's some forums dedicated to retiring with a 3% withdrawal rate in 5-10 years via 75%+ savings rates but those are too distant conceptually from what people here are doing so I tried to give one possible example for someone who started the journey as soon as possible.

A great programmer working in a lcol country for a hcol country company could pull it off quite easily. In a hcol country it is harder but still possible.
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Re: At 30, what are some key financial milestones I should have hit?

Post by magicrat »

Writing a well thought out IPS
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Re: At 30, what are some key financial milestones I should have hit?

Post by americanbull »

Slowtraveler wrote: Wed May 20, 2020 10:45 am
americanbull wrote: Wed May 20, 2020 9:42 am a 5% w/d rate by 30? How is that even possible?
Low expenses.

You start working at 15 or so. Save 80%+ until you move out because expenses increase a lot with a roof to pay for. Save 50%+ of your income per year after. Including investment gains, you'll have well over 20 years of expenses as long as lifestyle inflation was low. This assumes very low expenses until a significant asset base is built.

This is a great milestone but unlikely for most people due to spending rather than saving most of their income. The OP is starting young so they seem more financially conscious than most at their age.

There's some forums dedicated to retiring with a 3% withdrawal rate in 5-10 years via 75%+ savings rates but those are too distant conceptually from what people here are doing so I tried to give one possible example for someone who started the journey as soon as possible.

A great programmer working in a lcol country for a hcol country company could pull it off quite easily. In a hcol country it is harder but still possible.
I see your point. There are a lot of variables that need to happen, such as working very early in their teens and saving a significant amount of income. I do think it could be possible, but for a very small % of the population. Most people don't have the mindset of saving 80% of their income(gross or net). Even with the mindset, I think it is a very arduous task.
as9
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Re: At 30, what are some key financial milestones I should have hit?

Post by as9 »

americanbull wrote: Wed May 20, 2020 10:56 am
Slowtraveler wrote: Wed May 20, 2020 10:45 am
americanbull wrote: Wed May 20, 2020 9:42 am a 5% w/d rate by 30? How is that even possible?
Low expenses.

You start working at 15 or so. Save 80%+ until you move out because expenses increase a lot with a roof to pay for. Save 50%+ of your income per year after. Including investment gains, you'll have well over 20 years of expenses as long as lifestyle inflation was low. This assumes very low expenses until a significant asset base is built.

This is a great milestone but unlikely for most people due to spending rather than saving most of their income. The OP is starting young so they seem more financially conscious than most at their age.

There's some forums dedicated to retiring with a 3% withdrawal rate in 5-10 years via 75%+ savings rates but those are too distant conceptually from what people here are doing so I tried to give one possible example for someone who started the journey as soon as possible.

A great programmer working in a lcol country for a hcol country company could pull it off quite easily. In a hcol country it is harder but still possible.
I see your point. There are a lot of variables that need to happen, such as working very early in their teens and saving a significant amount of income. I do think it could be possible, but for a very small % of the population. Most people don't have the mindset of saving 80% of their income(gross or net). Even with the mindset, I think it is a very arduous task.
Forget the mindset, most people don't have the privilege for this to be remotely possible.
Count of Notre Dame
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Re: At 30, what are some key financial milestones I should have hit?

Post by Count of Notre Dame »

2 kids, 1 wife, and a $1M net worth. Jk!
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Eagle33
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Re: At 30, what are some key financial milestones I should have hit?

Post by Eagle33 »

As the minimum
* fully funded emergency fund
* investing at least enough in employer's retirement plan to get full match
* written investment policy statement (IPS)
Rocket science is not “rocket science” to a rocket scientist, just as personal finance is not “rocket science” to a Boglehead.
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Re: At 30, what are some key financial milestones I should have hit?

Post by geerhardusvos »

bigtex wrote: Wed May 20, 2020 8:41 am I am turning 30 soon. Are there any big boglehead financial milestones I should have hit by age 30?
Congratulations on your birthday. Can you give a little snapshot about you so that we know more and can weigh in? This is very different for everyone. I just turned 30 last year! Things like increasing your income, finding the field in which you can be a high income professional, starting or growing your family, having an emergency fund (3-12 mo of living expenses), being out of debt, or at least non-mortgage debt, and starting to focus on building your first couple hundred thousand dollars in your retirement accounts by maxing out your advantaged accounts, and even taxable brokerage. As a point of reference, I have been saving since age 22 and I am a high income professional with about 15 years of living expenses saved up with no debt of any kind. Now our goal is to retire at age 40. If you only have one year living expenses saved up or if you have 30 years, don’t feel rushed, but focus on what matters and make sure that includes your relationships and health. Set goals, track progress, enjoy the ride!
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Re: At 30, what are some key financial milestones I should have hit?

Post by stoptothink »

alfaspider wrote: Wed May 20, 2020 9:29 am At 30, what you've done in the past (i.e. the milestones you've hit) doesn't matter as much as what you are doing NOW. Are you saving a healthy fraction of your salary, and do you have a clear path to continue doing so? Are you investing well (i.e. use of tax advantaged space, reasonable asset allocation, and low fees). If so, you are doing GREAT.
This. I was exactly 30 when I read "A Bogleheads Guide to Retirement", just finishing my PhD and a messy divorce that left me nearly broke. Just turned 39 and we (wife and I) could fairly realistically call it quits in a few years if we wanted to and we are not super high income (at least based upon the standards of this board). If you are here and have developed a habit of saving, you have hit milestones that the majority of 30yrs olds haven't even considered.
heyyou
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Re: At 30, what are some key financial milestones I should have hit?

Post by heyyou »

From poster Watty
2) When I was about your age I committed to myself that I would save half of any future pay raises and I pretty well did that for a long time. This is a painless way to increase your savings since you are not used to seeing that money anyway. This also will also help prevent lifestyle creep. Savings can be things other than retirement savings like saving up a down payment for a house or paying down debt early. If you are already saving a modest amount then you could be saving 20% of your income by the time you are 40 and it would be pretty painless.
Save pay raises after spending the first monthly increase as a celebration.
3) Have a plan for being able to pay cash for future cars if you are not already doing that. When you get a car paid off keep making your "car payment" into a car fund to have the cash to buy your next car. If you can get one car ahead then you can always be able to pay cash for future cars. I have known people in their 60s that have had car loans for 40 years and that has cost them a lot.
Have you realized that you will not ever look like the models in the new car advertising? You could buy used cars known to be reliable, and maintain them well, so you can drive them for that second hundred thousand miles. You might know your car mechanic's name, instead of a car dealer salesperson's name. ETA: Mr. Bogle was known for driving his perhaps voting-age Volvo to some of the earliest Bogleheads meetings.

Have you noticed that you may always be wanting to buy something, and that after you buy it, very soon you will be wanting to buy something else? Decide that you have enough-- enough car, enough housing, enough things, so you no longer need a higher income, then your surplus income goes into savings. Of course, you are maxing all of your deductible annual retirement account contribution limits (401k and the Roth IRA) a little earlier each year, then diverting your continued savings into your investment account for taxable money. That is using payroll deductions to hide those savings from your checking account.

Have you found hobbies you like, that have reasonable costs instead of ones that have bragging rights at the office? Since you only have to work a job until you can afford to live off of your investments, 25-30 times your lower spending, is less than what your coworkers will need who spend all of every paycheck.
Last edited by heyyou on Wed May 20, 2020 5:31 pm, edited 1 time in total.
khangaroo
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Re: At 30, what are some key financial milestones I should have hit?

Post by khangaroo »

FWIW here are the mile stones I set-out for myself when I was ~26 when I really started to take my personal finances more seriously.

1. Be debt free
2. $250k in net worth
3. 6 month emergency fund
4. Max Roth IRA every year
5. Max 401k every year

My next big goal is to have a $500k in investments by 35 and $1M net worth by 40.

Gonna take a little bit of luck to get there with this market turn but I've just gotten into real estate investing and land lording so we'll see where that takes me.
Last edited by khangaroo on Wed May 20, 2020 5:30 pm, edited 1 time in total.
alfaspider
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Re: At 30, what are some key financial milestones I should have hit?

Post by alfaspider »

heyyou wrote: Wed May 20, 2020 5:27 pm
Have you realized that you will not ever look like the models in the new car advertising? You could buy used cars known to be reliable, and maintain them well, so you can drive them for that second hundred thousand miles. You might know your car mechanic's name, instead of a car dealer salesperson's name.

Yes, I know my mechanic's name. His name is alfaspider :mrgreen:

A youtube channel that I sometimes watch sells T-shirts that read "I am the warranty."
Slowtraveler
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Re: At 30, what are some key financial milestones I should have hit?

Post by Slowtraveler »

I secede my point about a 5% withdrawal rate being a "should" milestone by 30. In my response to as9, I realized it's not worth it for most people. I was wrong and you were right. I was wrong all along.

Mostly sage advice here though. It's about saving enough so you feel comfortable, your financial goals are unique to you but using the responses on this board can help you feel what makes sense for your life- a house, an asset base to support you for XX years, a family on a homestead. Either way, no debt, an emergency fund, max roth and 401k are some solid, likely universal milestone shoulds for most people.

@as9
You mean mentality. It is common in some forums to retire at 3% withdrawal rates in the late 20's to early 30's. From what I read here, at least half (likely 90%+) could pull it off with the right mentality. It's a choice that takes focus and most people don't have that level of focus towards expense reduction in their 20's. This is fine. I was motivated to drastically reduce my expenses when I realized that it'd be significantly more impactful at reducing my carbon footprint than near anything else I could do, along with building my wealth, helping me develop the skills to become more resilient by substituting other forms of capital for financial capital (ie- knowledge of how to cut hair, garden, replace a broken tire, cook, create love notes or origami gifts), and that buying my freedom would give me the ability to travel or raise a family without needing to stress about work like others did. I couldn't have reduced my expenses to the degree I did without the motivation coming from multiple perspectives.

I personally stayed at home with family until the beginning of my mid 20's, went to the local uni, and went almost exclusively to nature for entertainment in this time. Dates consisted of learning all I could to cook chicken tikka masala or make some homemade burgers to bring for a beach picnic and bonfire. Then I moved out to another country with a lcol and a remote job. My expenses (includes 2 people and international travel) are from 12-20k/yr. I felt it was luxurious most of the time.

There's people like Rob Greenfield among many, many others who spend under 5k/yr. You could live on less by dumpster diving and living in a fixed up van you set up but it takes time to set it up and learn what exactly to do. These are personally not my lifestyle choices as I never dumpster dived and hitch hiked only once in my life on Hawaii when my sister took our car but I'm mentioning it to show you the extent of what is actually needed vs consumed as a result of the habit of not questioning the norm. You can solve most problems by throwing money at them but taking a little longer to add some skill and look at other factors, like the fact that tree removal companies produce mulch that becomes soil or that construction waste is often perfectly usable with some repurposing, allow one to solve problems in a way that is both environmentally friendly and at a cost that is unimaginable for many people. However, time and skill required are often higher.

While the perceived cost is likely too high for most, it is very possible. A very simple example would be someone earning 6 figures online and working outside the states so they can take the FEIE. They earn 100k-7.65k for FICA taxes = 92.35 after tax. They could spend about 13.5k/yr in this case and save 85%. They could get to a sub 4% withdrawal in about 5 years. Beyond that, they can begin moving to higher col countries as their wealth rapidly balloons. This is about very focused saving initially so freedom to increase expenses or focus on family comes sooner than later. If you love your job, it's absolutely not worth it but I saw my parents sacrifice so much attention for their family to focus on work that it motivated me to focus on this. So while the morbidly low expenses isn't for you and is for me, I respect your choice and will defend your right to think that way.

I know this is unimaginable for most people and it's completely okay for it to not be the choice people make but it is possible and many in the world are doing it.
gmc4h232
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Re: At 30, what are some key financial milestones I should have hit?

Post by gmc4h232 »

You really should be retired by now.
eigenperson
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Re: At 30, what are some key financial milestones I should have hit?

Post by eigenperson »

1. You should have a career plan. You should already be acting in accordance with that plan.
2. You should have a financial plan for your life, including saving for retirement at a realistic age (70 or less), and your current lifestyle, spending, saving, and investing should reflect that plan. The plan should be based on present conditions, not what you optimistically hope will be true in the future, and should not use an excessively rosy rate of return on investment. That probably means you are saving at least 15% of your income.
3. You should have recognized and eliminated any maladaptive behaviors such as impulsive spending, gambling or shopping addictions, day trading, and so on.
4. You should understand the fundamentals of household finances: how interest is calculated; how auto, home, and medical insurance works; what stocks and bonds are and their historical performance. You should have a rough but accurate idea of the costs (both purchase price and maintenance) of important items such as homes, motor vehicles, electronics, clothing, food, and medical care, and know the difference between basic and luxury versions of these items.
5. You should have a budget or spending tracking system that includes inevitable costs that don't happen every year (e.g. a new car).
6. You should understand how the tax system works and be able to do your own taxes.
7. You should know how to recognize and avoid common scams, ranging from outright fraud to MLMs and whole life insurance.
8. If you have a spouse or partner, they should also have met the above milestones (exception: if your plan involves you supporting your partner, then they do not need a career plan) and you should have had enough explicit, detailed conversations about finances to be certain of that.
Grt2bOutdoors
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Re: At 30, what are some key financial milestones I should have hit?

Post by Grt2bOutdoors »

No credit card debt other than what is paid off on a monthly basis. There should be few reasons why you carry a balance and pay a bank 12% when the bank pays you 1% or less in interest.

You should have an emergency fund of at least 6 months expenses.

You either have an IRA or a 401k/403b plan and you regularly contribute to it, with a view of increasing the amount contributed each year so that you are either contributing 15% (not including employer match) or you've maxed out the amount permitted by the IRS each year.

You live beneath your means. Your partner or significant other also believes in and actually practices LBYM. Opposing strokes in the water, the boat goes nowhere.

You stop to smell the roses. IOW, enjoy your youth!

You have a plan B in the event of a career mishap - layoff, outdated or dispensable career path. Think about it now, what will you do?
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
oldfort
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Re: At 30, what are some key financial milestones I should have hit?

Post by oldfort »

There's no way to create general milestones. Many posters are way ahead of me in net worth, but many of those same posters have income 5x what I'm earning.
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CyclingDuo
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Re: At 30, what are some key financial milestones I should have hit?

Post by CyclingDuo »

bigtex wrote: Wed May 20, 2020 8:41 amI am turning 30 soon. Are there any big boglehead financial milestones I should have hit by age 30?
Good starting point if you are saving 15% of your income, plan to retire at FRA, take SS at FRA and live until 93 says you should have saved 1 X your salary by age 30. It's only a starting point and is based on the criteria Fidelity uses for their scenario, but it is what it is...

The salary multiplier suggested is based solely on your current age. In developing the series of salary multipliers corresponding to age, Fidelity assumed age-based asset allocations consistent with the equity glide path of a typical target date retirement fund, a 15% savings rate, a 1.5% constant real wage growth, a retirement age of 67 taking SS at FRA and a planning age through 93. The replacement annual income target is defined as 45% of pre-retirement annual income and assumes no pension income.

Image
"Save like a pessimist, invest like an optimist." - Morgan Housel
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whodidntante
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Re: At 30, what are some key financial milestones I should have hit?

Post by whodidntante »

OP, your question just isn't very good and many of the responses are for the poster's benefit. You started differently than I did, so set goals that make sense for you. If you're looking for common problems, the majority of people just don't earn enough money. Investing doesn't happen unless you have investable money. And if you can earn enough, make sure you save enough. Then we'll see you as you anguish about the important problems, like paying off your mortgage or investing. :beer
H-Town
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Re: At 30, what are some key financial milestones I should have hit?

Post by H-Town »

bigtex wrote: Wed May 20, 2020 8:41 am I am turning 30 soon. Are there any big boglehead financial milestones I should have hit by age 30?
Geez... Turning 30 isn't bad enough? You will be depressed seeing unrealistic goals from others.

Income varies widely from profession, from regions, and from each individual. Expenses varies even widely for the people who have the same income. Some would receive inheritance.

So forget about 30. Forget about comparing yourself with others. Grab a cold beer and kick it back.
protagonist
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Re: At 30, what are some key financial milestones I should have hit?

Post by protagonist »

bigtex wrote: Wed May 20, 2020 8:41 am I am turning 30 soon. Are there any big boglehead financial milestones I should have hit by age 30?
You should have a steady job and you shouldn't be living with your parents.
And stay out of debt.
Wricha
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Re: At 30, what are some key financial milestones I should have hit?

Post by Wricha »

Broad brush stuff.

In 30’s
Make sure you match any employer contributions
Become free of CC debt, school loans, car payments and only have Mortgage.

In 40’s
Pay off all debt/Mortgage
Max out 401k options
Open taxable account save at least 10%

In 50’s

Live the lifestyle of your 40’s and save/invest until you are financial independent.

Kinda of what I did it worked out fine

Then you make the call on next steps
TallBoy29er
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Re: At 30, what are some key financial milestones I should have hit?

Post by TallBoy29er »

If you've made it this far without a huge relationship whoopsie, you're doing good, kid.
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yangtui
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Re: At 30, what are some key financial milestones I should have hit?

Post by yangtui »

Did the OP run away? Key financial milestones are going to be different for everybody.
lakja
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Re: At 30, what are some key financial milestones I should have hit?

Post by lakja »

Here are a few:
1) No debt, except mortgage
2) Savings at least matching your annual income
3) Defined retirement goals with an achievable, specific plan to get there

I recommend benchmarking your progress to your goal at least annually and adjust as required.

For non-financial benchmarks, you should have drafted advanced directives for medical treatment, defined medical and financial powers of attorney, drafted guardianship provisions if you have kids, and are adequately insured to guard against any potential catastrophic risk that would affect you.
Normchad
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Re: At 30, what are some key financial milestones I should have hit?

Post by Normchad »

Hmmmmm..... I;'ll tell you where I was at 30, and maybe that will be helpful to you......

1) I started tracking my finances/spending in Quicken probably when I was 27 or so. I think actually tracking your spending for a year is really eye opening; and for me was unbelievably helpful and profitable.
2) We were a single income family and were expecting our first child.
3) My wife had just finished grad school......
4) With all of that, our networth had finally reached "zero", and we were elated.

Meaning, at 30, we were worthless. We were just starting to make progress on our financial journey. But we didn't have any huge debts, our cars were paid, etc. We had setup a life for ourselves that we could sustain on a single income.

So that was at 30. Planning to retire at 55 without a pension. Saving 15% of gross income every year got us here....
bltn
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Re: At 30, what are some key financial milestones I should have hit?

Post by bltn »

Watty wrote: Wed May 20, 2020 9:25 am
bigtex wrote: Wed May 20, 2020 8:41 am I am turning 30 soon. Are there any big boglehead financial milestones I should have hit by age 30?
As others have said it really varies with your situations since a married person with a couple of kids in a low cost of living area is in a much different situation than a single person in a high cost of living area.

It would be more productive to focus on what goals you would want to hit when you are 40.

A few things you might do;

1) I have a very simple spreadsheet that I update each year with my net worth on January 1st. This lets me see my progress over the years. You might start doing that.

2) When I was about your age I committed to myself that I would save half of any future pay raises and I pretty well did that for a long time. This is a painless way to increase your savings since you are not used to seeing that money anyway. This also will also help prevent lifestyle creep. Savings can be things other than retirement savings like saving up a down payment for a house or paying down debt early. If you are already saving a modest amount then you could be saving 20% of your income by the time you are 40 and it would be pretty painless.

3) Have a plan for being able to pay cash for future cars if you are not already doing that. When you get a car paid off keep making your "car payment" into a car fund to have the cash to buy your next car. If you can get one car ahead then you can always be able to pay cash for future cars. I have known people in their 60s that have had car loans for 40 years and that has cost them a lot.
Three excellent suggestions.
1. Keeping up with your net worth annually will motivate you to continue living below your means.
2.Saving 1/2 of all pay raises is a painless way to add to your savings at a slightly faster rate each year. I would start out saving 20-30% of my take home pay. Unless you make a lot of money. Then it should be 40%.
3. This is a saving technique that isn t discussed much. But it is underrated in terms of how effective it is. Both for saving interest charges and adding interest accumulation to your savings. It also helps you limit the amount you spend on a depreciating asset.
I ve been in the relatively small group of people who have never made a car payment. I ve always bought cars I could pay cash for, even if the car was a worn out used car (high school). Then I made the “car payments” to myself, early on putting money each month into an envelope that was my accumulation fund for a new car. That envelope, plus the proceeds from the sale of my old car, plus a very small amount from our contingency fund, was the limit I could spend on a new car. This method did require that I keep each car 7-10 years. But with my wife and me both being car enthusiasts , this saving method has allowed us to have some pretty nice cars.
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sergeant
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Re: At 30, what are some key financial milestones I should have hit?

Post by sergeant »

1. Have a job.
2. No debt other than mortgage. Renting is fine and probably preferred.
3. Contributing to IRA and 401k/457b.
4. Have an EF of at least 3 months.
5. Having lots of fun and doing things you enjoy.
AA- 20+ Years of Expenses Fixed Income/The remainder in Equities.
kimura king
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Re: At 30, what are some key financial milestones I should have hit?

Post by kimura king »

Sergeant nailed it. Stay hungry! Maintain health! Marry someone you will have a strong future with, financially and otherwise. Accumulating wealth for most, including most bogleheads, is a marathon. Be prepared for a marathon.
dvvader
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Re: At 30, what are some key financial milestones I should have hit?

Post by dvvader »

eigenperson wrote: Wed May 20, 2020 5:56 pm 1. You should have a career plan. You should already be acting in accordance with that plan.
2. You should have a financial plan for your life, including saving for retirement at a realistic age (70 or less), and your current lifestyle, spending, saving, and investing should reflect that plan. The plan should be based on present conditions, not what you optimistically hope will be true in the future, and should not use an excessively rosy rate of return on investment. That probably means you are saving at least 15% of your income.
3. You should have recognized and eliminated any maladaptive behaviors such as impulsive spending, gambling or shopping addictions, day trading, and so on.
4. You should understand the fundamentals of household finances: how interest is calculated; how auto, home, and medical insurance works; what stocks and bonds are and their historical performance. You should have a rough but accurate idea of the costs (both purchase price and maintenance) of important items such as homes, motor vehicles, electronics, clothing, food, and medical care, and know the difference between basic and luxury versions of these items.
5. You should have a budget or spending tracking system that includes inevitable costs that don't happen every year (e.g. a new car).
6. You should understand how the tax system works and be able to do your own taxes.
7. You should know how to recognize and avoid common scams, ranging from outright fraud to MLMs and whole life insurance.
8. If you have a spouse or partner, they should also have met the above milestones (exception: if your plan involves you supporting your partner, then they do not need a career plan) and you should have had enough explicit, detailed conversations about finances to be certain of that.
When I saw this thread I immediately thought that by 30 one should:

A. Have a definitive and realistic plan for life (career, finances, family, etc.), allowing for contingencies.
B. Be putting that plan into action.

I think eigenperson's list expands on my thoughts pretty well.
Normchad
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Re: At 30, what are some key financial milestones I should have hit?

Post by Normchad »

sergeant wrote: Wed May 20, 2020 8:51 pm 1. Have a job.
2. No debt other than mortgage. Renting is fine and probably preferred.
3. Contributing to IRA and 401k/457b.
4. Have an EF of at least 3 months.
5. Having lots of fun and doing things you enjoy.
+1. This is perfect. If you’ve done this at 30, you’re doing good. Also pay attention to #5.
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celia
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Re: At 30, what are some key financial milestones I should have hit?

Post by celia »

By 30, you should have:

Learned how to obtain a job.
Have a job that supports you unless you were in school/military/disabled.
Have filed your own taxes yourself.
Opened a checking account.
If you own a car, you should have obtained auto insurance (and understand what it covers).
Started repaying student loans, if any.
Have at least 3 months of expenses in an emergency fund.
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