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Old 10-08-2013, 05:59 PM   #1
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Default Savings challenge: $100k in five years.

So as many know I live pretty frugally. I don't mind spending money for things I enjoy but I just don't have an urge to spend tons of money on things that most do.

As I'm sort of starting over and have depleted most of my Japan savings prior to my new job I want to issue myself another challenge: To see if I can accumulate $100k in savings in less than 5 years.

The main components of the plan are:

1. Keeping bills and living expenses very low.

2. Maxing out my 401k contribution.

3. Additional savings going into my personal brokerage account.

I've already set up my 401k contributions to basically give me the max which is $17,000 per year. The great thing about this is that since it is pre-tax it doesn't really hurt me all that bad in terms of net pay.

After max contribution with my current training salary I should bring home approximately $2,200 after health insurance.

Currently living in an RV but my aunt is willing to rent me her house for $250 per month utilities included for the two weeks I will be on shore. She built an attachment out back that she lives in and now that her kids are grown and gone she has the entire front of the house empty.

So $250 rent including utilities.
$60 AT&T prepaid data plan.
$75 car insurance.
$80 per month in gas to and from the heliport that takes me to the rig.
$40 in gas for the two weeks I'll be home.
$300 per month (two weeks I'm home) for basic groceries.
$800 in misc spending money (again just for two weeks).

Remaining- $595 to go into brokerage account per month.

$595x12= $7,140 per year + $17,000 401k contribution = $24,140.

$24,000 x 5 years with an average return of just 5% = $139,245.

And this is computing just from my training salary. In 9 months I get a 25% raise but I figure if the numbers work with my training salary then it means I just have a lot more wiggle room once I start earning more.

Will I fail? Guess we'll see. It's basically what I did before I moved to Japan but just taking it even more extreme. Who knows, maybe in 5 years time I'll go crazy again, quit my job, and then do the whole adventuring around the world thing without a job one more time (that said this time I'm gonna try and do it on the company's dime haha).

Anyone else want to share experiences?
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Old 10-08-2013, 06:05 PM   #2
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Default Re: Savings challenge: $100k in five years.

$250 a month? **** my cable and Gas/Electric is that much.
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Old 10-08-2013, 06:08 PM   #3
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Default Re: Savings challenge: $100k in five years.

Roommates make it easy.
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Old 10-08-2013, 06:11 PM   #4
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Default Re: Savings challenge: $100k in five years.

in 8 years living in my current home i havent seen a single power bill under $400 let alone a mortgage with taxes and ins. $250? that's a gift, lol.
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Old 10-08-2013, 06:13 PM   #5
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Default Re: Savings challenge: $100k in five years.

I should have done something like this from 23-28. I managed to save about 25k (not including 401k) when I was around 28, before the Mrs. and I bought our home.
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Old 10-08-2013, 06:16 PM   #6
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Default Re: Savings challenge: $100k in five years.

FWIW, my fiance has maxed out her 401k since she got a full time job 8 years ago, currently over 145k in that account. IMO thats the way to go as it's pre tax and you cant get to the money very easily...
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Old 10-08-2013, 06:17 PM   #7
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Default Re: Savings challenge: $100k in five years.

Good luck!

The only way I hope you fail is that you find a woman, get married, and produce offspring.

Other than that, I'll be waiting to see progress in 2018.

If you can do it, go for it. The proposed living standards are out of my realm of acceptable.

Tony Tone needs to invest in some ceiling fans, ahaha.
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Old 10-08-2013, 06:23 PM   #8
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Default Re: Savings challenge: $100k in five years.

trying to reach a similar goal but i have to put 1k a month to the side for the wedding fund lol.

currently i have about 15% of my salary going to the the work 403b funds. and i set aside like 400 a month for my roth ira and mutual funds.
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Old 10-08-2013, 06:24 PM   #9
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Default Re: Savings challenge: $100k in five years.

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$250 a month? **** my cable and Gas/Electric is that much.
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in 8 years living in my current home i havent seen a single power bill under $400 let alone a mortgage with taxes and ins. $250? that's a gift, lol.
Advantages of small town Alabama haha. The house:
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Old 10-08-2013, 06:26 PM   #10
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Default Re: Savings challenge: $100k in five years.

I think it's very possible, especially since you have proven that you can live below your means.. Also, I suspect your salary range will also be conducive towards achieving your goal.

side question for rguy's situation, are men eligible for half of their spouse's retirement funds in cases of divorce? brake jobs on godzilla ain't cheap!
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Old 10-08-2013, 06:37 PM   #11
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Default Re: Savings challenge: $100k in five years.

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If you can do it, go for it. The proposed living standards are out of my realm of acceptable.
Well the thing to remember is that my expenses are only for two weeks as for two weeks out of the month I'll be on an oil rig with all of my daily living expenses covered. All of my grocery and spending money is just for two weeks so in a way you can sort of double it as that is roughly the quality of life I will have in typical monthly terms. In other words it would be closer to someone who has a grocery budget of $600 per month with a $1,600 per month "fun money" allowance. $800 in fun money for two weeks after all expenses, gas and groceries have been paid is still plenty of money to have tons of fun. Especially considering some months I'm sure I'll spend barely any of it just chilling at the house while other months I'll be off traveling or doing whatever.

And again it will only be for 9 months as once my training period if complete I receive a notable raise which if I leave all my contributions the same in raw dollar amounts would give me an additional $750 net take home increase for play money purposes.

I'm just hoping to show what might be possible even on a relatively modest income (my training pay).
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Old 10-08-2013, 06:39 PM   #12
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Default Re: Savings challenge: $100k in five years.

So giving up on five years worth of experiences and other things you may enjoy all for the sake of surpassing some arbitrary amount of net worth which probably won't even put you in the wealthiest quarter of Americans?

Wasn't the point of this new job so that you could travel the world all the time? I'd definitely go that route instead. Life is defined by your experiences. My brother is a penny pinching "frugal lyfe" dude and it's annoying as ****. The only time he ever wants to do anything is when I float him for whatever money it would cost.

My philosophy is that money is made to be spent. I've seen too many not-that-old people die with too much money and too many regrets. What a waste. I see you allocated $800/month to "misc" though - what will that money go towards?

Believe me, I'm not the type of person who buys **** just to buy ****, but I HATE turning down vacations, dinners, concerts, snowboard trips etc. with friends and family. I'd rather not have a ton of money, but have all those experiences under my belt.
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Old 10-08-2013, 06:43 PM   #13
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Default Re: Savings challenge: $100k in five years.

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side question for rguy's situation, are men eligible for half of their spouse's retirement funds in cases of divorce? brake jobs on godzilla ain't cheap!
Reason #1 why I need to marry a Japanese girl. U.S. and Japan don't have the "marriage treaty" that most other first world countries have. Basically the U.S. and Japan don't really recognize each other's marriages from a legal standpoint so neither party can get the other's monies as long as they simply move back to their own country.
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Old 10-08-2013, 06:45 PM   #14
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Default Re: Savings challenge: $100k in five years.

I think your plan should be quite doable.

Don't forget about the employer matching 5% plus the 4% at the end of the year.

Do you guys get to participate in the Stock purchase program? That is an easy way to turn a little instant profit.

For their 401K matching (as well as stock purchase), is it a percentage of your base salary or does your daily rate factor into that equation?

I am pretty well on track to save that amount in 5 years, and my expenses are higher than yours, and pretty sure that you will be making more money than me.
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Old 10-08-2013, 06:46 PM   #15
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Default Re: Savings challenge: $100k in five years.

I know you can do it. I could do it in half that time but it would require doing traveling turbine work with a military like schedual and leaving my hot young wife at home. 12hrs a day 7 days a week for months at a time. Every year I get a little wiser and hate myself just a little bit more for not doing that **** pre wife/mortgage when I could have used mom and dads as home base and saved up that kind of money every year till I got burnt out or spend happy.

Instead I chose the comfy route, always worked hard enough to stay comfy and still comfy today. Shoulda went hardcore, could be ballin right now with a cash bought house in CA with my biggest stress being wether or not I want to spend my yearly income on some sort of frivolous car or boat. To anyone: if you ever get a chance to choose the comfy route or the hardcore route in your 20's, go hard.
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Old 10-08-2013, 06:55 PM   #16
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Default Re: Savings challenge: $100k in five years.

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So giving up on five years worth of experiences and other things you may enjoy all for the sake of surpassing some arbitrary amount of net worth which probably won't even put you in the wealthiest quarter of Americans?

Wasn't the point of this new job so that you could travel the world all the time? I'd definitely go that route instead. Life is defined by your experiences. My brother is a penny pinching "frugal lyfe" dude and it's annoying as ****. The only time he ever wants to do anything is when I float him for whatever money it would cost.

My philosophy is that money is made to be spent. I've seen too many not-that-old people die with too much money and too many regrets. What a waste. I see you allocated $800/month to "misc" though - what will that money go towards?
Read it one more time.

1. Calculations are based on my training salary.

2. Traveling the world plan is once I'm done with training, get some experience, and then get myself on an overseas rig....which if that occurs I'll be making more than twice as much with the company paying for my flight anywhere in the world.

3. Money is made to be spent? Bitch I quit the FBI and lived in Japan for damn near 3 years! I'm the god king of spending money to get dem crazy life experiences.

My view is that most people simply spend money on worthless **** that doesn't add any experience to their life. The norm is the "money is made to spend it" philosophy but the problem is I don't see a new car payment every 3-4 years and a house that is 1,000sq/ft larger than you will ever as "living". That's just called "bills".
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Old 10-08-2013, 06:56 PM   #17
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Default Re: Savings challenge: $100k in five years.

Funny you posted this.

I just did exactly what you are setting out to do, last week in fact.

I graduated and got my field job when I was 25, almost 26 years old. I had set a goal to hit 100k in savings before 30. I turned 29 on Sunday and just last week I hit my 100k, debt free goal. Took 3.5 years.

That 100k does not include the equity in my house or my car or anything else. Just 401k, Roths IRA's and cash.

I hadn't really realized I was so close. I had big time front loaded my 401k in the beginning of the year, like 30% of my wage. Right now my 401k is showing a 15% gain for year, which obviously helped a lot. In July i needed to scale back my contributions to make sure I didn't go over the 17.5k or miss any employer contributions.


Also, living frugally doesn't necessarily mean being cheap. Hell, I spent 6 weeks in Europe last summer, have a decent house, and modify my cars at will. The key is living somewhere with a low cost of living and having zero debt.

I chose to go hardcore before I hit 30 to hopefully make life way easier in the long run. The funny thing is I gained a ton of skills, a killer work ethic, and traveled the world on someone else's dime in the process.

Good luck, you won't regret it!
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Old 10-08-2013, 06:58 PM   #18
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Default Re: Savings challenge: $100k in five years.

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I think your plan should be quite doable.

Don't forget about the employer matching 5% plus the 4% at the end of the year.

Do you guys get to participate in the Stock purchase program? That is an easy way to turn a little instant profit.

For their 401K matching (as well as stock purchase), is it a percentage of your base salary or does your daily rate factor into that equation?

I am pretty well on track to save that amount in 5 years, and my expenses are higher than yours, and pretty sure that you will be making more money than me.
401k matching on base or total is a good question that I've never even though of asking about. I assumed it was on total pay but I will definitely check.

And yeah we have the stock purchase program.
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Old 10-08-2013, 07:02 PM   #19
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Default Re: Savings challenge: $100k in five years.

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And yeah we have the stock purchase program.
Max that out too if you can, even if it's just to unload it on the day shares are rewarded... Most plans will give you 15% discount, free money.

The goal itself isn't too far fetched, I don't see why it wouldn't be possible... Your plan sounds solid.
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Old 10-08-2013, 07:03 PM   #20
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Default Re: Savings challenge: $100k in five years.

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FWIW, my fiance has maxed out her 401k since she got a full time job 8 years ago, currently over 145k in that account. IMO thats the way to go as it's pre tax and you cant get to the money very easily...
Yep, this is what I've been doing. Currently at $30k after ~3 years of contributing. Not terrible, has been performing quite well lately. I may consolidate them to a single plan but haven't gotten around to it.

With AA, the plan isn't feasible for most (IMO) due to the insanely low rent. My car insurance alone is $250. I'm just riding everything out as is and have carved out a portion of my paychecks to a checking/savings account that I do not use at all. That's going in as my 'savings' along with the 401k.
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Old 10-08-2013, 07:04 PM   #21
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Default Re: Savings challenge: $100k in five years.

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Funny you posted this.

I just did exactly what you are setting out to do, last week in fact.

I graduated and got my field job when I was 25, almost 26 years old. I had set a goal to hit 100k in savings before 30. I turned 29 on Sunday and just last week I hit my 100k, debt free goal. Took 3.5 years.

That 100k does not include the equity in my house or my car or anything else. Just 401k, Roths IRA's and cash.

Also, living frugally doesn't necessarily mean being cheap. Hell, I spent 6 weeks in Europe last summer, have a decent house, and modify my cars at will. The key is living somewhere with a low cost of living and having zero debt.

I chose to go hardcore before I hit 30 to hopefully make life way easier in the long run. The funny thing is I gained a ton of skills, a killer work ethic, and traveled the world on someone else's dime in the process.

Good luck, you won't regret it!
Awesome stuff.

The bold part is what most people don't seem to get. I've said it many times but by intentionally living below your means you can more easily live ABOVE you means when it actually matters. Frugal just means = "I'm going to try not to spend ungodly amounts of money every month on **** that serves no real purpose."

By having no debt and living frugally I had the money to throw away on just about anything I wanted whenever I wanted without a care in the world. THAT is a hell of a lot more ballin than being a "payment plan baller".
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Old 10-08-2013, 07:07 PM   #22
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Default Re: Savings challenge: $100k in five years.

Between the wife and I we are already on track for that. If we kept our current savings exactly the way it is we would have 100k in less than 3.5 years. After a couple bills are paid and as we get raises our saving increases.
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Old 10-08-2013, 07:09 PM   #23
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Max that out too if you can, even if it's just to unload it on the day shares are rewarded... Most plans will give you 15% discount, free money.
Yeah I'm going to have to punch the numbers and see what the stipulations are but that might end up being a far better use of my remaining money.
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Old 10-08-2013, 07:12 PM   #24
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Awesome stuff.

The bold part is what most people don't seem to get. I've said it many times but by intentionally living below your means you can more easily live ABOVE you means when it actually matters. Frugal just means = "I'm going to try not to spend ungodly amounts of money every month on **** that serves no real purpose."

By having no debt and living frugally I had the money to throw away on just about anything I wanted whenever I wanted without a care in the world. THAT is a hell of a lot more ballin than being a "payment plan baller".
I agree completely.

Also, I buy a lot of dumb ****. I have no problem dropping 1k on a set of used BBS rims or $500+ on a vintage K ride cymbal (I play drums), BUT this **** is still going to be worth what I paid for it in 10 years!
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Old 10-08-2013, 07:21 PM   #25
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Default Re: Savings challenge: $100k in five years.

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Frugal just means = "I'm going to try not to spend ungodly amounts of money every month on **** that serves no real purpose."
I guess it depends who you ask My mom's actually way worse than my brother. Would sooner keep a pair of 12 year old gardening sneakers (that used to be mine) taped together with duct tape 6 times over than pay $20 for new ones. Has never gotten herself drive-thru food in her entire lifetime, always buys cars new but has never owned a car with power windows, etc. Ask her and she'll tell you she's frugal, though personally I think she's borderline insane
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