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Posted: 03 Jun 2013 09:08 AM PDT
The following is the latest post in my "Reader Profiles" series. Each post in this series details the financial situation and challenges of an FMF reader. The purpose of this series is to help us all identify with people like us (in similar situations -- not all will be, of course, but eventually I'm sure you will find someone like you here), get to know the frequent commenters on the site, and hear some financial wisdom/challenges from people other than me.
If you're interested in contributing to this series, then drop me an email. The series seems to be very popular with readers and I need a steady stream of new ones to keep it going. Also, please leave constructive comments, questions, and so forth. Simply telling someone what a mess they have, how they have made poor decisions, and so forth is not helpful. There is a way to say, "That was a mistake, but here's what you can do to correct it" that both acknowledges the problem and offers a solution. It's this sort of feedback that this series is intended to solicit. Next in the series is FMF reader KP. He answered my questions (in red below) as follows: Please tell us a bit about yourself. I am a 29 year old single man living in the southern midwest region. I was very fortunate to have a good paying job right out of college in a city with a very low cost of living. I attended a public university where my four years on campus cost my parents and I a combined $25,000 (my parents paid $21,000 and I paid $4,000 with loans). This low cost was enabled through a combination scholarships and some federal/state grants. Through summer jobs I was able to graduate college with no debt. My gross pay each year is $110,000. We do not have a 401K match, but do receive a profit sharing contribution each year (company stock; should be ~$10,000 this year for me). If I stayed at my current company until age 55, I would be able to retire with a very nice net worth. However I am currently debating transitioning to a lower stress job in a different city. Describe your financial situation (who works in your family, how your income is (general), how your expenses are, etc.). Income
This may sound ridiculous, but with interest rates so low, my biggest issue is knowing where to park excess cash. My 401k is maxed each year as is my Roth IRA contribution. One reason my mortgage balance is so slow for only having lived in the house 4 years, is a do bi weekly payments and also made a one time $20,000 payment a few weeks ago. I am somewhat risk adverse, so I do not like to have too much money in the stock market. I do plan on doing about $5000 in home repairs this summer (new paint + driveway) which is why the checking balance is a bit high. What are your plans for the future (retire early, build your career, etc.)? Longer-term I do not plan on staying in my current job until I hit 55. I am worried I would get burnt out and not be happy looking back. Over the past few years I have dabbled in side startups but nothing has worked out (part of my hobby budget). Ideally I would love to start a business and run it full time. I do wish to have a family in the future and be able to take future kids on trips (not just Disney but also international) as well as pay a portion of their college costs (maybe 3 years or something). When the family does start, I will front load the 529 plans as much as possible. I have worked since I was 13 (my parents owned a small business and I was paid $1 an hour until age 16!!) and consider myself to be financially savvy. What's your best piece(s) of financial advice and/or your general philosophy on personal finances? Best advice: In college I read John Bogle's (Vanguard founder) book on index funds. The vast majority of investors should follow his advice and keep costs low by investing in index funds. Also never but a load fund; only no load funds. My personal philosophy is money is nice to have but it won't make you happy. I'd rather have a middle income/net worth life with a happy loving relationships (family & friends) versus a high income / networth life without them. |
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