First Years: how much cash have you saved over the past year?

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Re: First Years: how much cash have you saved over the past year?

Postby Anonymous User » Thu Sep 08, 2016 7:03 pm

Anonymous User wrote:
DportIA wrote:
Anonymous User wrote:
Anonymous User wrote:
Anonymous User wrote:$71,000 exactly twelve months in. I maxed out 401k and IRA during my stub year, and have maxed out 401K and IRA for 2016. I have about $24k in taxable at this point.


How are you maxing IRA? Also, are you in Texas? That's a crazy amount put away.


Yeah, just rough calculation but it looks like that means having only roughly 25k in expenses over 12 months.


Apologies, that $71k counts all vehicles (bank emergency fund, 401k, IRA and taxable investment accounts). My expenses are $1k/mo in rent, and then $1,500-2,000/month in discretionary spending, which leaves about $7-8k a month to do whatever with. I have chosen to save it. Chicago.


Interesting, CA market paying firm and I get $8,200 a month (after 401k deduction and healthcare). So you're saying you get like $9,500-$10,500 a month? Are CA taxes that high?


So I am probably a paycheck rarity. I maxed out my 401k and IRA in January/February, so my paychecks now only have $200 pre-tax health insurance deducted, so I get between $9,700-10,200 monthly direct deposited (higher end once the SS limit is hit around $118k of compensation). IL having a relatively low 0.0375 income tax helps.

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Re: First Years: how much cash have you saved over the past year?

Postby jkpolk » Thu Sep 08, 2016 7:26 pm

$0

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Re: First Years: how much cash have you saved over the past year?

Postby Anonymous User » Thu Sep 08, 2016 7:56 pm

I feel like I do not live lavishly, yet I only have 14k in the bank. 401K is not maxed, will probably have 10k by January 1. 3k monthly loan payments, no idea how I have not saved more.

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Re: First Years: how much cash have you saved over the past year?

Postby upupandaway » Thu Sep 08, 2016 8:41 pm

Anonymous User wrote:I feel like I do not live lavishly, yet I only have 14k in the bank. 401K is not maxed, will probably have 10k by January 1. 3k monthly loan payments, no idea how I have not saved more.


Do you mind if I ask what city you live/practice in?

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Re: First Years: how much cash have you saved over the past year?

Postby yost » Thu Sep 08, 2016 9:17 pm

unlicensedpotato wrote:
jbagelboy wrote:Its not so much about cash saved as loan balance paid. Unless you have sophisticated training as an investor, why not place as much money as possible toward your 6-8% interest bearing loans.


Eh, I hear this a lot. I would certainly either refi or attack or both any loans that are 7%+. But once you're talking about 5-6% interest, I would be buying index funds. Young people can handle the volatility and all the evidence suggests you'll get more than 6% annually on average in the stock market.

My firm also offers a Roth 401k, which is good if you have the option.


Fair point, but the comparison here is a guaranteed 5/6% return vs. an expected (but not guaranteed) 7/8% return.

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Re: First Years: how much cash have you saved over the past year?

Postby Anonymous User » Thu Sep 08, 2016 11:16 pm

2014 wrote:
estefanchanning wrote:
2014 wrote:Basically all of what would otherwise be savings has gone to loans, which I'm dumping $3500ish a month into. I'm (for better or worse) treating available credit limit as my runway should shit hit the fan. The raise and impending bonus are financing my 401k and a few moderate QOL adjustments in lieu of just sitting on the cash. I basically am at a steady state of being able to do whatever and not stressing about money but by no means am comfortable.


how much loans do you have/how long do you forsee it will take to pay them off?

Started with 280kish (had some from undergrad) and haven't looked recently but probably like 250k now. At my current rate I think we are looking at 7-8 years and if I pay more aggressively as earnings go up as soon as 4-5.

Realistically though I'm likely to refinance everything with First Republic at some point early next year and dump them all into a low rate 10-year and just pay them off in 10.


Have you been working for one year or two? For one year, that's a pretty decent pay rate.

I pay $3,500 to gov't loans per month with about half your initial balance. So I'm only paying off a little over $40k per year. Increasing by $500 per month each year consistent with my pay bumps, I'll have paid off my loans including interest roughly three years from now, assuming I stay to 4th yr associate at a firm.

Once the loans are paid, I feel like I'll have the flexibility to go to government and never look back.

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Re: First Years: how much cash have you saved over the past year?

Postby 2014 » Thu Sep 08, 2016 11:38 pm

Anonymous User wrote:
2014 wrote:
estefanchanning wrote:
2014 wrote:Basically all of what would otherwise be savings has gone to loans, which I'm dumping $3500ish a month into. I'm (for better or worse) treating available credit limit as my runway should shit hit the fan. The raise and impending bonus are financing my 401k and a few moderate QOL adjustments in lieu of just sitting on the cash. I basically am at a steady state of being able to do whatever and not stressing about money but by no means am comfortable.


how much loans do you have/how long do you forsee it will take to pay them off?

Started with 280kish (had some from undergrad) and haven't looked recently but probably like 250k now. At my current rate I think we are looking at 7-8 years and if I pay more aggressively as earnings go up as soon as 4-5.

Realistically though I'm likely to refinance everything with First Republic at some point early next year and dump them all into a low rate 10-year and just pay them off in 10.


Have you been working for one year or two? For one year, that's a pretty decent pay rate.

I pay $3,500 to gov't loans per month with about half your initial balance. So I'm only paying off a little over $40k per year. Increasing by $500 per month each year consistent with my pay bumps, I'll have paid off my loans including interest roughly three years from now, assuming I stay to 4th yr associate at a firm.

Once the loans are paid, I feel like I'll have the flexibility to go to government and never look back.

Only been working one year and have no regrets about my savings rate so far, think it's making the best of a tough debt situation while no making so many QOL sacrifices as to artificially limit my tenure at a firm.

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Re: First Years: how much cash have you saved over the past year?

Postby Winter is Coming » Fri Sep 09, 2016 12:56 am

This is a good thread, shows the gap between planning and reality. I appreciate all this.

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Re: First Years: how much cash have you saved over the past year?

Postby Anonymous User » Fri Sep 09, 2016 1:33 am

From January until today, YNAB tells me I have:

[*] Paid approximately $25k towards my loans (obviously, some went to interest)
[*] Went from $10,000 in my emergency fund / refi pot to $28,500.
[*] Improved my net worth ~34k

Bay Area, single income. My autodebit for this month hasn't happened yet, but I will send approximately 4.2k out this month on debt, 1k to refi pot, the rest to living expenses. I should have done more, but I will take ~40k over 8 months.

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Re: First Years: how much cash have you saved over the past year?

Postby Anonymous User » Fri Sep 09, 2016 1:46 am

Wife and my net worth up ~48k since a year ago. Mostly paying down debt and some retirement contributions. Already had a decent emergency fund.

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Re: First Years: how much cash have you saved over the past year?

Postby Anonymous User » Fri Sep 09, 2016 6:53 am

With wife's salary (100K) we have 60k saved this past year.

How on earth are people paying 5-7%+ on loans???? Interest have never in all of human history been cheaper. Refi-ed at first republic for 2.95%, 10 year, and will pay the minimum on that forever. The savings are in a high yield checking account until we have enough for a down payment.

Not contributing much to 401k because where we live, saving for down payment and getting equity in real estate > tax benefits of 401k.

And to clarify - No one in big law firm with 401k can do Roth, back door or not, right?

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Re: First Years: how much cash have you saved over the past year?

Postby Danger Zone » Fri Sep 09, 2016 8:08 am

Anonymous User wrote:With wife's salary (100K) we have 60k saved this past year.

How on earth are people paying 5-7%+ on loans???? Interest have never in all of human history been cheaper. Refi-ed at first republic for 2.95%, 10 year, and will pay the minimum on that forever. The savings are in a high yield checking account until we have enough for a down payment.

Not contributing much to 401k because where we live, saving for down payment and getting equity in real estate > tax benefits of 401k.

And to clarify - No one in big law firm with 401k can do Roth, back door or not, right?

Yes, you can do back door. Everyone can do back door.
Last edited by Danger Zone on Sat Jan 27, 2018 3:12 pm, edited 1 time in total.

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Re: First Years: how much cash have you saved over the past year?

Postby Pokemon » Fri Sep 09, 2016 9:54 am

2014 wrote:
Anonymous User wrote:
2014 wrote:
estefanchanning wrote:
2014 wrote:Basically all of what would otherwise be savings has gone to loans, which I'm dumping $3500ish a month into. I'm (for better or worse) treating available credit limit as my runway should shit hit the fan. The raise and impending bonus are financing my 401k and a few moderate QOL adjustments in lieu of just sitting on the cash. I basically am at a steady state of being able to do whatever and not stressing about money but by no means am comfortable.


how much loans do you have/how long do you forsee it will take to pay them off?

Started with 280kish (had some from undergrad) and haven't looked recently but probably like 250k now. At my current rate I think we are looking at 7-8 years and if I pay more aggressively as earnings go up as soon as 4-5.

Realistically though I'm likely to refinance everything with First Republic at some point early next year and dump them all into a low rate 10-year and just pay them off in 10.


Have you been working for one year or two? For one year, that's a pretty decent pay rate.

I pay $3,500 to gov't loans per month with about half your initial balance. So I'm only paying off a little over $40k per year. Increasing by $500 per month each year consistent with my pay bumps, I'll have paid off my loans including interest roughly three years from now, assuming I stay to 4th yr associate at a firm.

Once the loans are paid, I feel like I'll have the flexibility to go to government and never look back.

Only been working one year and have no regrets about my savings rate so far, think it's making the best of a tough debt situation while no making so many QOL sacrifices as to artificially limit my tenure at a firm.



You are like my financial twin except I am class of 2014. First year I was on IBR and was trying to pay my debt like crazy. I barely made any damage to it and only saved 12k. In December I moved to repaye and it has been a huge stress release. My savings have gone close to 60k (including 401k) in a year. I feel like I am growing savings at a faster rate than I was doing damage to the debt. Also, the 10% that repaye forces you to pay is not a ton. I have also maxed 401k. Plan is to save on the side for tax bomb.

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Re: First Years: how much cash have you saved over the past year?

Postby Anonymous User » Fri Sep 09, 2016 10:29 am

upupandaway wrote:
Anonymous User wrote:I feel like I do not live lavishly, yet I only have 14k in the bank. 401K is not maxed, will probably have 10k by January 1. 3k monthly loan payments, no idea how I have not saved more.


Do you mind if I ask what city you live/practice in?


Texas. I do have a mortgage on a house as well, so between that and loans I spend close to 6k at the beginning of each month.

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Re: First Years: how much cash have you saved over the past year?

Postby gregfootball2001 » Fri Sep 09, 2016 10:41 am

Nothing. Nannies are way more expensive than I thought.

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Re: First Years: how much cash have you saved over the past year?

Postby Anonymous User » Fri Sep 09, 2016 12:29 pm

2.95% refi? How is that possible? How long after graduating can you do that and what type of credit history do you need to have?

My loans--mostly federal stafford, some perkins--vary between 5% and 6.8%. If I could get those numbers down, it would be a huge win. What is the refinance process like and what are the prerequisites?

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Re: First Years: how much cash have you saved over the past year?

Postby oblig.lawl.ref » Fri Sep 09, 2016 1:26 pm

Anonymous User wrote:
Not contributing much to 401k because where we live, saving for down payment and getting equity in real estate > tax benefits of 401k.




I hear this about real estate a lot but I've also seen the statistic below a lot. Are we so sure that real estate is such a good investment? Also I realize that data is generalized and doesn't reflect hot markets for real estate but doesn't that make it much more speculative and potentially volatile? I know it's just this year but my 401k is up 13% this year. I've heard similar things from people in recent years (I'm a first year).

"Nobel-prize-winning economist Robert Shiller is famous for his studies of the housing market, and his data suggests that housing prices have grown at a compound annual rate of just 0.3% during the past century (inflation-adjusted), while the S&P 500 has averaged roughly 6.5%."

Source: http://www.fool.com/investing/general/2 ... tment.aspx

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Re: First Years: how much cash have you saved over the past year?

Postby 2014 » Fri Sep 09, 2016 4:52 pm

oblig.lawl.ref wrote:
Anonymous User wrote:
Not contributing much to 401k because where we live, saving for down payment and getting equity in real estate > tax benefits of 401k.




I hear this about real estate a lot but I've also seen the statistic below a lot. Are we so sure that real estate is such a good investment? Also I realize that data is generalized and doesn't reflect hot markets for real estate but doesn't that make it much more speculative and potentially volatile? I know it's just this year but my 401k is up 13% this year. I've heard similar things from people in recent years (I'm a first year).

"Nobel-prize-winning economist Robert Shiller is famous for his studies of the housing market, and his data suggests that housing prices have grown at a compound annual rate of just 0.3% during the past century (inflation-adjusted), while the S&P 500 has averaged roughly 6.5%."

Source: http://www.fool.com/investing/general/2 ... tment.aspx

Has to depend on individual circumstances right? Rent isn't necessarily purely efficient in the sense of being a proxy for what a mortgage + HOA dues would run you. In any event, if your all in costs of owning a house are substantially similar to your rent if you rented the same place, you are purely benefiting from owning since foregoing owning would lead to any more investable cash, the same cash would just go to a landlord instead of a bank.

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Re: First Years: how much cash have you saved over the past year?

Postby Hikikomorist » Fri Sep 09, 2016 4:55 pm

This thread is fairly terrifying.

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Re: First Years: how much cash have you saved over the past year?

Postby Anonymous User » Fri Sep 09, 2016 5:42 pm

2014 wrote:
oblig.lawl.ref wrote:
Anonymous User wrote:
Not contributing much to 401k because where we live, saving for down payment and getting equity in real estate > tax benefits of 401k.




I hear this about real estate a lot but I've also seen the statistic below a lot. Are we so sure that real estate is such a good investment? Also I realize that data is generalized and doesn't reflect hot markets for real estate but doesn't that make it much more speculative and potentially volatile? I know it's just this year but my 401k is up 13% this year. I've heard similar things from people in recent years (I'm a first year).

"Nobel-prize-winning economist Robert Shiller is famous for his studies of the housing market, and his data suggests that housing prices have grown at a compound annual rate of just 0.3% during the past century (inflation-adjusted), while the S&P 500 has averaged roughly 6.5%."

Source: http://www.fool.com/investing/general/2 ... tment.aspx

Has to depend on individual circumstances right? Rent isn't necessarily purely efficient in the sense of being a proxy for what a mortgage + HOA dues would run you. In any event, if your all in costs of owning a house are substantially similar to your rent if you rented the same place, you are purely benefiting from owning since foregoing owning would lead to any more investable cash, the same cash would just go to a landlord instead of a bank.


I agree with that, but disagree about buying real estate. You never buy real estate hoping that your house will appreciate. Normally your house just appreciates with inflation. Sometimes people get lucky, but doesn't happen always. But if you buy it as an investment, i.e. buy it with an eye towards renting it out after you move or having a roommate pay part of your mortgage, I'd go real estate over stocks every day. I'm actually looking at buying my second property. I'm the poster from before who owns the duplex.

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Re: First Years: how much cash have you saved over the past year?

Postby Anonymous User » Fri Sep 09, 2016 6:18 pm

Anonymous User wrote:
2014 wrote:
oblig.lawl.ref wrote:
Anonymous User wrote:
Not contributing much to 401k because where we live, saving for down payment and getting equity in real estate > tax benefits of 401k.




I hear this about real estate a lot but I've also seen the statistic below a lot. Are we so sure that real estate is such a good investment? Also I realize that data is generalized and doesn't reflect hot markets for real estate but doesn't that make it much more speculative and potentially volatile? I know it's just this year but my 401k is up 13% this year. I've heard similar things from people in recent years (I'm a first year).

"Nobel-prize-winning economist Robert Shiller is famous for his studies of the housing market, and his data suggests that housing prices have grown at a compound annual rate of just 0.3% during the past century (inflation-adjusted), while the S&P 500 has averaged roughly 6.5%."

Source: http://www.fool.com/investing/general/2 ... tment.aspx

Has to depend on individual circumstances right? Rent isn't necessarily purely efficient in the sense of being a proxy for what a mortgage + HOA dues would run you. In any event, if your all in costs of owning a house are substantially similar to your rent if you rented the same place, you are purely benefiting from owning since foregoing owning would lead to any more investable cash, the same cash would just go to a landlord instead of a bank.


I agree with that, but disagree about buying real estate. You never buy real estate hoping that your house will appreciate. Normally your house just appreciates with inflation. Sometimes people get lucky, but doesn't happen always. But if you buy it as an investment, i.e. buy it with an eye towards renting it out after you move or having a roommate pay part of your mortgage, I'd go real estate over stocks every day. I'm actually looking at buying my second property. I'm the poster from before who owns the duplex.


This was my idea when I bought as a first year. Got a 3 bedroom low maintenance (read no yard/land) that is close to downtown/in a desirable area. The idea is that when I move in 5+ years, I will rent it out and someone will pay my mortgage off for me (assuming rental rates don't fall dramatically and I can't cover my mortgage). Plus, the interest tax deduction is helpful. Then again, I am the poster with only 14k in the bank and 10k in 401(K) - so maybe I am not doing it right.

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Re: First Years: how much cash have you saved over the past year?

Postby Anonymous User » Fri Sep 09, 2016 7:04 pm

Anonymous User wrote:
Anonymous User wrote:
2014 wrote:
oblig.lawl.ref wrote:
Anonymous User wrote:
Not contributing much to 401k because where we live, saving for down payment and getting equity in real estate > tax benefits of 401k.




I hear this about real estate a lot but I've also seen the statistic below a lot. Are we so sure that real estate is such a good investment? Also I realize that data is generalized and doesn't reflect hot markets for real estate but doesn't that make it much more speculative and potentially volatile? I know it's just this year but my 401k is up 13% this year. I've heard similar things from people in recent years (I'm a first year).

"Nobel-prize-winning economist Robert Shiller is famous for his studies of the housing market, and his data suggests that housing prices have grown at a compound annual rate of just 0.3% during the past century (inflation-adjusted), while the S&P 500 has averaged roughly 6.5%."

Source: http://www.fool.com/investing/general/2 ... tment.aspx

Has to depend on individual circumstances right? Rent isn't necessarily purely efficient in the sense of being a proxy for what a mortgage + HOA dues would run you. In any event, if your all in costs of owning a house are substantially similar to your rent if you rented the same place, you are purely benefiting from owning since foregoing owning would lead to any more investable cash, the same cash would just go to a landlord instead of a bank.


I agree with that, but disagree about buying real estate. You never buy real estate hoping that your house will appreciate. Normally your house just appreciates with inflation. Sometimes people get lucky, but doesn't happen always. But if you buy it as an investment, i.e. buy it with an eye towards renting it out after you move or having a roommate pay part of your mortgage, I'd go real estate over stocks every day. I'm actually looking at buying my second property. I'm the poster from before who owns the duplex.


This was my idea when I bought as a first year. Got a 3 bedroom low maintenance (read no yard/land) that is close to downtown/in a desirable area. The idea is that when I move in 5+ years, I will rent it out and someone will pay my mortgage off for me (assuming rental rates don't fall dramatically and I can't cover my mortgage). Plus, the interest tax deduction is helpful. Then again, I am the poster with only 14k in the bank and 10k in 401(K) - so maybe I am not doing it right.


Im assuming you put something down on the house so its not like you only have 24k saved. Id count your equity as well.

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Re: First Years: how much cash have you saved over the past year?

Postby cannibal ox » Fri Sep 09, 2016 7:20 pm

Tag.

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Re: First Years: how much cash have you saved over the past year?

Postby hous » Fri Sep 09, 2016 9:46 pm

Salary of $65k as a first year. I saved $27k my first year including IRA, 401k and HSA. I also received a $2,800 as an employers match. Paid off $8,000/50,000 in student loan principal and $7,000 on a car note. Net worth increased by $44,000. Just finished second year and saved the same. Net worth +$90,000 in two years. Goal is to FIRE in 13 years.

*No mortgage on home.

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Re: First Years: how much cash have you saved over the past year?

Postby Anonymous User » Sun Sep 11, 2016 2:26 pm

Anonymous User wrote:
Anonymous User wrote:
Anonymous User wrote:
I agree with that, but disagree about buying real estate. You never buy real estate hoping that your house will appreciate. Normally your house just appreciates with inflation. Sometimes people get lucky, but doesn't happen always. But if you buy it as an investment, i.e. buy it with an eye towards renting it out after you move or having a roommate pay part of your mortgage, I'd go real estate over stocks every day. I'm actually looking at buying my second property. I'm the poster from before who owns the duplex.


This was my idea when I bought as a first year. Got a 3 bedroom low maintenance (read no yard/land) that is close to downtown/in a desirable area. The idea is that when I move in 5+ years, I will rent it out and someone will pay my mortgage off for me (assuming rental rates don't fall dramatically and I can't cover my mortgage). Plus, the interest tax deduction is helpful. Then again, I am the poster with only 14k in the bank and 10k in 401(K) - so maybe I am not doing it right.


Im assuming you put something down on the house so its not like you only have 24k saved. Id count your equity as well.


I used pre-practicing $$/savings for the down pay (bought before I started at the firm). So while I count it for my net worth, I don't count it as saved from my first year salary.



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