Growing up, my focus was chasing the money. I wanted to earn as much as I can as quickly as possible. Hence, I was looking at careers in investment banking and management consulting after grad school. They pay well and have a clear career ladder (I’m going to miss this “ladder” when I hit FI).
The Early Years
In the first year or so in our careers, we knew we shouldn’t spend every dollar we make, or worse, more than we make! However, we never really thought about our savings rates, budgets, 401k, tax rate, etc. We bought and spent as needed but it was never overboard. I also knew the importance of investing and making my hard earned money work for me, but never knew how much I should have been investing and where. I bought some individual stocks here and there.
I remember my first stock purchase was in Bank of America during the 2008 financial crash. I was just about to finish undergrad and had a few thousand saved from working. Within a year or so it became a four bagger and it felt pretty amazing. However, I knew it was just the market rebounding. It wasn’t because I’m a stock picking genius. I looked into funds and invested in a few high fees mutuals funds. Rookie mistake!
Fast forward to two years ago (2015) after my wife and I got married, I started to really dial in our finances. This was fueled by us merging our finances together, being recent homeowners, and me starting to dread that consulting life. With a two income household and a desire for strong financial health, I wanted to figure out how to maximize our savings and plan for a comfortable future. I didn’t catch FIRE yet at this time, I just knew I didn’t want to do consulting forever and maybe be able to retire before 65.
Path to FI
Then one day Mr. Money Mustasche comes riding in my world and lights a FIRE in me. I came across an article on Yahoo or something and didn’t even realize retiring early is even possible without living on crackers and waters everyday. That’s when things started to change.
To start off, I sold off all those high fee mutual funds have bought a mix of Vanguard index funds. We have VTSAX, VGSLX, VBTLX in about a 80/20 (equity/bond) ratio. We have also been maxing out my 401k. Mrs. Quest, just started her 403b this year and is maxing that out. My work also offers HSA, so you guessed it–maxing that out too! I changed jobs twice so my previous employer’s 401k rolled into an IRA, otherwise, our income doesn’t qualify us for IRA/Roth IRA. With the remaining post tax dollars, we have automatically set at least $3k to be invested in our Vanguard account. We’re still trying to figure out how to optimizing our plan with a goal of me achieving FI in the next 4-5 yrs, but I know we’re in a much better financial mindset and situation than 2 years ago.