I also like keeping careful records of my finances! I had a few ideas that could help you get more accurate/less skewed numbers 1. Deduct taxes from your freelance/self employed income instead of realizing it as an expense. Since you probably won’t have huge tax bills like this in fire, it will give you a more accurate sense of what you actually spend 2. Realize your 401(k) contributions as both income and investments. That would prevent weird fluctuations in income that are primarily due to differences in 401(k) contributions (I.e. May). It also is helpful for zero based budgeting (income = expenses + savings + investments) Personal finance accounting is all very personal and at the end of the day it just depends on what works for you and gives you the best information to make decisions on!
Thank you, Julia!!! This is so helpful. I used to count 401k as income/investments but then I was thinking does that double it up and throw off my math for stuff? Definitely stuff to think on.
6 FIGURES IN SAVINGS & INVESTMENTS! That’s amazing. If you have a credit card that gives you greater than 2% back in value for your purchases, you may consider paying your estimated income tax and income tax with the credit card. The processing fee is 1.87% currently for paying with a card. It’s not the biggest amount back in value, but maybe a few hundred in a year.
I don’t think your savings rate calc is correct. If you’re going to include 401k contributions in your numerator then your denominator needs to include the contributions as well. I like to use gross income (before taxes/deductions) in my denominator but I know a lot of people like to use net income. When doing the latter, any pretax savings (like 401k or HSA) should be included in both the numerator and denominator
Would you ever consider doing a video on IUL Insurance? I’ve been hearing about it lately as a means of early retirement and wealth generation and would love to hear your thoughts!
I am adamantly against IULs. They are basically a scam. If you actually need life insurance in the case you have dependents who need monetary support if you pass, then term life insurance is could be a good option. IULs are complicated for a reason and incentive the salesperson more than you. If it’s too good to be true, it probably is. I personally just stick with total stock market index funds in a brokerage as my gains are easier to draw down from and I have an almost guaranteed return of 7% YoY over the next few years.
Haha it's as simple as investing in an index funds, which I have a tutorial on how I do that with Schwab: th-cam.com/video/O5MPiRENvCA/w-d-xo.html. Dividends then automatically get reinvested.
I also like keeping careful records of my finances! I had a few ideas that could help you get more accurate/less skewed numbers
1. Deduct taxes from your freelance/self employed income instead of realizing it as an expense. Since you probably won’t have huge tax bills like this in fire, it will give you a more accurate sense of what you actually spend
2. Realize your 401(k) contributions as both income and investments. That would prevent weird fluctuations in income that are primarily due to differences in 401(k) contributions (I.e. May). It also is helpful for zero based budgeting (income = expenses + savings + investments)
Personal finance accounting is all very personal and at the end of the day it just depends on what works for you and gives you the best information to make decisions on!
Thank you, Julia!!! This is so helpful. I used to count 401k as income/investments but then I was thinking does that double it up and throw off my math for stuff? Definitely stuff to think on.
Thank you for your insight on this!! I've decided to realize 401k contributions as income and investments as you suggested!
6 FIGURES IN SAVINGS & INVESTMENTS! That’s amazing. If you have a credit card that gives you greater than 2% back in value for your purchases, you may consider paying your estimated income tax and income tax with the credit card. The processing fee is 1.87% currently for paying with a card. It’s not the biggest amount back in value, but maybe a few hundred in a year.
Haha maximize every dollar! LOVE! I have the Citi 2x cash back so it definitely would be easy enough
Awesome update! Can't wait for you to hit 1 million which is really soon for you 😁
Thank you!! Fingers crossed we have a good market year and that compound interest works in our favor!
“I’ll owe a lot in taxes.”
Me: *Cries in 50% tax rate*
Thanks so much for sharing these numbers and your progress, best of luck on reaching your goal!
Very impressive! Thanks for sharing your progress.
Congrats on your progress, Catie! I also read Die With Zero recently and it had a big impact on me.
I really want to throw a baller 45th birthday party now like he did!!
I don’t think your savings rate calc is correct. If you’re going to include 401k contributions in your numerator then your denominator needs to include the contributions as well.
I like to use gross income (before taxes/deductions) in my denominator but I know a lot of people like to use net income. When doing the latter, any pretax savings (like 401k or HSA) should be included in both the numerator and denominator
Very true
What does your investment portfolio look like to get those kind of returns? great job tracking!
Would you ever consider doing a video on IUL Insurance? I’ve been hearing about it lately as a means of early retirement and wealth generation and would love to hear your thoughts!
I am adamantly against IULs. They are basically a scam. If you actually need life insurance in the case you have dependents who need monetary support if you pass, then term life insurance is could be a good option. IULs are complicated for a reason and incentive the salesperson more than you. If it’s too good to be true, it probably is. I personally just stick with total stock market index funds in a brokerage as my gains are easier to draw down from and I have an almost guaranteed return of 7% YoY over the next few years.
Thanks you for the insight. I really want to focus on my FI/RE goals after finishing grad school so I wanted to know if it was legit or not!
Would you be willing to do a video on how you make money on dividends?
Haha it's as simple as investing in an index funds, which I have a tutorial on how I do that with Schwab: th-cam.com/video/O5MPiRENvCA/w-d-xo.html. Dividends then automatically get reinvested.
Let me know if you need more clarity than that!
🤎 how you broke this down. Your infographics are always on point. Congrats on your progress so far!
Thank you! My creative career is paying off haha
My net worth only 2Lakhs inr only 😞
How do you live for free? Thats a major advantage that many do not have.
Very grateful that my parents let me live with them the past few years. They encouraged me to save!
Cool stuff. How old are you?
Which money tracker App you suggest is the best ? ❤
I use a combination of copilot app and my own money tracking spreadsheet! Both linked in the description :)
@@millennialmoneyhoney Hey, thanks Catie:)
Wait so you didn’t have to pay any rent? That’s really lucky
Very fortunate to have lived with my parents the last few years. Moving in with my boyfriend though soon so we will be splitting rent!
Lol