It’s always good to have an idea of where we are headed in this journey toward FI. Here are some thoughts I started with in November 2018 (I will update post as changes occur):

Personal financial philosophy & investment strategy (a work in process – started in 11/18)

Purpose :Set sites on a goal to be independent of regular salary by age 58 (youngest child entering undergrad university and house paid off) with savings of 25x living expenses of $40k annually

Investments : Retirement savings will be managed by me and held at Vanguard due to low fees and availability as part of employer-sponsored 403b. 95% will remain in VTSAX (Total Stock Market Index Fund), 5% will be in Bonds, until redistribution at age 57.
100% of my taxable savings will be managed by me in Vanguard Money Markets and EFTs (80% of this account), and individual stocks (no more than 4 and no more than 20% of this account)

Emergency fund of 6x my monthly living costs will be kept in liquid funds.

I will contribute $1k to each child’s 529 college savings plan annually on their birthdate until they reach age 17. This fund is managed by T. Rowe and is in an indexed, low-fee Total Stock Market fund.

When my children begin to work for income, prior to the age of 18, I will open a Roth-IRA in their name and match any $ they contribute. They will be required to put 30% of any income in this fund which will be invested in Vanguard’s Total Stock Market Fund. Any amount above 30% will also receive the ‘awesome mommy-match’.

Investment/ savings rate : I will invest the maximum ($18,500 in 2018) in my company’s 403b (T-IRA) in Vanguard funds annually until age 50, at which point this maximum  will increase to $24,500 annually.  As of November 2018 I have a 8% employer match in this fund.

I will invest the maximum ($5,500 in 2018) annually into a Vanguard Roth-IRA until age 50, which will increase to $6,500 annually thereafter.

After these investments are made, my goal is to save an additional 20% of my gross income in a taxable account meant to be used for FIRE and any emergencies which arise outside of my emergency fund.
Debt :I will pay off all credit cards monthly.

I will continue to pay an additional amount of principal on my home loans (mortgage and future HELOC if needed for home improvement/maintenance) to allow me to pay off these loans in 15 years from the date of purchase in 2015 (also the year the youngest child graduates from high school).

InsuranceI will hold term life insurance through youngest child’s 18th birthday. Children’s father also holds term life insurance at double the amount of my policy.
I will purchase short and long term disability through my employer.

I will not purchase long term disability as of now (2018) but will include medical costs as part of my retirement planning to offset such costs – I will re-examine this choice at age 50.

Keeping on track : I will do an ‘end of year’ analysis to determine if I am meeting my savings goals. I will calculate and document my net worth every six months.

Income not spent on monthly expenses will be transferred into a savings account to be used for taxable investing, family & personal travel, and ‘out of the ordinary’ experiences.

Each anniversary month of my employment hire date (November) I will re-evaluate this savings account to determine if I can put aside funds for a car purchase or other extraordinary expense.

Estate planning : Review documents annually (will, power of attorney for health/finances) and maintain current beneficiaries on retirement and insurance accounts.

I plan that the majority of my inheritance will be passed on to my children in the form of unused Roth-IRA funds.


Please post comments or your own plan below – join the discussion!

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