M is for Money

We’ve committed ourselves to our goal of early retirement and laid out the milestones we need to reach to make that a reality. So where do we stand and how far do we have to go to realize our dream?

Each milestone has a dollar amount attached, either money we need to have in savings or debt that must be paid off. I’ve taken our current assets and assigned each to one of those milestones, for example our Sharebuilder account goes towards the taxable investing goal. Knowing that we have started, at least in a small way, towards each goal makes me feel that this dream is achievable. We may have a long way to go, but at least we have started down that road. So how many miles are there left to go?

Retirement Savings

Goal - $1,000,000
Current - $37,835
Percent Complete – 3.8%

This is one of those moments where you kick yourself for not starting your retirement saving earlier (20-somethings are you listening). I didn’t start saving for retirement until I hit 30. Actually, I did have a 401k before then, but I cashed it out. Now we’re playing catch up and the clock is ticking. My plan is to stick with my current employer as long as possible, employees are given a large portion of company stock and the program is setup as a retirement plan. That money, roughly $25,000 per year, plus maxing out my 401k and adding a ROTH have the potential to get us to one million by age 50.


2 Houses Paid Off

House 1 - $340,000
Mortgage Balance - $322,250
Percent Complete – 5.2%

House 2 - $120,000 downpayment
Current Savings - $10,715
Percent Complete – 8.9%

Paying off two houses by age 50 is going to be tough, really tough. I’ve separated our savings into two camps, one for a downpayment and the other as regular savings. I used $5000 of the downpayment money to pay off the credit card last month, now I’m trying to replace that money before the end of the year. To reach this goal we must accelerate our mortgage(s), either by refinancing to a shorter term or paying extra principal each month. Unfortunately our budget doesn’t allow for that just yet, instead I am focusing on saving up that downpayment.

Taxable Investing

Goal - $500,000
Current - $21,500
Percent Complete – 4.3%

The milestones I laid out were a first crack at determining our needs and what it would take to meet them. I’ve already increased our taxable investing goal by $100,000 to provide a little more income and I may have to increase it again, depending on the state of the world. Our budget going forward is designed to meet this goal, I’ve already increased our automatic investments with T Rowe Price starting next month!

Cash Savings

Goal - $100,000
Current – $3,745
Percent Complete – 3.7%

This goal is relatively easy to meet, compared to some of the other ones. In reality we have more savings than this, but I’ve decided a portion should be dedicated to a downpayment instead. We hope to never touch these savings, except in case of emergency. Like our taxable investing, I’ve been able to adjust our budget to meet this goal.

Retirement Boat

Goal - $300,000
Current - $1,245
Percent Complete – 0.4%

I think this goal makes me the happiest, even though it’s the furthest behind. Simply having some savings devoted to the boat is enough for me. I’ve decided our bonds and Lending Club investments will be used to buy a boat, it’s a strange mixture of the completely safe (bonds) and the extremely risky (P2P lending).

Net Worth

These goals will put us somewhere around $2.7 million net worth at retirement. That is probably low by some people’s standards, but still a huge amount of money to save. Considering our current net worth is on the order of $70,000, we have a really long way to go on this journey.


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