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David is a mere 26 years old. At that age, many who go into medicine have a net worth in the multiple six figures below zero.
However, David didn’t go into medicine. David went into finance, and as a result, David is doing quite dandy with a net worth of several hundred thousand dollars above zero.
At this stage in life, he can live quite frugally and be happy, but he envisions living more “normally” in the not-too-distant future, as he has his sights set on a 7-figure net worth before he celebrates his 30th birthday. He would also love to be done with corporate finance well before then.
If you’re interested in participating in one of three interview series, please download the most appropriate form for your life situation: FIRE Starter, FIRE Crossroads, or Post-FI Notes. To see other posts in the series, visit our Q&A archive.
Getting to Know You
Where are you on your financial independence journey? Have you crossed the halfway point in terms of net worth and/or passive income?
Before I answer any questions, I first have to say thank you to PoF for giving me this opportunity. When I was in college, I had no idea there were people on the internet who would give the correct financial advice all for free, let alone share numbers with the audience. So therefore, I want to give credit where credit is due first before answering any questions!
My goal is to be a millionaire by 30 years old. However, I know that I’m “financially independent” at the half a million dollar mark because my expenses are so low.
Using the millionaire goal, I am only 40% of the way there and not quite halfway there. In terms of financial independence, I am more than halfway there at 80%. I currently have a net worth of about $400,000.
Tell us about your household. How many people and at what ages? Are you supporting anyone outside of your home? Where do you live?
I’m not married and not supporting anyone outside of my house. I’m 26 years old right now and living in the Southern United States.
In what field are you working? How is your career going? What do you like best and least about your chosen profession?
I am working in finance and my career is going great. One thing that I like is that I work in the finance industry.
I remember walking in the library during college and when I saw books titled “financial analysis,” I would literally get goosebumps and not be able to focus for a couple of hours afterwards.
That’s when I knew that working in the finance industry was my destiny because of how much it affected me. I felt that it was what I was born to do.
Now, do I love my job? Absolutely not. Do I wish that I could be doing something else rather than working for someone else in finance? Absolutely. However, I generally like my job.
My friend and I were having an argument how it’s so important to get into a career that you are “passionate” about that you “love.” I countered that you should follow the money as a career.
My argument was that you will NEVER love a job helping someone else be richer. And I stand by that statement. Although I like the subject matter of my job, I still do not enjoy helping other people get even richer than they already are. I would never say that my job brings me passion.
[PoF: I more or less have a job helping others (i.e. readers) become richer, and I must say I truly do enjoy it!]
I like that my job deals with financial analysis, but I dislike the corporate America “hierarchical” model even more than the financial analysis. The moment when I learned that it’s legal for companies to fire employees for “insubordination” is the moment I disliked the corporate America model with a burning passion.
Am I willing to go through with the “yes sir, may I have another sir?” model in the short term to declare independence in the long term? Absolutely.
Do you feel you’ve come to a crossroads of sorts? If so, tell us about it. What options are you contemplating?
I estimate that I will reach the half-million-dollar net worth mark in the next year or so. However, I’ve been wanting to break free from the corporate finance model, much more so in 2021 than in any other year. I bugged my friends and I bugged a lot of personal finance blogs asking for advice and a lot of them gave me lots of good advice.
The options that I’m contemplating right now are to either call it quits and pursue my dreams of entrepreneurship right now on a BaristaFIRE / LeanFIRE path. Or to stick it out for one more year, amass half a million dollars, THEN pull the plug.
What complicates it even more is that a recruiter reached out for a job recently. They presented a job opportunity for me to almost triple my already six-figure salary, which I can’t EVER see myself turning down, ever.
Therefore, if I end up getting that job, I will be working for at least 2 more years, which leaves the “quit my job now and pursue entrepreneurship” road off the table.
Investing
How is your nest egg invested? Approximately what percentage is allocated to stocks, bonds, real estate, and alternatives?
My nest egg is approximately an invested $370,000 or so. 100% of invested assets are in equities and that figure doesn’t include an emergency fund of $12,500, money sitting around in an HSA of approximately $11,000 (I know, I know, PoF would SHAME me with his excellent post on how most HSA funds do not get invested but they should), $5,000 car valuation, and a couple thousand dollars in miscellaneous categories.
Are your investments primarily in tax-deferred, Roth, or “taxable” post-tax accounts?
Right now, the majority of my investments are in a tax-deferred account (401(k)). I have almost a quarter million dollars in my 401(k) alone!! I’m so excited about that. The rest are in taxable post brokerage accounts.
Do you have investments in an HSA? How about 529 Plans?
I do have investments in an HSA. The total combined account balance is a little over $20,000. Half of it is invested in equities and half are sitting in cash.
The reason why I haven’t invested all of the money is because 1) the HSA accounts’ UI is not very user friendly to where I understand if they charge a stock buying fee or how to buy the equity in the first place and 2) I had no idea HSA accounts rules when it comes to investing the money can differ and most importantly 3) I am very lazy to understand the different HSA accounts user interface.
Some HSA accounts do not let you invest unless you have a certain threshold already in cash. Although my laziness does help me in never selling my investments, they do not help in situations such as these in where I have to actually put in effort to buy an investment.
What has been your best investment?
The S&P 500, by far. I have tried day trading and individual stock buying but no other strategy made me as much money from just purely investing in the S&P 500 and letting it sit there.
I estimate I made close to $80,000 – $100,000 from just putting money in the S&P 500 so far that I wouldn’t have had otherwise. No skill and no hard thinking required.
Your worst investment?
My worst “investment” is a coin flip between losing $20,000 gambling or losing five figures attempting to day trade and/or do individual stock picks. I estimate I lost about $10,000 doing day trading / individual stock picks.
Into the FIRE
Numerically, what is your FI goal?
My FI goal is $500,000. However, I would like to have closer to $1,000,000 to feel safe.
When do you suspect you will achieve financial independence? Will you retire from your career once you’re comfortably FI?
I suspect I will achieve the $500,000 financial independence by end of 2022, so a little over a year. I believe that I will retire from my career once I’m comfortable FI, but not $500,000. $500,000 is the bare minimum to call myself financially independent but I would never call that comfortably FI, personally.
Once I am comfortably FI, I would like to say that I will retire from my career and do my own thing. Life’s too short to give away that much time for somebody else!
What are your post-FI plans? How will your life change? What do you look forward to the most?
Is it bad that I already have a plan in place for what to do after FI when I’m not even FI? Post FI, I want to start a company. I haven’t thought of what that exactly will be but I know I’m going to start a company once I’m comfortably FI. But not a company that needs 80+ hour work weeks. I would create a simple lifestyle company doing work that I enjoy. Ideally, I would only work 10 – 15 hours a week that makes me money.
Then the other free time would be spent doing ad hoc things like learning to cook, seriously getting into shape, watching TV shows, traveling to new parts of the world, and detoxing from the working world.
I see starting a company straight out of college as very risky because if you fail, your options are extremely limited. If you start a company after FI, no one cares, especially you. If you lose money, that’s fine, if you don’t, that’s fine too.
During FI, I look forward to spending time on my terms and not on someone else’s. Also, I can finally hang out with people I like and not hanging out with people I don’t like and playing office politics.
Have you made any major changes in your lifestyle or investments to accelerate your FI path?
Only in the first 3 years out of college. I lived in a very run-down apartment in which there were ant infestation problems, the toilets wouldn’t flush properly, and there were many more problems with the apartment. The good thing is, these problems didn’t show up in the last 6 months of me living in the property. I am now living in a much better apartment; it’s the biggest apartment I ever lived in.
Now, I didn’t do that to accelerate my FI path. I did it out of necessity. I lived on an income of $20,000 after maxing out a 401(k), HSA, and insurance contributions. There were only a few apartments that fit my budget! The side benefit is that it did accelerate my FI path.
I would definitely say my FI path is much more accelerated than my friends. I have friends who earn double what I make yet don’t come close to my net worth because they don’t like saving and investing their money.
Saving money is what I love to do! However, I do not like to live cheaply now. I prefer to live frugally. [PoF: Yes, there is a difference!] It’s only a matter of time before I start to live “normally”.
Are you facing any unique challenges making FI or RE more difficult?
A very unique challenge that I deal with is my burning desire to leave corporate America as soon as possible so that I can start living my life on my terms. I actually lashed out at my boss here and there because that burning desire turned into anger and we all know how our psychology can make one bad side of our life lash out at others. It’s a good thing I didn’t lash out enough to get me fired.
I know that I’m only a year away from getting to minimum FI but to me, a year feels like an eternity, especially when the finish line is so close and I can actually see the finish line. Maybe I need to exert some patience and not have this burning desire in me so much.
What advice do you have for others who are seeking financial independence?
Many of your “friends” will not understand what you want to achieve. Many of them will call you ”cheap” or actually harass you to spend money that you don’t want to spend. Maybe you will be cheap in the short term to live a comfortable life in the long term. However, you will meet people who will make fun of you for wanting to save money.
It’s important to not let them get to you. Don’t care about what they say, just follow the course. I actually had to cut a couple of these people out of my life and I’m very happy now as a result. There’s no one to guilt or shame me into spending money that I don’t want to spend for the time being. The friends that I do have now understand and support my FIRE goal.
There are people who don’t understand the power of compound interest and exactly how hurtful “it’s just $5” mentality actually is. $5 today is more like $150 in the future. Which is a lot of money, especially when you say “It’s just $5” 100+ times over a year.
Finally, is there anything under the sun that you’d like some help with? The hive mind would be happy to weigh in.
I would appreciate it if you could follow my journey through my Twitter account and my blog, Filled With Money! I highlight some principles of money saving, building wealth, mindset, and more throughout my financial independence journey.
Also, if anyone does have any suggestions on what to do with my crossroads dilemma, I would appreciate it. I’m at a point where I want to quit and take a vacation because I am LeanFIRE already. However, should I wait it out until I reach at least the $500,000 FI mark anyway?
The very minimum thing that I need to do right now is to see if I can get that job that will almost triple my income. However, if that falls through, then the question is still left.
PoF: Catch all the future interviews from those just getting started, at a crossroads, or at the end of their FI journey with a free subscription to Physician on FIRE.
I’ve shared my feedback privately with today’s guest. My primary message was that the FI goal can and will change if David partners up, marries, has kids, etc… Please give your take in the space below!
Again, if you’d like to partake in a future Q&A, please download a FIRE Starter, FIRE Crossroads, or Post-FI Notes interview form.
15 thoughts on “FIRE Crossroads 014: FI Goal of $1 Million by Age 30”
Congratulations on your progress so far, David! I enjoyed reading your interview and wish you the best of luck. Regarding quitting, can you take a sabbatical and then switch to the job offering 3 times more? Perhaps that would give you the recharge needed with a couple months off!
Your 36+ year old future selves are hoping you slow your roll on your ambitions to quit your current well paying job in your 20’s.
LeanFIRE may sound appealing when you’re 26 but you’ve barely started your adult life. Partner, kids, healthcare, housing, etc are all expensive. Maybe all your fun activities don’t cost much now but down the road, you might want to do things that cost more money. I’m not a fan of leanFIRE. It leaves you little wiggle room for things that will inevitably come up in life.
You’re investments of 370k is 100% in equities. A double digit correction/ bear market WILL happen sometime in the future. What happens if you retire and the market drops you down to 200k or lower.
If possible, I would try your business as a side hustle at first to see if it’ll have staying power.
Good luck.
I don’t doubt a double digit correction will happen. It is scary in that it can last not even just one year but 2+ years.
Good point, no need to go all in at once, nothing wrong with doing it as a side hustle!
Congratulations on what you’ve created for yourself so far, you are clearly disciplined and motivated. I would caution you that being in a hurry to escape your present situation into a better future may leave you still wanting when you get there. We often think that once we achieve certain goals or change our circumstances things will magically be so much better and that we’ll finally be able to live our happiest life. But it’s a fallacy. All of that is available to you now if you choose to think of your now differently. So my advice to you would be to figure out what you can do to love your present situation and job while still having the goal of leaving it one day. Pour yourself into it. Be the best employee you can be. Learn as much as you can. Basically learn to love it before you leave it. Then make the decision to leave from a place of abundance rather than wanting. Trust me, your future self will thank you for it. Not only because you’ll have more money in the bank, but because you’ll have learned to enjoy every present moment rather than wanting to escape the present to get to some other place. The now is all we have.
Oh, so, I wouldn’t be trying to escape my present situation and being retired to do nothing. I’ve been wanting to go the entrepreneurship route for so long it’s pretty much all that I can think about for the past year. I wouldn’t be running *away* from something, I would be running *to* something.
However, I know it’s not a prudent decision unless I’m at the very least, LeanFIRE’d so that’s the bare minimum I’m thinking of.
I would recommend reading past posts from the blog, The Power of Thrift by Thriftygal. It’s written by a lawyer who quit her high paying BigLaw job at about age 30 or so and Leanfired. She is very honest with her feelings and admits to some regrets on retiring early. Among her regrets is that she has tired of renting and would like to own a home. She now wishes she’d worked longer and wishes she had saved more money so that she could buy a house. But her Leanfire budget is too lean to afford the capital outlay of a home. And it is too many years since she left BigLaw to be able to return. Leanfire is not much fun, if your tastes change as you mature and you don’t have enough money to pay for these changing desires. As you get older, you may want more creature comforts which require more money. But it may be too late to return to your previous high paying job because the Corporate world has moved past you.
Totally agree with this comment, what your life is like when you’re in your 20s vs. 40’s or 50’s is very different. What seems like luxuries in your 20s , could prove to be basic needs if you were to have a family. Owning your home can also prove a hedge against rising rents. Also half a million would not be enough if you ran into a medical issue down the road and your high deductible plan only covers 80%. Right now I have an HDP, but plan to go to conventional plan in a couple years.
Oh, I wouldn’t be leaving the job to do nothing, I would be leaving the job to start a company (hopefully profitable).
So I would have half a million plus any hopeful profits I generate from the business.
I know the exact blog you’re talking about! I had no idea she said she regretted leaving BigLaw. I hadn’t checked her blog in a while so that could’ve been the culprit.
I’m going to re-visit her blog right now.
Dear David,
It is nearing time for you to bloom your life purpose in addition to the security and accomplishment you have begun with your leanFIRE.
Meet a girl you can love forever. Buy a house. Start a family. Give to your community. The South still embodies that tradition strongly.
Tell others you love that you love them. You’ll only get a few chances for this.
I see fun and fulfillment for you!
Happy New Year
Dan in Seattle
Fun and fulfillment, indeed!
Health insurance is expensive, as are marriages and children.
You are an expert in finance, perhaps, but hopefully you are sophisticated enough to understand you aren’t yet an expert in all aspects of life.
Consider a mentor or coach who can help you reframe your aversion to Corporate America, and try to develop some tolerance to its short comings. Physicians especially, have to regularly leap hurdles during their careers, but despite the complaints, I think it’s all part of the challenge that makes life interesting.
Bottom line: stop at 2 million if you must.
Agreed! I wouldn’t call myself an expert in all aspects of life, either.
That is true. I have been taking into other people’s thoughts into account that yes, working a 9-5 may not be the best thing in the world but it has the potential to provide stability and a good skillset with which to take with for the rest of my life.
$2 mil doesn’t sound like a bad goal.
You have done incredibly well with your portfolio. Keep in mind that there are many paths to take in life.
My experience in the working world tells me that how you treat and respect your boss is pretty much how you treat and respect customers. It’s hard to be a good leader if you can’t be a good follower.
You are young. You will change and mature over the next years (usually age 30). You might be surprised to learn that you are not the only one who has some good ideas.
As a minimum, I would hold fast and stay on the working road until such time at age 30-35.
I challenge you in 2022 to volunteer your time, at least once or twice a month, with a local charity, shelter or civic organization. Also, look at what you are financially giving to a charity. Look beyond yourself and your portfolio.
I challenge you in 2022 to take a relaxing vacation.
You might be missing some interesting people along the journey of life if you only focus on the bottom line.
That is very good advice, actually. I would love to give to charity and/or volunteer my time to help others. I volunteered at a couple of places in college and it felt really good to give my time to help others (food banks, Ronald McDonald’s house charities, etc.). I learned how to cook too at Ronald McDonald’s House Charities, which was an added plus.
Relaxing vacation sounds really good to me. I would love to make 2022 a more well rounded year.