My 10 Year Plan

I love to travel. My favorite kind of trip is a road trip, where I pack the car up with some stuff and a friend and hit the wide open road for some fresh air and freedom. I've taken three road trips so far: one for a month along the US East Coast, one for a week long Spring Break trip to Myrtle Beach in college, and the most recent was a quick trip around the southern coast of Australia while on vacation there.

All of these trips, while incredibly different, all had one thing in common: a plan.

When I plan a trip, I don't just hop in my car and start driving somewhere. First, I need an end destination. What looks like an interesting place? Who could I visit there? Why do I want to go there? I went to Myrtle Beach for Spring Break to visit a friend from college (and made a slight detour to visit other friends and family in Nashville and Indiana along the way!).

I then need to know how to get there. Do it the old fashioned way with a map and a highlighter, or use Google Maps. While I'm looking for the best route, I do some research along the route to find any interesting spots to visit. That's how I ended up at the MLB Hall of Fame while driving from Ohio to Connecticut.

You also need to be flexible. For instance, when we saw a beautiful reservoir next to the road, we didn't hesitate to stop and soak up the prettiness.

so beautiful
so beautiful

Planning an early retirement is a similar process to a road trip. No, really, it is. Stop and think about the similarities for a second. ER needs an end destination (amount of mula you think you'll need, usually 25x your desired spending rate). You need to figure out how you're going to get to ER (how much per year do I save, what account is it in, what kind of investments do I want to own, etc). And then, you'll also need to think about what you're going to do on the way there. Am I going to rent? Buy a house? Become a landlord?  Get married and start a family? Job hop until retirement time or stay in the same place?

Strategy vs. Tactics

I once read a quote on the difference between strategy and tactics. Strategy is planning out things ahead of time, and tactics is what you're doing in the trenches with things aren't going to plan. I've got a strategy for the next 10 years, but I know I'll have to do some tactical thinking to adjust it (probably a lot of thinking, to be honest). Keep in mind, this is a very rough “back of the napkin” plan. This is my best GUESS as to what my next ten years are going to look like. I first put this down on paper just a few months ago, and it's already changed. And you know what? I'd be willing to bet my entire net worth that it will change again. That's perfectly fine! I used the limited data I have from the last 18 months to try to project what will happen in the future. I projected the first year and came pretty close, so I'm fairly confident in my skills, assuming nothing major happens like the Yellowstone Supervolcano exploding or WWIII breaking out between Yugoslavia and Belize.

A forest in W. Australia
A forest in W. Australia

My Plan

Goal: $587,500 (23,500 x 25)

Start: Age 23, Net worth $10,000

Year 1 (2014): Age 24
Net worth $45k
Partially maxed 401k
Maxed Roth IRA
rented
Comments: I made a mistake when calculating how much went into my 401k. I included the company match. So, while I ended up with almost $18k saved like I thought I would, I actually only saved $13k. I've adjusted now so this year will be the max plus the match. I did max out my Roth IRA, and also rented a house.
Year 2 (2015): Age 25
Maxed 401k
Maxed Roth IRA
rented
Comments: Last year I saved $35k, so I figured it was reasonable to assume I'd save more this year with a higher salary and less expenses. I signed a lease for the next 18 months, so I'll be renting until Dec 2016.
Year 3 (2016): Age 26
Net worth e$103k
Max 401k
Max Roth IRA
rent
Comments: My 401k will be fully vested! I'll also be finishing up with my entry level program, so I should be getting a nice raise. If I don't, I won't hesitate to find a new company that will pay me more (and hopefully gives me more vacation).
Year 4 (2017): Age 27
Net worth e$138k
Max 401k
Max Roth IRA
rent/buy
Comments: I have aspirations to work overseas for a couple of years while I'm still young and can do such a thing. If I go overseas, I'll continue to rent. If not, I'd love to buy a house (and am strongly considering buying a multi-family property).
Year 5 (2018): Age 28
Net worth e$179k
Max 401k
Max Roth IRA
put extra in taxable account
rent/buy
Comments: Assuming I stay with my current company, my pension will vest this year. I also anticipate making significantly more money, so I'll put the extra money in my taxable account. Not as good as the other accounts, but better than letting it sit in some savings account somewhere.
Year 6 (2019): Age 29
Net worth e$224
Max 401k
Max Roth IRA
put extra in taxable account
buy*
Comments: *I'd really like to be into my own house at this point after coming back to the US. I don't see much of a need for the flexibility of renting at this point. Also, keep in mind this assumes I'm still single. I think having a partner would be great, but I'm willing to wait for the right guy.
Year 7 (2020): Age 30
Net worth e$273k
Max 401k
Max Roth IRA
put extra in taxable account
buy*
Comments: It's really helpful to be born in a year that ends in ‘0'. Makes my age super easy to calculate.
Year 8 (2021): Age 31
Net worth e$327k
Max 401k
Max Roth IRA
put extra in taxable account
buy*
Comments: This year I'll hit $300k net worth! Just gotta keep on trucking at this point.
Year 9 (2022): Age 32
Net worth e$385k
Max 401k
Max Roth IRA
put extra in taxable account
buy*
Comments: Savings are really starting to take off here!
Year 10 (2023): Age 33
Net worth e$447k
Max 401k
Max Roth IRA
put extra in taxable account
buy*
Comments: Wow! Almost there! At this point, I imagine I'll be throwing everything I can at it to get to the magic number.
Year 11 (2024): Age 34
Net worth e$514k
Max 401k
Max Roth IRA
put extra in taxable account
buy*
Comments: I'm very narrowly there. However, I'll need to work part of the next year to be able to get the year end bonus, so I will work until August of 2025 and retire then by the age of 35!
Networth
As of May 2015

 

So there you have it. My plan to accumulate $587,500 by the time I'm 35.

What does your plan look like? 

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11 thoughts on “My 10 Year Plan

  1. Your plan looks great! I put together my plan a few years ago and constantly revise it. I also included major life event expenses such as getting my Masters degree and getting married. So far I have been able to avoid most of the Masters degree cost (through maxing out the work reimbursement and being OK with it taking multiple years) and avoiding wedding costs (by putting off the date/wanting a non-traditional wedding and my fiance saving big-time on the e-ring (which I will post about at some point!))
    Did you include your income increasing significantly in this projection? As a young woman also in IT (I think you’re in IT too?) I can say that it is a good market out there now for jobs. I recently went to the Grace Hopper Celebration and they were recruiting hardcore. I also have been successful with negotiating my salary a few times (I’m 26 and have quadrupled my salary since I was 22). You picked the right field!

  2. The plan looks really nice. As you said, the strategy is defined. I guess the next years now comes down to tactics to reach all the interim goals.
    Good luck with your journey and potential overseas work

    • You can do it! This is why I love the FI community! Everyone has something to offer that makes you stop, think, and go “hmm I should totally do that too!” Good luck!

  3. Hi I just stumble upon your blog and seem like you have a great detailed plan. I like your projection at least you have a target and goals that you have set your sight on. I like your year 2017 plan, I really think you should try oversea work. I can relate since I’m currently working oversea too. You do get a tax benefit for working oversea almost $100,000 tax free but their is certain rules that you have to follow to get that benefit. You can check out the foreign earn income exclusion on the IRS website. Good luck on your journey.

    • Hi Jay! Thanks for commenting. I would love to work and live overseas for a few years. Getting paid my US tech salary whilst paying overseas prices would be the best!

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