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Fiery Millennials

Financial Independence from a millennial's point of view.

200k at 27

By 60 Comments

I DID IT!

My net worth shot past $200k like busy New York­ers hus­tling to work.

You might remem­ber my post about hit­ting $100k. If not, take a quick sec­ond, pop over there, and refresh your memory.

So…. how did I do it? I don’t make 6 fig­ures, I didn’t get an inher­i­tance, and I’m a SINK household.

My first $100k, as I estab­lished in the post, was pret­ty much 100% sav­ings. Ok fine, it was 86% savings.

This sec­ond $100k looks com­plete­ly dif­fer­ent than the first $100k. Yes, I still saved but there were oth­er forces in play help­ing me along. It’s the finan­cial equiv­a­lent of the car in Cal­i­for­nia being picked up and car­ried along by a wash of mud­dy water.

My allo­ca­tions at $200k are as follows:

  • 401(k): $126k
  • Real Estate: $85k
  • Roth: $28k
  • Cash: $15k
  • HSA: $9.7k
  • Pen­sion: $9,6k
  • Tax­able: $6k
  • Car: $4k

It’s def­i­nite­ly inter­est­ing to look back at the chart in my $100k post to see how my allo­ca­tions have changed. At $100k, I basi­cal­ly had a few invest­ment accounts and some cash. Now, I have those same retire­ment accounts, but I also have a pen­sion and real estate invest­ments. In fact, adding real estate to my port­fo­lio super charged my growth! There was no real estate in my port­fo­lio 18 months ago and now it’s 30% of my hold­ings! I’m very excit­ed to see where real estate takes me in the next 18 months!

Save, Save, Save

Sav­ing lots of mon­ey con­tributed to most of my net worth growth. I would­n’t be where I’m at today if I had­n’t furi­ous­ly shov­eled mon­ey into as many accounts as was legal. Invest­ment gains and real estate are awe­some, but you can’t get those prizes until you unlock the sav­ings lev­els. I saved over $30k in that 18 months!

Invest Like a Snazzy Alligator Detective

The sec­ond biggest cat­e­go­ry was invest­ment gains. Yes, the mar­ket is on a tear and going bananas. Yes, I know 20% gains in one year are not the norm and I can’t count on them every year. It’s like one of those informer­cials on TV. “Look at my gains! You can do it too!*

*(Results not typical)

But there’s some­thing real­ly, real­ly cool at look­ing at your accounts and see­ing the mar­ket put in a whole extra years’ worth of con­tri­bu­tions into my 401(k) in 2017. That’s right, the gains on my 401(k) were $18,500! That is “free” mon­ey! I say free, because I know it’s growth and can go away if the mar­ket enters a down­turn, which is inci­den­tal­ly some­thing I do think will hap­pen here soon. I’m not going to go out and buy cryp­tocur­ren­cies or pre­cious met­als like some peo­ple I know, but I want to acknowl­edge I know that mon­ey isn’t mine unless I lock in those gains.

Increase Your Income

My income went from $65k to a shade over $100k in 4 years. A good chunk of that came from rais­es, pro­mo­tions and bonus­es at my W2 job. How­ev­er, over the last year or so I’ve start­ed to diver­si­fy my income streams and make more out­side of work. I start­ed a few side hus­tles and bought a rental prop­er­ty. It is a LOT eas­i­er to put mon­ey away when you don’t need it every pen­ny for liv­ing expenses.
When I start­ed out at $65k, I felt the pinch of max­ing out just my 401(k). I had a hard time imag­in­ing how I would be able to max out my 401(k), Roth IRA and HSA in one year. Now, here I am 3 years lat­er doing just that. Which leads me to my next point.

Avoiding Lifestyle inflation

Inflat­ing your lifestyle is stu­pid easy. It’s eas­i­er to throw mon­ey at things to make prob­lems or stress­es go away. New car? You deserve it after all that hard work. Lunch out every day at work? It’s net­work­ing with your cowork­ers. Din­ners out all the time? Of course, who wants to cook after a long day at work?? New clothes all the time? Got­ta look good. Vaca­tions to Caribbean resorts? You betcha!

What’s dif­fi­cult is keep­ing that infla­tion at bay. It requires more effort for just about every­thing. Cook­ing at home, tak­ing your lunch­es to work, maybe rid­ing your bike to work, keep­ing your old car, resist­ing the urge to go shop­ping for new stuff…. It’s hard. I let my lifestyle inflate a bit when I moved for my sec­ond job. I didn’t real­ly need that nice apart­ment so close to work. Thank­ful­ly, I learned my les­son and kept that par­tic­u­lar drag­on at bay when I moved 18 months after that. If I had upgrad­ed every­thing in life, I wouldn’t have been able to save so much!

You can’t save mon­ey you’ve already spent.

Every­one says the first $100k is the hard­est… look­ing at the time­line, I would have to agree!

Here is a break­down of my time­line to $200k:

  • 4 months to save $15k
  • 10 months to go from $25k to $50k
  • 9 months to get to $75k
  • 8 months to get to $100k
  • 6 months to get to $125k
  • 4 months to get to $150k
  • 4 months to get to $175k
  • 4 months to get to $200k

Just a few com­ments here.

One, wow, the pow­er of lever­age. For $5k, I put some mon­ey down on a house and imme­di­ate­ly start­ed get­ting an extra $1,200 a month! I’m not sure what oth­er kind of invest­ment I could make that would give me that kind of return. Legal invest­ments, anyways!

Two, things kind of plateaued there from $150–200k due to the rental prop­er­ty and the fix­ings I was doing on it. I unde­ni­ably spent more mon­ey than nec­es­sary, but hey, I learned lots of lessons. No ragrets. Not even one let­ter. I hope to turn those lessons into bet­ter expe­ri­ences with real estate going forward!

Final Thoughts

I did­n’t do any­thing rev­o­lu­tion­ary to get this $200k. I did­n’t buy in on the bot­tom floor of a cryp­tocur­ren­cy. I did­n’t get a crazy big inher­i­tance. I don’t earn 6 fig­ures. All I did was live well below my means, save a bunch, invest it, and try to increase my income as much as pos­si­ble. You can do it too!

What are some of your goals? Do you asso­ciate cer­tain ages with mile­stones? Let me know in the comments!

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Comments

  1. Boom, you go girl! Great achieve­ment. At 27 I was two years out of Uni­ver­si­ty. Def­i­nite­ly did­n’t have $200k to my name at that time.

    Reply

  2. They also say that the first mil­lion is the hard­est. I think there’s a fac­tor-of-ten rule here. The first $10k is as hard as the first $100k and the first $10m is as hard as the first $1m. I imag­ine there’s a fel­low in Red­mond, WA who can tell you that get­ting to $10b is as hard as get­ting to $1b.

    Reply

    • Hey Steve, I would def­i­nite­ly agree with that state­ment. Iner­tia of com­pound inter­est is an amaz­ing force to have on your side! Thanks for the comment.

      Reply

  3. That is quite the mile­stone, con­grats! It’s crazy to see how the pace picked up after the first 100k. I hope things line up for me in the next 2 years and I can reach that num­ber at 27 as well (haha)!

    Reply

    • Thanks Teacher on FIRE! I think the mar­ket going bananas has a lot to do with it as well lol. Good luck on hit­ting your milestones!

      Reply

  5. Con­grats! Great inspi­ra­tion right there to stick with the basics: “All I did was live well below my means, save a bunch, invest it, and try to increase my income as much as pos­si­ble.” Love it!

    Reply

  6. That is tru­ly amaz­ing Gwen — con­grats on knock­ing that one out of the park!

    Unfor­tu­nate­ly, it’s mak­ing an old guy like me feel like a fail­ure when I was your age! 😉 At 27, I think I was just final­ly out of debt and on the pos­i­tive side.

    You’re real­ly killing it! Keep it up!

    – Jim

    Reply

    • Yeah but think of where you’re at now! You’re doing pret­ty great even if you weren’t where I’m at. Keep up the great work!

      Reply

  7. This is EXTREMELY impres­sive! Heck, at 27, I was rack­ing up bar bills as if it was the end of the world!

    I am will­ing to bet you are ahead of 99% of your peers, for two reasons:

    1. Your quote, “You can’t save mon­ey you’ve already spent)

    2. You under­stand lever­age. “…the pow­er of lever­age. For $5k, I put some mon­ey down on a house and imme­di­ate­ly start­ed get­ting an extra $1,200 a month!”

    Bra­vo on your achievements!

    Reply

  9. Get it Gwen! Psy­ched to see your progress. Just won­der­ing, would you count equi­ty in a sin­gle unit pri­ma­ry res­i­dence towards your net worth?

    Reply

  13. So awe­some, Gwen! I’m super excit­ed for you to see how it keeps pick­ing up the pace. Pret­ty soon that NW is going to be an unstop­pable snow­ball rolling down the hill and ready to crush every­thing in its path!

    Reply

  14. Well done Gwen! I list­ed to your Choose­FI episode and was impressed with your per­sis­tence and matu­ri­ty. This is the pay­off. As you said, noth­ing spe­cial. Just fol­low­ing the pil­lars of FI. Way to go.

    Reply

    • Thanks Erik 🙂 I have a feel­ing that one will take me a lit­tle longer with me quit­ting my W2.… but then again you nev­er know, an idea could take off and earn ton$ of ca$h monie$

      Reply

  17. Rock on. We’re clip­ping along at sim­i­lar paces. Look for­ward to the day when we both hit the dou­ble-com­ma-club and can buy an awe­some din­ner out to cel­e­brate. Keep on, keep­ing on. 🙂

    Reply

    • 1990 Babies unite! Frankly, I think it was the best pos­si­ble year to be born, but I might be biased. Keep work­ing and you’ll get to $200k too!

      Reply

  21. Con­grats on the mile­stone! What an awe­some achieve­ment. Though you down­play it, your hard work and ded­i­ca­tion has paid off! This has to feel like a nice cush­ion to grow on espe­cial­ly as you move onto the new chap­ter in your life.

    I’m approach­ing my first $100K (hope­ful­ly in the next few months), and here’s to hop­ing my even­tu­al $200K will be a lot eas­i­er (and faster) than this first $100K has been!

    Reply

  22. Con­grats Gwen! That is a real accom­plish­ment. I would also wager to say that you are well beyond that num­ber if you count your social secu­ri­ty tax­es as con­tribut­ing to an annu­ity that starts pay­ing out at 67. There are cal­cu­la­tors that will give you present val­ue infor­ma­tion out there some­where. Every $100k will go faster from here. $1 mil­lion, here you come!

    Reply

  26. Amaz­ing! When I was your age I was spend­ing more on beer than you’re putting away in your Invest­ments every month. There’s some­thing to be said about hav­ing your act togeth­er at such a young age, kudos!

    Reply

  27. Hi Gwen,
    First of all con­grats! I’m 28 come from a sim­i­lar back­ground and just start­ing on my road to FI and you inspire me.
    I would like to get into real estate invest­ing but what is your advice for peo­ple who live in über expen­sive cities such as Boston and New York? I was get­ting out­bid by over $20k – $70k over ask­ing price this summer..so maybe RE invest­ing in these cities is not worth it since homes are super expen­sive. I would love to get your thoughts on this. I also dont want to relo­cate so maybe rent­ing makes sense for mil­lenials in my sit­u­a­tion until maybe anoth­er RE crash.

    Reply

  28. Con­grat­u­la­tions on your net worth and that impres­sive salary tra­jec­to­ry! And truer words were ever spoken:
    “It is a LOT eas­i­er to put mon­ey away when you don’t need it every pen­ny for
    liv­ing expenses.”

    Reply

  29. Will you keep your rental and man­age it from a dis­tance now that you’re mov­ing away or will you liq­ui­date and buy some­thing else? What lessons did you learn from your first mul­ti-unit rental property?

    Reply

    • I’ll be keep­ing the rental and man­ag­ing from afar, at least until it stops mak­ing sense. I learned the num­bers are the most impor­tant part. If you have good cash flow, you can sur­vive any­thing (like wast­ing mon­ey on a bad contractor). 

      Reply

  32. Wow!! Good for you! I’m 28 and have zero debt. I don’t have a ton of mon­ey in the bank. How­ev­er my house is worth over $400,000 and my mort­gage is under $180,000 now. I think I am doing okay 

    Reply

  33. Won­der Woman!
    Won­der Woman!
    Now the world is ready for you
    and the won­ders you can do
    Make a hawk a dove
    stop a war with love
    Make a liar tell the truth

    And build a $200K port­fo­lio all by your­self before you hit 30!

    Reply

  34. Hi Gwen, final­ly it is great to meet a like-mind­ed indi­vid­ual who is on the path to finan­cial secu­ri­ty. My assets are a lit­tle over $330,000 most­ly because my home is locat­ed in an up an com­ing neigh­boor­hood. Cur­rent­ly, I have $50,000 in liq­uid invest­ments and try­ing to increase them to at least $150,000 but rather have at least $300,000 to be safe.

    Reply

  35. that is an impres­sive­ly quick sav­ings! I don’t quite under­stand how you have 85K in equi­ty in real estate with 5k down so quick. Have you been mak­ing big prin­ci­ple pay­ments? I have often won­dered if that would be a good thing to get into, I’m just not the land­lord type. But I do have a friend or two that have made it work.

    Reply

    • I don’t have $85k in equi­ty. Per­haps I word­ed that poor­ly. The house is worth $85k and I have about $10k in equity.

      Reply

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