For those who haven’t read Background: Part I, click to read about my years prior to beginning a full time job.
For those who have, welcome back!
We left off right as I was about to start my very first full time job, back in July 2014. I joined as a Financial Analyst with a Fortune 500 company. With a higher salary and work I was interested in, I was excited to start!
I was accepted into a rotational program in a New England city close to where I went to college. Over the course of two years, I was able to travel around to different locations within the company and experience different types of Finance related roles. (I highly recommend this for anyone interested in living in different locations, while not knowing exactly what they want to do).
At this point, although I had no idea about Financial Independence or the idea of Early Retirement, I was doing a pretty good job following its principles! By saving most of my money to pay off student loans, driving an old car and living in a house with 5 other people I graduated with, expenses were low and I was off to a nice start!
I used the signing bonus I received from my job, as well as savings from the first few months of work to finish paying off the minimal student loans I had remaining. In addition, I needed to pay off a small loan I had taken from my parents to go on a trip out of country right after graduating with my classmates.
With these goals accomplished I went into auto savings mode using recommendations supplied by my parents. I put 10% of my salary into my 401K, and created a budget to follow in which I would put an additional $250/month into a savings account to build up my cash reserves. This is something I did, all the up until the summer of 2017.
Even though the city I lived in was considered HCOL (High Cost of Living), my budget was manageable, mostly due to the low amount I paid in rent by living in a tiny bedroom within an apartment with 5 other guys.
As we were all fresh out of college, none of us were making that much money, and thus spending was pretty low. Although I did not track expenses back then, I reckon I saved between 30-40% of my income these first 6 months of working.
Over the first 6 months of 2015, it was more of the same playbook as 2014. I set up the automatic annual contribution % increase to my 401K account, so my contributions went up to 11%. With an annual merit increase, I was making slightly more and able to save a bit more as well.
I loved living with and spending time with my friends from college, however, by the middle of the year I was looking to experience a new city. Luckily, this timed up perfectly with planning my next rotation within my company.
Although I had several locations to choose from, the allure of the west coast was too strong. After a year in New England (5 if you count college), in June 2015 (coincidentally the first month I could back track my Net Worth), I made the move out to Southern California.
As I was working within the same company, they paid for a majority of my moving expenses which was extremely beneficial. Admittedly, I was a total novice with how moving works and ended up spending way too much of my own money than I should have, had I done research. Due to the timing of my old apartment lease, I also had to pay rent on two places for a few weeks as well (Hence the slight drop in Net Worth around this time).
The lifestyle change of living within a one minute walk to the beach was better than I could have imagined. My weekends were filled with volleyball on the beach, bike rides, and hiking around the area. It was amazing!!
However, with the move, I relocated from one HCOL area, to another HCOL area. Living with only one other roommate now meant that my monthly rent increased. With my change in lifestyle and hobbies, I naturally offset some of the increased rent cost with lower costs elsewhere.
2015 was the first year I had tracked my expenses on my own. Not with the goal of calculating Net Worth or anything, merely to make sure I was staying within or close to my budget. Overall, looking back I finished with a 39% savings rate which I’m very proud of!
The first six months of 2016 were much like the end of 2015 living in California. I had the same hobbies, made amazing friends, and explored all over the west coast. I took trips to Phoenix, Denver, Dallas, San Francisco and Las Vegas among many local southern California spots while out there.
Even with all the amazing experiences on the west coast, there were a few drawbacks I couldn’t overcome. With all my family and high school/college friends on the east coast, it was tough to go an entire year with only seeing them a few times.
As my rotational program through work was coming to an end in the summer, I faced a tough decision: stay on the west coast – or move back closer to home.
After much deliberation, I chose to move back east and found a great position in the Washington DC area! As a huge fan of history, this was a city and area I have always wanted to live in.
Again, as I was moving within my company, I was able to get my moving expenses paid for. This time around, I was a little smarter and found ways to keep my moving costs inexpensive! I also found the perfect opportunity to do something I’ve always wanted to do: a cross country road trip.
With my dad as a driving companion, we hit 16 states in 7 days stopping at several national parks and cities along the way. I highly recommend this for anyone that wants to see more of the United States!
Arriving in DC, I quickly made friends through work and had a really fun time exploring the city and surrounding area. Living about a 6 hour drive from my parents’ house made it very convenient to see them more often, especially around the holidays.
Once again, I moved to another HCOL area (I sure know how to pick them) so I found that once again my rent costs increased. Lifestyle inflation is a real thing, and it certainly affected me the second half of the year.
2016 was an amazing year where my Net Worth nearly doubled ($31K to $58K)! Even with the higher expenses brought on in the second half of the year, my savings rate was nearly 41% due to an increase in salary that helped to offset.
This year was the first year in a long time in which I did not move! I really love living in DC and plan to stick here for the time being.
I plan to have a post in the next couple weeks giving a more detailed summary of 2017 so you’ll have to check it out!
With that said, 2017 was definitely the year where the wheels slightly fell off the wagon. Lifestyle inflation caught up to me, and my expenses soared. My Net Worth is projected to increase by slightly less than 2015, even with a yearlong robust stock market. In addition, my savings rate dropped dramatically from 41% to about 30%, even with an increase in salary.
I’ll explain it all in more detail in my 2017 summary post, however, this year hasn’t been all bad! The summer was when I discovered the FIRE community and my eyes were opened. Reading through FIRE blog legends such as Mr. Money Mustache, Budgets are Sexy, and the Mad Fientist, among dozens of others, many ideas came to me. Such thoughts included:
- Do I really need all these things I have?
- Am I getting enjoyment from the things I spend my money on?
- Do I want to work for someone else my entire life?
- What are my priorities?
- What can I do to change my lifestyle and finances, to follow along the path that so many others have set?
These were only a few of the thoughts that came to my mind, though the answers were very clear. I immediately began to implement some of the lifestyle changes, and I completely revamped and optimized my finances.
All of this culminated with me starting this blog at the end of the year, in order to share my experiences both positive and negative.
I still have much to learn, however, I hope this blog can help to hold me accountable to my goal of early Financial Independence. My aim is also to help people to learn from my mistakes and experiences so they can realize Financial Independence and early retirement as well!
Welcome along for the ride and please feel free to provide any feedback, advice or comments. I’d love to hear it!