Currently 24 with a net worth of 200k. I live in a HCOL city in the US. I have zero clue what I want to do with my life. Not sure on kids, not sure on where I want to live. Flexibility is important to me. I’d like to retire early, but I’m not sure when/how.
Current net worth breakdown (round numbers):
401k: 80k
Taxable brokerage: 105k
Cash: 15k
85% in large cap US equities; 15% in mid cap. I maintain a small trading sleeve (~$10k) for discretionary purchases and speculation.
Income and growth: Annual income is 300-350k (and household income w/ my long term partner is a bit over 400-450k). I work in finance and receive a large portion of my compensation at the end of the year. It’s much less variable than other positions in my field, but there’s always the chance that I get blown out and 0’d for the year. Over the course of my career, I would expect my annual income to cap out at about ~LSD $M unless I go back to school.
My rent is $4500/mo, I spend probably $1500/mo on all other recurring expenses. We live very simply and I don’t really get much out of luxury/spending money.
I’m planning on saving around $150k/yr. I hope to have around $600k NW by 26, via $300k of saved capital and some appreciation.
Questions:
– Big picture, what should my top financial planning priorities be? What decisions can I make today, to support long term flexibility/stability?
– Any advice on tax planning/avoidance? I do little today to mitigate my tax bill.
– Any other words of advice?
– What did it take for you to find purpose/direction in your life?
Check-in: 24M 200k NW
byu/Dangerous-Chair6804 infinancialindependence
Posted by Dangerous-Chair6804
2 Comments
damn you’re crushing it at 24, making me feel like i need to step up my game lol
for the flexibility thing – maybe look into backdoor roth conversions since you’re probably over the income limits, gives you more tax-free growth and withdrawal options down the road. also consider keeping more in taxable accounts vs retirement accounts if early retirement is the goal, you’ll want access to that money before 59.5
tax-wise you’re probably getting hammered at those income levels. definitely max out everything pre-tax you can, maybe look into mega backdoor roth if your 401k allows it. hsa if you have access too
the direction thing is tough man, i’m 28 and still figuring it out myself. having that financial cushion actually gives you room to experiment though – you could take a sabbatical, try different cities, whatever. most people don’t have that luxury so use it
For a second I thought you had $24mm