The Intersection of FIRE and Disney

[Starport Seven-Five]

I did a pretty good job with our goals this year. We spent a TON more money - which was ironically my Primary FIRE goal for the year. It's time to loosen the reigns and live a little! I had all of our numbers updated earlier this month (except for a final NW tally) so my wife and I held the SFF Annual Shareholders Meeting a few nights ago. It's a fun way to make my wife aware of all the financial results of the year. Despite our all-time high spending, this still comes in as our 4th highest savings year ever (in terms of absolute $$).

On the NW front, we saw that increase by $277,312.67 - that's an all-time high for us as well.

During 2021 we joined the 2 comma club (beating my goal of hitting that by age 40 by almost 3 full years). We also bought a new Honda Odyssey, bought a new house, and have a new baby due in a little over a week, and yesterday I put a deposit down on a new Honda Accord which we'll likely get in March or April.
The things I did in my early late 20s and early 30s are really paying off now!

Ha, I think we talked about it early in 2021 but our goals for the year were really similar and our results weren't far off either. We bought a new car, went to Hawaii and Disneyland (separate trips), spent ~5k in furniture, and are currently in ROFR on a DVC contract. Total NW up 264k.

 

[bernina]

Ha, I think we talked about it early in 2021 but our goals for the year were really similar and our results weren't far off either. We bought a new car, went to Hawaii and Disneyland (separate trips), spent ~5k in furniture, and are currently in ROFR on a DVC contract. Total NW up 264k.

This is an awesome accomplishment. Sometimes I think it takes nearly as much discipline to spend money (wisely) as to save it. Best of luck on that DVC contract. What resort?

 

[tzolkin]

I am wondering how you get around the highly compensated employee rule about contributing to your 401k?

I had never heard of this before. I'll do a bit of research on the topic. I think I'm actually the only non-highly compensated employee in my company (only 8 FT people).

 

[Starport Seven-Five]

This is an awesome accomplishment. Sometimes I think it takes nearly as much discipline to spend money (wisely) as to save it. Best of luck on that DVC contract. What resort?

I think at a certain point the discipline is just built in and it becomes hard to stray too far off course. We feel like we're going crazy by spending on a vacation but when you have a high savings rate, it takes more than that to knock you off track. I should also note that we budgeted for all of the stuff I mentioned in our 2021 annual budget so it still felt "under control."

We're in ROFR on a small SSR contract. We had it narrowed down to a few resorts and that is what popped up with close to the right number of points/use year. We were fine staying off site on Marriott points prior but with kids hopefully entering the picture soon we wanted to be able to stay on site without paying astronomical amounts of money. It's enough DVC points for a trip every other year which seems to be about how often we'd like to be committed to going.

 

[dclpluto]

Finished the year 3800 over a million in 401k. Will be 52 end of this month. Wish I could go back in time and up my deductions. I only maxed out my 401k one year in 06 or 07.
for years I thought 10 percent was enough. Than I was at 16 for a while. Last year I up it to 24. I should be at 1.5 million by now or more So many mistakes when I was younger not having enough going in.

just started putting into Roth 401k last year. Got half going into regular and the other half Roth.

 

[QueenIsabella]

I think at a certain point the discipline is just built in and it becomes hard to stray too far off course. We feel like we're going crazy by spending on a vacation but when you have a high savings rate, it takes more than that to knock you off track. I should also note that we budgeted for all of the stuff I mentioned in our 2021 annual budget so it still felt "under control."

The way I explained it to DH was this: If you have a net worth of X, and are still working, so long as you don't dip into your savings more than 4% of X, the numbers should still be heading in the right direction. So, if your net worth is $2M, 4%=$80k. Obviously, this is simplistic, but it helps us to justify in our minds our upcoming blow-out trip to Hawaii, which is a once-in-a-lifetime splurge. It's important to remember, too, that DH is still working--and he's an engineer, so he's got a decent salary. And we still invest in his 401k, up to the company match. so, "splurge spending" is over and above everyday expenses, which are covered by his salary. Unfortunately, he still hasn't run the numbers for 2021--slacker! But, I'm not worried.

 

[Samantha*belle]

Finished the year 3800 over a million in 401k. Will be 52 end of this month. Wish I could go back in time and up my deductions. I only maxed out my 401k one year in 06 or 07.
for years I thought 10 percent was enough. Than I was at 16 for a while. Last year I up it to 24. I should be at 1.5 million by now or more So many mistakes when I was younger not having enough going in.

just started putting into Roth 401k last year. Got half going into regular and the other half Roth.

You’re being too hard on yourself. You have so much saved and you’re in your early 50s! That is awesome! Have done any projections? Calculated your annual spend x25? To see if you’re in the neighborhood of where you would like to be?

 

[QueenIsabella]

Minor update: I finally, FINALLY! got DD18 to invest in her 401k. I had the sheet with the directions sitting on my desk, and she kept putting it off. It ended up taking her 2 minutes. So, she's doing 5% in a 401k, which is matched 100%, and then 5% in a Roth, which is not. She works part time for Starbucks. We're not talking huge amounts of money here, but she's on the path. I have to double-check on DS24--he works for FEDEX. If he puts in 5%, they'll match with 7% (but no pension). Given that both kids have decades of growth ahead of them, a small investment now will look pretty impressive when they retire. Neither kid is interested in finances at all (but, ask my about DS15! He tracks stocks on his phone.)

 

[dvcgirl67]

I think at a certain point the discipline is just built in and it becomes hard to stray too far off course. We feel like we're going crazy by spending on a vacation but when you have a high savings rate, it takes more than that to knock you off track. I should also note that we budgeted for all of the stuff I mentioned in our 2021 annual budget so it still felt "under control."

I totally agree. We built up a discipline over the years for savings/investing. As our income increased, our savings increased even more because our day to day lifestyle didn't change all of that much. But, I will say that we've become more willing to splurge on a higher end vacation experience here and there. But that never would have happened had we not hit all of our savings goals, and for us that's maxing out everything we can for all of our tax-advantaged accounts and hitting our taxable account goals. But even when we do go five star or fly in the front of the plane....we'll search for deals, better times to travel...etc. Taking one really higher end vacation every now and then...along with a more moderately priced vacations that we'd normally take... is something we've really come to value...and truly enjoy. Like you said, it never feels "out of control"....as long as goals are met and the splurge is budgeted for.

 

[AmyAnne]

I'm appreciating all of the pro-splurge messages here. I have an ingrained "no" response whenever I think of spending money, but "no" is not always the right answer (I actually had to learn that lesson with my kids, too, and train myself to not automatically focus on why they shouldn't do something but instead realize that there were often good reasons to let them do what they wanted to).

 

[dvcgirl67]

I did a pretty good job with our goals this year. We spent a TON more money - which was ironically my Primary FIRE goal for the year. It's time to loosen the reigns and live a little! I had all of our numbers updated earlier this month (except for a final NW tally) so my wife and I held the SFF Annual Shareholders Meeting a few nights ago. It's a fun way to make my wife aware of all the financial results of the year. Despite our all-time high spending, this still comes in as our 4th highest savings year ever (in terms of absolute $$).

On the NW front, we saw that increase by $277,312.67 - that's an all-time high for us as well.

During 2021 we joined the 2 comma club (beating my goal of hitting that by age 40 by almost 3 full years). We also bought a new Honda Odyssey, bought a new house, and have a new baby due in a little over a week, and yesterday I put a deposit down on a new Honda Accord which we'll likely get in March or April.
The things I did in my early late 20s and early 30s are really paying off now!

Just wanted to say that's an impressive NW and return for someone your age (I'm 17 years ahead of you)....but was almost exactly where you were at that age. There will be ups and downs in the markets, some big ones, but wait until you see what your 40s are going to do to that nest egg. Keep it up!

 

[Sleepy425]

I need to start off with an embarrassing question...
I have an Vanguard Roth IRA. It says I have $10.19 in a settlement fund. I don't know what I can do with this money. If I use it towards a target date fund, does that count towards my $6k max for the year? I took my Roth out of Fidelity because I was paying an advisor to basically do nothing. But now I see money sitting there in Vanguard and don't know what I can do with it.

Our invested net worth didn't end up where I was hoping at the end of the year ($14k short so I can't be too upset!), but things are looking good for our household. We are refinancing to an 8 year mortgage at 2.125% with 0 points and $899 closing fees so that by the time the kids are done with school we have no mortgage and have the option of retiring or cutting back significantly with working (currently have 10 years left on a 2.75% 15 year mortgage). I have read all the reasons NOT to pay off your mortgage early, but this works best for us (we have a set savings strategy - my husband isn't as frugal as I am, so if he sees money available he wants to spend it. Having a slightly larger mortgage payment just means he has less money he thinks he can spend). We have been doing great with putting my whole paycheck into savings (half into a brokerage, a quarter into laddered CDs for an enhanced emergency fund(considering changing this money to I bonds), and a quarter to a money market account to possibly use to buy a vacation home (also considering putting this money in I Bonds), maxing out his 401k, and maxing out both of our Roth IRAs with his paycheck.

And on another note...my 11 year old was a ref for the under 6 soccer league in town. He got paid $90 and was so excited to put half into opening a Roth IRA. So we matched his contribution and he is not officially saving for retirement!

 

[QueenIsabella]

Sleepy425--Good for you, and good for your son!

I can't answer your question on the Roth, but I will say--paying off a mortgage (or not) is a very personal thing. The usual argument is, if you have a low interest rate, keep the mortgage and invest the money to earn more than you owe in interest. BUT--there's a huge psychological part, too. Not having a mortgage can be huge for peace of mind, especially if you hate debt or have uneven income. We're in our 50's and have 23 years left on our mortgage. It'll be paid off when DH retires--could be the week before, I'm fine with that. We don't prepay--our choice. We're in the thick of kid-raising (2 in college, one in HS), probably the most expensive point in our lives.

Meanwhile, DH finally ran the numbers, and we're up, just under 10% for 2021. Not bad, given that we feel like we're bleeding cash (see child-raising, above).

I also decided what to do with DS24. I don't know how much I've mentioned it on this thread, but he has Asperger's, anxiety, and depression. He may never launch. He works full-time and goes to college part-time. He also has impulse-control issues relating to money--he recently blew a huge amount on X-box games--against my advice, he tied his debit card to his account. That's fixed now, and I'm a signatory to keep him from accessing the money his grandmother left him. He pays us $100/week in rent--we were thinking of putting it towards a car, or future rent/security deposit money, but I think I'm going to put it in a Roth for him. I kind of hate to return it to him directly if he can't keep from spending the money he has control over. I mean, aside from the rent, he has few bills (gas for the car and a weekly X-box gift card, the odd drink or snack at work, books for school).

 

[Sleepy425]

I also decided what to do with DS24. I don't know how much I've mentioned it on this thread, but he has Asperger's, anxiety, and depression. He may never launch. He works full-time and goes to college part-time. He also has impulse-control issues relating to money--he recently blew a huge amount on X-box games--against my advice, he tied his debit card to his account. That's fixed now, and I'm a signatory to keep him from accessing the money his grandmother left him. He pays us $100/week in rent--we were thinking of putting it towards a car, or future rent/security deposit money, but I think I'm going to put it in a Roth for him. I kind of hate to return it to him directly if he can't keep from spending the money he has control over. I mean, aside from the rent, he has few bills (gas for the car and a weekly X-box gift card, the odd drink or snack at work, books for school).

This is another reason we want to be done with our mortgage early. We adopted our daughters through foster care, and are at a point we do not know if they will be able to live independently. So finishing our mortgage early will put us in a position that we can help them more without working too much more if that is necessary.

 

[georgina]

I need to start off with an embarrassing question...
I have an Vanguard Roth IRA. It says I have $10.19 in a settlement fund. I don't know what I can do with this money. If I use it towards a target date fund, does that count towards my $6k max for the year? I took my Roth out of Fidelity because I was paying an advisor to basically do nothing. But now I see money sitting there in Vanguard and don't know what I can do with it.

We have found Vanguard is good at answering questions over the phone, not sure if their wait times are running longer than usual like everyone else though. No need to be embarrassed, give them a call. I would definitely check with them. IF the settlement fund is within the Roth brokerage account, it should be fine to move around within the account without counting as a new investment, but again, check with Vanguard.

It sounds like what happened to us recently when moving money, the transfer goes into a settlement fund first within the IRA, then into a mutual fund that we picked, and a small amount of earnings was left in the settlement fund because that money was in there for a week or so and earned dividends. It is all under the same IRA account. Make sure the other investments in the Roth are set to reinvest dividends and capital gains.

 

[QueenIsabella]

This is another reason we want to be done with our mortgage early. We adopted our daughters through foster care, and are at a point we do not know if they will be able to live independently. So finishing our mortgage early will put us in a position that we can help them more without working too much more if that is necessary.

Having a child (or two) with special needs definitely changes the calculus of how you handle investing and retirement. Our son can hold down a "real" job, which is helpful--Fedex provides benefits and is considered full-time, even though he works ~30 hours a week (it varies). Money from his grandmother could potentially buy him a condo or townhouse. But, he's probably always going to have to have a family member in the vicinity, or possibly with him in a mother-in-law type apartment situation.

 

[WVMomof3]

Late to the update party, we finished the year with investments up 24% and NW up 21%. We also had some big expenditures last year- tuition, furniture and a new car. Tuition for the last 6 years have been one of our biggest expenses. We will have 8 years of paying tuition with 4 of those paying double tuition. We have done all the wrong things, I am sure, and did not have 529s for them and have been paying as we go. But we are now done with Kid 1 and Kid 2!! Yay!!! and Kid 3 is halfway done. Our mortgage will also be done next year, so that will be helpful. Though our mortgage is pretty tiny so not that much of a difference compared to some. We have dropped our retirement savings down to the minimum to get match (5%) as we pay college so once that is done our savings rate will increase a lot. I think we are on track with our goals and am happy with our progress.

 

[aboveH20]

Last Tuesday, Jan 11, I decided to send in and cash a small amount of Disney stock paper certificates as part of the ongoing process of cleaning up our "estate" . (According to PO tracking they're still on their way, a week later.)

I've been watching the price of stock steadily decline in the past week .

Don't bother PMing me for investment advice

 

[Starport Seven-Five]

Ugh, we were so close.

 

[DIS_MERI]

I do not love when the market does this stuff, but as a silver lining, I hadn't done my 2021 IRA contribution yet because I wanted to see if it was worth doing a traditional contribution vs Roth. At least I can throw some money into this ugly market.

I'm currently saving 28.5% of my salary to TSP/HSA and another 4.4% goes to pension. I also get veteran's disability and I'm saving about 54% of that as well, this year (I took a CARES distribution while going through a divorce and I'll finish recontributing by the end of 2022, so I never paid taxes on any of the distribution). I'm planning to switch up a bit in 2023 and do 38% salary to TSP/HSA (comes just a little short of maxing out TSP, the government version of 401k; the 4.4% to pension is mandatory) and 30% of disability. At that point I am at FI and can live completely off my disability and my salary is for further savings and additional travel. I do 15% to charity, as well, and travel is already close to 10%. It is a lot easier to reach FI when you decide you don't need lots of "stuff"!

Edited because I forgot about advanced child tax credit : My effective income tax rate for 2021 is (said -16.8%, it's actually -25%) (said -4.4%, it's actually -12.5%) if social security and FICA are included. Gonna be sad when the kids are off tax credit territory.