The average time it takes to become a self-made millionaire is 32 years . By the time I retire in 2021 with a net worth of over 1 million dollars, I will have put in 16 years at my current job, half the time.
In my twenties, I had other jobs, of course, like house demolition labor, swim coach, college instructor and waitress. However, none paid more than $12,000 per year and every cent was spent on surviving. Essentially, there were no savings from this early era of my life. Luckily, there was no debt either.
In 2005 when I started my “career” as a geologist, complete with livable salary and benefits, I started saving.
I started pretty simple. I contributed up to my employer’s match in my 401k and to a Roth IRA. The rest ended up in a simple savings account or was spent.
In retrospect I could have done a lot better, but this solid foundation put me in a decent financial spot when I discovered FIRE and accelerated my savings.
Net worth in 2015 = $332,896
Net worth in October 2017 = $788,200
That is an increase of $455, 304!
This gain is due in part to an increase in property value and stock market gains, but it is mostly attributed to a high savings rate. Mine is nearly 70%!
We would never have attained such a high savings rate unless we had decreased our household spending.
Decreasing your expenses is the first line of defense!
I track my expenses religiously. I review each line item and try to figure out what can be reduced or negotiated for a lower rate.
The large line items like housing, food and transportation are seriously addressed; the largest cuts can happen here. But, we have also negotiated lower monthly rates for our phones, internet and car insurance, saving us hundreds of dollars per year. As of today, our daily spend rate is hovering around $113. Ultimately, I would like our daily spend rate to be between $95 to $100.
Each month I review other blogs expense reports. Sometimes I get great ideas from them on how to reduce expenses even further without it being too painful.
I found more blogs this month that publish their monthly expenses thanks to Rockstar Finance . Some combine their net worth and expense reports. I like to compare my spending to these reports and try to improve where I can. Here is the lowdown on September’s expenses (published in October).
Dividends Down Under (Savings Update)
Enough time to (New*)
Not Your Average Millennials (New*)
The FIREstarter (New*)
The Three Year Experiment (New*)