Since turning 20 in 2018, I've been aggressively investing and saving my income while living at home with my parents. Joining the Bogleheads community in 2020 further fueled my portfolio's growth, ultimately helping me reach a net worth of $100,000 as a single male teacher earning less than $50,000 annually.
Life circumstances play a big role. I've been fortunate to have my parents' support, allowing me to stay at home after college graduation. The current housing market's challenges, coupled with my income as a second-year teacher, prompted me to re-evaluate my situation and find creative ways to achieve my financial goals.
I'm excited to share that I've reached a net worth of $100,000 by the age of 25. I'm also very eager to share my investment journey, both successes and mistakes, since 2018. Hopefully, this will provide valuable insights for young individuals looking to enter the world of investing. Thank you to everyone who takes the time to read this.
FINANCIAL BREAKDOWN
Income: $41,600 (Second year teaching. Will be $44,000 beginning in August)
Side Hustle: Writing Articles Roughly $3,500 a Year
Coaching Supplemental: Roughly $5,500 after taxes (Rounded)
Total Income a Year: Roughly $50k
Emergency Funds: $12,000 + (HYSAs)
Debt: None
*I paid off $21,000 in student loans in an extremely short period of time. This was due to my coaching supplemental contract and taking a small portion out of my taxable brokerage account.
Tax Filing Status: Single
State of Residence: Ohio
Age: 25
Desired Asset Allocation: 100% Stocks/ 0% Bonds
Portfolio Size: $92,000 (Rounded)
Investments
Taxable: $13k (Rounded)
Fund: Schwab S&P 500 Index Fund - SWPPX - 0.03% Expense Ratio
Roth IRA: $56,000 (Rounded)
Fund: Schwab S&P 500 Index Fund - SWPPX - 0.03% Expense Ratio
State Teachers Retirement System of Ohio (STRS): $22,000 (Rounded)
Funds:
- STRS Large-Cap Core Choice - 75% Allocation (Expense Ratio is 0.30%)
- STRS Russell Midcap Index Choice - 20% Allocation (Expense Ratio is 0.07%)
- STRS MSCI World ex USA Index Choice - 10% Allocation (Expense Ratio is 0.10%)
14% is taken out of each paycheck automatically.
Company match? Yes. 11.09%. It is VESTED.
Note: I chose the Defined Contribution Plan. In 5 years I can change it back to the original plan but I will ask that question when it comes closer to that time. I think this Defined plan is good because I don't plan on teaching until the average retirement age. I plan on retiring earlier than the normal age or even switching my career within the next 15-20 years.
DEFINED CONTRIBUTION PLAN IS DEFINED AS:
- Investments selected by you
- Great Portability
- Greatest Investment Risk
IMPORANT NOTE: I have a 457b account. It has roughly $1,200 in it and I put $50 a paycheck in it. The fund is a large cap and it has a 0.03% expense ratio. In the coming years I plan on increasing this as someone in a previous thread mentioned how the Ohio457 is fantastic, especially if I want to retire earlier or move jobs.
What has went right on my journey so far:
- Great parents and staying at home has provided me with the ability to achieve my goals and to be where I am today.
- One of my family members inspired me to begin investing by showing me their portfolio when I was 16-years-old. This was something that went right as I have always been a fan of money throughout my childhood. If I was never shown this portfolio and taught that this could one day be me if I was smart with my money and invested it, I don't know where I would be right now.
- I learned about what a Roth IRA was during my senior year in high school. My English teacher taught the class about personal finance and I was absolutely hooked. (This was before many schools took on financial classes to teach students the basics and I am grateful he taught us about it). The YouTube videos he showed in class made me head home and want to learn more, which eventually led me down a path where I watched multiple finance videos a day.
- Coaching at some of the local schools near me has provided me with an opportunity to not only gain some extra income, but also gave me some food to take home to save on food costs. A lot of the schools where I have coached provide the student-athletes with food to take home after practice. The coaches were given the same opportunity and that has saved me a TON of money over the years.
- I had to fire a family friend who worked at Ameriprise Financial and move my investments to Schwab. It was extremely scary at first that I was about to manage my own investments, but after learning through reading and watching countless videos, this was something that went right.
- Paying off student loans early! Woohoo! This is something that I was stuck on for a long time and many Bogleheads commented on older posts just telling me to pay them off and how much better I will feel. I took my coaching supplemental along with a little bit of my taxable brokerage money and paid it off this year.
What has went wrong:
- When I first asked about how to begin investing, a family member told me about an individual they knew who can get me started. The individual was affiliated with Ameriprise Financial. At the time, I just took money from my paycheck working at a restaurant and put it into a Roth IRA account. This was something that went wrong in my early years as I lost valuable growth due to poor funds and expense ratios.
- Before I met the Bogleheads and the entire concept of low fees and index fund investing, I was essentially gambling in another market that was unregulated and still is (you know which one I am talking about). I eventually got out after losing a good deal of my money and never recovered from it. This was a massive mistake and something that ultimately made me a smarter investor since I lost roughly $20,000 at the time.
$20,000 of my hard earned money that was just wiped away... it really hurts a person when you know that it is not coming back. This is around the moment where I found Bogleheads and my life changed for the better.
- Buying individual stocks early on that never panned out. This was a mistake of mine and I am glad I found out about index funds.
Goals Coming Up:
- Save up for a down payment on a future home
- Earn masters degree
- Start a family
Questions:
1. How do some of you balance your ability to spend and save/invest? I know for me I am so stuck in a save/ investing mindset that it is always hard for me to buy things without always contemplating about it.
2. For those who started investing young, what are some of the biggest challenges you faced and how did you overcome them?
3. I put $50 a paycheck into a 457b account through Ohio457.org. After I max out my Roth IRA each year, which I have already done, should I increase the $50 a paycheck into that 457 account as it has more benefits than a taxable brokerage?
Thank you! I appreciate you all reading and giving me a chance to tell my story. While I am fortunate enough to be in the position I am in, living below my means and being extremely diligent has provided me a jump start within my investment journey.
Life circumstances play a big role. I've been fortunate to have my parents' support, allowing me to stay at home after college graduation. The current housing market's challenges, coupled with my income as a second-year teacher, prompted me to re-evaluate my situation and find creative ways to achieve my financial goals.
I'm excited to share that I've reached a net worth of $100,000 by the age of 25. I'm also very eager to share my investment journey, both successes and mistakes, since 2018. Hopefully, this will provide valuable insights for young individuals looking to enter the world of investing. Thank you to everyone who takes the time to read this.
FINANCIAL BREAKDOWN
Income: $41,600 (Second year teaching. Will be $44,000 beginning in August)
Side Hustle: Writing Articles Roughly $3,500 a Year
Coaching Supplemental: Roughly $5,500 after taxes (Rounded)
Total Income a Year: Roughly $50k
Emergency Funds: $12,000 + (HYSAs)
Debt: None
*I paid off $21,000 in student loans in an extremely short period of time. This was due to my coaching supplemental contract and taking a small portion out of my taxable brokerage account.
Tax Filing Status: Single
State of Residence: Ohio
Age: 25
Desired Asset Allocation: 100% Stocks/ 0% Bonds
Portfolio Size: $92,000 (Rounded)
Investments
Taxable: $13k (Rounded)
Fund: Schwab S&P 500 Index Fund - SWPPX - 0.03% Expense Ratio
Roth IRA: $56,000 (Rounded)
Fund: Schwab S&P 500 Index Fund - SWPPX - 0.03% Expense Ratio
State Teachers Retirement System of Ohio (STRS): $22,000 (Rounded)
Funds:
- STRS Large-Cap Core Choice - 75% Allocation (Expense Ratio is 0.30%)
- STRS Russell Midcap Index Choice - 20% Allocation (Expense Ratio is 0.07%)
- STRS MSCI World ex USA Index Choice - 10% Allocation (Expense Ratio is 0.10%)
14% is taken out of each paycheck automatically.
Company match? Yes. 11.09%. It is VESTED.
Note: I chose the Defined Contribution Plan. In 5 years I can change it back to the original plan but I will ask that question when it comes closer to that time. I think this Defined plan is good because I don't plan on teaching until the average retirement age. I plan on retiring earlier than the normal age or even switching my career within the next 15-20 years.
DEFINED CONTRIBUTION PLAN IS DEFINED AS:
- Investments selected by you
- Great Portability
- Greatest Investment Risk
IMPORANT NOTE: I have a 457b account. It has roughly $1,200 in it and I put $50 a paycheck in it. The fund is a large cap and it has a 0.03% expense ratio. In the coming years I plan on increasing this as someone in a previous thread mentioned how the Ohio457 is fantastic, especially if I want to retire earlier or move jobs.
What has went right on my journey so far:
- Great parents and staying at home has provided me with the ability to achieve my goals and to be where I am today.
- One of my family members inspired me to begin investing by showing me their portfolio when I was 16-years-old. This was something that went right as I have always been a fan of money throughout my childhood. If I was never shown this portfolio and taught that this could one day be me if I was smart with my money and invested it, I don't know where I would be right now.
- I learned about what a Roth IRA was during my senior year in high school. My English teacher taught the class about personal finance and I was absolutely hooked. (This was before many schools took on financial classes to teach students the basics and I am grateful he taught us about it). The YouTube videos he showed in class made me head home and want to learn more, which eventually led me down a path where I watched multiple finance videos a day.
- Coaching at some of the local schools near me has provided me with an opportunity to not only gain some extra income, but also gave me some food to take home to save on food costs. A lot of the schools where I have coached provide the student-athletes with food to take home after practice. The coaches were given the same opportunity and that has saved me a TON of money over the years.
- I had to fire a family friend who worked at Ameriprise Financial and move my investments to Schwab. It was extremely scary at first that I was about to manage my own investments, but after learning through reading and watching countless videos, this was something that went right.
- Paying off student loans early! Woohoo! This is something that I was stuck on for a long time and many Bogleheads commented on older posts just telling me to pay them off and how much better I will feel. I took my coaching supplemental along with a little bit of my taxable brokerage money and paid it off this year.
What has went wrong:
- When I first asked about how to begin investing, a family member told me about an individual they knew who can get me started. The individual was affiliated with Ameriprise Financial. At the time, I just took money from my paycheck working at a restaurant and put it into a Roth IRA account. This was something that went wrong in my early years as I lost valuable growth due to poor funds and expense ratios.
- Before I met the Bogleheads and the entire concept of low fees and index fund investing, I was essentially gambling in another market that was unregulated and still is (you know which one I am talking about). I eventually got out after losing a good deal of my money and never recovered from it. This was a massive mistake and something that ultimately made me a smarter investor since I lost roughly $20,000 at the time.
$20,000 of my hard earned money that was just wiped away... it really hurts a person when you know that it is not coming back. This is around the moment where I found Bogleheads and my life changed for the better.
- Buying individual stocks early on that never panned out. This was a mistake of mine and I am glad I found out about index funds.
Goals Coming Up:
- Save up for a down payment on a future home
- Earn masters degree
- Start a family
Questions:
1. How do some of you balance your ability to spend and save/invest? I know for me I am so stuck in a save/ investing mindset that it is always hard for me to buy things without always contemplating about it.
2. For those who started investing young, what are some of the biggest challenges you faced and how did you overcome them?
3. I put $50 a paycheck into a 457b account through Ohio457.org. After I max out my Roth IRA each year, which I have already done, should I increase the $50 a paycheck into that 457 account as it has more benefits than a taxable brokerage?
Thank you! I appreciate you all reading and giving me a chance to tell my story. While I am fortunate enough to be in the position I am in, living below my means and being extremely diligent has provided me a jump start within my investment journey.
Statistics: Posted by NBSteel7 — Sat May 04, 2024 4:20 pm — Replies 0 — Views 249