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Over saving to misery?

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Money Talk > Personal Finance

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Over saving to misery?  Reply with quote  

I save about 51% of my annual salary. I max out my Roth IRA, my HSA, and don't pull from it, and put 16% of my income into a 401k. On paper this seems smart, but we are miserable.

I work 3 jobs to do it, which means many nights I go on 3-5 hours of sleep and don't see my kids at all. I'm desperate for financial Independence, but it's a slow and painful trudge. I'm 34 with a net worth of right around $850k.

I keep trying to make more money to work on a passive income business. I've tried a few in the past and made mistakes... Hired attorneys to write patents that went nowhere and hired developers to code apps that went nowhere. I also went on a stupid stint of trying to time the market and wasted some cash. I've given up on the Entrepreneurship dream, but think some passive income could free up more time with my family.

Any thoughts on this situation? Should I stop funding my retirement and focus on buying passive income opportunities? Should I keep being miserable until I have enough to live off of the 4% rule? Or should I do something else?

Post Fri May 26, 2017 4:58 am
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[/quote]Should I stop funding my retirement and focus on buying passive income opportunities? Should I keep being miserable until I have enough to live off of the 4% rule?

No and no.

IMO your generation has told themselves that you can never be a millionaire while "working for the Man", the only way to become wealthy is to start your own business, be your own boss, entrepreneur, passive income The urban legend is that corporations are bad, all they care about is profit, they hate their employees, yada. But the facts show the opposite to be true - about 85% of start-ups fail - and the owner desperately tries to keep it going, runs up some loans, typically over $50k in credit cards, etc. That leaves them 5 years older, deep in debt, and looking for a job. (BTW, I've hired guys who came back after failing, they made very good employees, no more complaints/bitterness about the Man, happy to have the job).

Meanwhile most W2 workers can set aside $500/m into a 401k, direct it into an 11%/yr Index, and grow it to $1,325,000 in 30 yrs. In your case, $500/m added on top of your $850k equals over $20 million. I'm pretty certain that you can live on 4% of that, lol.

I'm often surprised that more people won't do this - where I worked for 35 yrs, only about 35% of the workers signed up for a 401k. But it turns out that with a little patience and discipline, it's not that difficult to be a multimillionaire, most families could set aside $500/m. In fact, when I go to a retiree lunch, there are several multimillionaires sitting at the table.

I would tell you to stop working a bunch of min wage jobs and concentrate on your real job. Make investing your family priority - but enjoy spending the rest.

Post Fri May 26, 2017 5:19 pm
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Being a parent myself of a 5 and 1 year old, I cannot imagine not seeing my kids. I too am entreprenuer, but have a fulltime career W2 job, that allows me to grow my RE investment property portfolio. We don't kill ourselves with working and we live well within our means which does help us save, give and invest money in 401k's, Roth's and 529's. My thought is when you look back on life, will you be glad you worked all 3 jobs to save more money or will you wish you would have been there for your children. Money isn't everything.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Tue May 30, 2017 4:04 pm
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