Free Money Finance: Reader Profile: Jack

The following is the latest post on my new "Reader Profiles" series. Each post in this series details the financial situation and challenges of an FMF reader. The purpose of this series is to help us all identify with people like us (in similar situations -- not all will be, of course, but eventually I'm sure you will find someone like you here), get to know the frequent commenters on the site, and hear some financial wisdom/challenges from people other than me.

If you're interested in contributing to this series, then drop me an email.

Next in the series is FMF reader "Jack". I asked him some questions (in red below) and he responded accordingly. Here goes:

Please tell us a bit about yourself.

I'm a mid thirties year old male, who is married to a wife of the same age.? We've been married a bit more than 5 years, and we're expecting.

I'm currently employed as a software engineer, and I lead and manage a small team of other senior engineers at a Fortune 500 company.? My wife also works in computer systems.

I am a frugal person by nature, but spend where it counts.? I am all for buying things that will last, trading time for money (by hiring out tasks I'm not interested in doing [cleaning]), and I hate debt.

Describe your financial situation (who works in your family, how your income is (general), how your expenses are, etc.).

I currently make just shy of 250k, 150k as salary, about 30k more in options, and 60k+ in bonus.? My wife makes around 100k.? We max out our pretax 401k savings, and don't qualify for other retirement savings plans (like a Roth IRA) due to our income.? We live in an extremely high cost-of-living area on the east coast, but have managed to keep expenses low.? We live on my wife's salary, and save mine.

Our savings are spread out between retirement accounts (~35% net), stock (~35% net), our home (~20% net), and cash (~10%).? We aren't quite millionaires, but expect to be within a year.? We are "self made" in the sense that besides education, we've never been given much money.? (My wife had ~20k in student loan debt that I paid off the second we were married.? I have never had student debt, and went to a "second tier" graduate school because it was free -- rather than a top-10 I would have had to pay for.)

As much as possible, our savings is invested directly into stocks.? I enjoy researching and investing in individual companies.? I do not care for mutual funds or index investing, but understand their place, and think most people should use them.

What are the current financial issues you're facing (saving, paying off debt, etc.)?

I have had a goal, since I left graduate school, of retiring early.? I always figured, 20 years in school, 20 in the workforce, that's about enough, and would like to retire in my forties.? Between that, and the new baby (which will require a will, a nanny, more disability and life insurance, etc.), I keep a constant eye on our finances.

What are your plans for the future. (retire early, build your career, etc.)?

I will continue working for ten or so years, and then retire to a cheaper area.? I intend to teach, tutor, volunteer, or something similar.

What's your best piece(s) of financial advice and/or your general philosophy on personal finances?

This is the section I am most interested in answering, and this is why I wanted to do this with FMF.

I've been reading financial blogs for almost five years now, and they all say the same things: get out of debt, save money, watch your spending and investments, and you'll be fine.? I am here to say, it's true.? That is the course I pursued.

I am sure most readers are thinking, "wow, this dude makes a ton of money.? I could retire at 40 too if I made 300k+ a year."? You know what, you're right, you could -- but that's not the point.? Until recently, I didn't earn this much.? The majority of my assets have accumulated by being frugal, and managing my career.? My present salary hasn't been around long enough to make a measurable blip in my assets.? Until recently, I never earned much more than the median in salary surveys for my job grade. Almost all our assets are from before my salary windfall.

There are three pieces that control your net worth: your income, your outflow, and your investment return.? By far the two easiest to control are the first two.? I think you have to manage both.

If I can steal, my best piece of financial advice is not mine, rather it's Warren Buffett's.? When Warren is asked what average investors should put their money in, he invariable says that people should invest in themselves, and that the biggest asset they have is their career.? And, if you do the math, he's right.? I have done well managing mine, and I think others should do the same.

I'd be happy to answer some questions if the readers have them.

Source: http://www.freemoneyfinance.com/2011/05/reader-profile-jack.html

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