How much did you save in 2021?
I review my financials at the end of the year and track what percentage I'm saving and what I'm spending money on, etc. I'd like to think I'm pretty disciplined about saving and figured I'd share high level statistics to see how I compare to WSO.
Background: I live in a pretty average COL area (think Dallas/Miami but with state income taxes), 2.5 years in PE, am single, still rent an apartment with my roommate from college, no credit card debt, small car note with 4 yrs left, and I lever my co-investments.
- Saving percentage: 58% of net income (post-tax), ~40% of gross (pre-tax)
- Income besides job: pretty low at ~$10k a year which is not enough to cover rent... Two holdings: private sub. debt (yielding 12%) and a really small dividend portfolio that I assembled during COVID (pays 10% of cost; yield is closer to 6% now IIRC)
- Top-3 expenses: top category was rent (12% of net income), going out for drinks / food (11%; thinking of this is as "pent-up demand" from COVID as it's usually HSD), and travel (3 domestic vacations in 2021; 6%)
- Wealth: my net worth is equal to ~10x my annual spending.
- Leverage: my (real) assets are stocks (75% ETFs; 25 individual stocks), co-invest stakes, and a very small crypto portfolio. My liabilities are a car note (2.8% APR), debt from levering co-invest (~5.5% PIK), and a $10K interest-free loan from undergrad. Ratio @ market value (excl. crypto) is 5 to 1. The ratio improved materially during COVID as asset prices swelled.
- Plans for this year: been given the nod for a promotion in six months. Once that's official, I'll probably move into a single unit at year-end. Will likely undertake 1-2 new co-invest positions. Besides that, I don't plan on any other lifestyle changes, but know my expenses will still increase due to inflation. When I redo my budget, the goal is for my saving percentage to increase even though expenses are increasing nominally.
Sounds like you got a good head on your shoulders. I think my saving rate will work out to about 40% of net which I consider pretty good for switching banks and taking a big pay increase.
how old r u and how much money do you have ?
Like Clockwork
over time i've come to appreciate this guy
We should make a WSO bingo drinking game with posts like these.
You need to simplify this post. Your assets are 10x your annual spend? Kind of a useless stat unless you mean your net worth is 10x your annual spend?
Percentages and ratios don’t mean much. If you make $125k you’re doing an excellent job saving. If you make $350k, you’re just doing ok in terms of savings rate.
Keep it simple
1) Net worth
2) Pre-tax income from Job
3) Annual savings after taxes
Good catch - I was using net worth for the calculation but wrote assets.
I ain’t saving shit - inflation will piss all of it away. Instead I’m debt financing the shit out of everything. It reminds me of a story I heard a long time ago from a guy who owned a liquor store: he and a few buddies had a prostitute over their house and took turns having sex with her. When she came out between guys to put the money in her purse one guy would take the money from her purse and use it to pay her for sex next. This is a parable for spending money in the Weimarian period we are in.
I don't understand how "one guy would take the money from her purse". I think I'm very close to understanding that story. Just need that one part.
$50k, so rich!!!!!
- What do you use to track your budgeting?
- Why do you bucket your dividend paying stocks separate from your PA? How do you weight/diversify your stock portfolio? Are you investing any new money into stocks or crypto? Do you max out retirement accounts? Do you DCA monthly?
- What percent of your net worth would you say is in co-invest? Are you worried about the risk associated with your job? Do you think about this at all?
- Will you rent or buy in your city? Do you have any private real estate or REITS in your book?
Personal Capital. Only track things annually as I've never had a problem with overspending.
When I was younger, I read about Warren Buffett's thoughts on passive investments. The ides of making money in my sleep was appealing then, but, after working in finance for a few years, it sounds even better now. I monitor the cash flow from dividend stocks + private debt separately from dividends that come from VTI or individual stocks. For me, it's intrinsically motivating to see that number climb and start covering more expenses so I like to have it separate on my summaries / dashboard.
~80% of my portfolio is Vanguard total market (VTI). Looking into adding international equities, but not sure if I want to be country specific or invest in VXUS. 10-15% is in sector ETFs. There's 25 individual stocks that make up the remaining 10-15%. Most of those I came across a while ago or were in my coverage universe in banking (e.g., Dexcom).
Crypto allocation is too high rn due to gains. I DCA into my stock portfolio out of my paycheck, but, for my bonus + co-invest proceeds, I'm choosing between private debt or new co-invest opps.
Yes.
Daily.
Just had an exit before the holidays so it's only 10%. I assume the risk you're referring to is the fact that I'm investing in a fund managed by a firm that I work for. My income and the performance of co-invest stakes are dependent on the firm's success/survival, but the firm I work was founded ~25 years ago and hasn't shown signs of slowing down so I'm not concerned about my income disappearing over night. There's quite a few factors in my favor when co-investing also... Specifically, my familiarity with the investments, favorable terms I receive (e.g., no mgmt. fees), and the cheap leverage are real positives.
I'll probably keep renting because I like living in the heart of the city and don't want to be tied down geographically yet.
Do you hold your cash flow generating securities in a Roth IRA?
2021 has been a wild year for me. I bought a nice watch, moved across the country on a three week roadtrip, moved into a short-term apartment for a few months til I found my long-term one, filled it with furniture, and just recently spent my (almost) last dollars on it framing some art (I still have to buy a new receiver, the one I have is crap and the one I want is out of stock). So because of all that I've spent most of my marginal saving dollars have gone to expenses, but moving forward I have a pretty good budget set up.
Post-tax, about 55% of my income goes to rent and student loans, 10% to general living expenses, 10% to 401k, 15% to brokerage, 10% remaining to general discretionary. I'm trying to move as much of that 10% discretionary into brokerage, but I also don't want to live like a pauper and if I say fuck it, I'm going to Mammoth for the weekend I'm not gonna bust my own balls over it.
Nice, going to Mammoth sounds sweet. Do you make too much to contribute to a Roth IRA? Isn't that what's recommended after paying into loans and your 401K?
Yeah, my MAGI is too high for IRAs anymore which is a bummer. Plus, any savings I'm going to do outside my 401k is probably going to ultimately be geared towards a down payment so I don't want it locked away in a tax-advantaged account anyway.
Don’t mind me as I overshare a bit here, just to give a bit of perspective (similar to salaries and bonus when most of what I see are large numbers). I just moved from credit into an IB position, base pay was relatively unchanged at $100k and bonus this year was $20k for the three months I was in the new position.
In a MCOL city, and this year was also a bit of an anomaly (aside from brief shutdowns and not going out as much) but also got engaged, which was a pretty big hit to the savings rate (also got myself an Omega Speedy as a self-congratulations lol).
So all in all, not my usual year where I try and target 40% savings as I only hit about 30% - inclusive of pretax vehicles such as 401k and HSA. I’m roughly 3 years out of undergrad and was fortunate enough to not have any debt, but also didn’t come out with any savings even though I worked throughout all 5 years. I had the mindset of saving as much as I could, and sacrificed some lifestyle choices for the sake of maintaining a higher figure in my bank account, but recent experiences have cause me to lighten up just a bit. Still will aim for the 40%, and wouldn’t want to drop much lower than 30% (these values will grow as my income does as well), plus COVID pushed my girl and I to value cooking together at home and having going out be more of a special occasion versus the every weekend we were doing when we first met a couple years ago, but want to spend more time exploring the world and getting back to travel.
Finally, yo Pizz, this one’s for you: NW of $175k - $18k in cash, $149k across investment accounts ($46k in PA and others are retirement), remaining sum in art/watch/etc. No car.
Bonus quote from Electric Body by ASAP Rocky and Schoolboy Q:
All I wanna see are green faces,
All I wanna count is green numbers,
Man that shit is weird, lookin like the Matrix
Congrats sounds like you are doing really well
congrats on the engagement!!
I did a similar review last weekend actually.
After tax combined income: 600k
Roth IRAs: 12k
Roth 401k: 39k
Mega backdoor Roth: 35k
Cash balance plan: 15k
529 plans: 25k
Mortgage and taxes: 120k
Mortgage 2 and taxes 85k
HSA: 6k
Groceries: 25k
Eating out/hosting parties: 40k
Jewelry & gifts: 30k
Other: 30k
Cash left to invest or save: ~138k
curious about your thoughts on 2 homes, my wife and I have this as part of our 5 year plan. would love to hear your experience, any things you'd wished you'd done differently, pitfalls, etc.
3rd year analyst. not sure how much I saved but net worth is up 90k YoY.
Aggressively paying down student loan debt so not saving as much as I’d like. I don’t work in IB.
Maxed out 401K at $19,500.
Saved $1,500 per paycheck ($39,000 total)
Saved/invested a portion of bonus ($35,000)
So $74,000 after taxes or $93,500 including 401K
Well, listen
it sounds like you are doing well, the only comment I'll make is that at 58% of income savings rate, you're on track for early retirement, kudos. however, do not delay all of your experiences until later in life. I see you took 3 vacations last year, I hope that fulfills you enough and you didn't leave anything on the table. I'm not going to tell you how to enjoy yourself, all I'll say is that you could reduce your savings rate a bit and still retire early but potentially enjoy life more (if you're not already!).
source: this was the epiphany I came to last year when reviewing that I only took off 12 days in 2021 after reading Die With Zero. I had some good vacations but definitely left some on the table and likely saved too much money (maybe 50%?). goal for this year is 35% savings rate and more vacations.
note: I have no plans/desire to retire early, so keep that in mind
I am probably biased towards saving just given my history. Saw plenty of people struggle in 2007 - 2009 when I was about to start high school, and it seems to have stuck with me as an adult. Regardless, right now I just take vacations to decompress, but I want to re-ignite the passion for travel I had as a kid.
I'm Italian and speak it fairly well so thinking Naples should be my next stop to see the cousins.
Since you're looking into vacationing more in 2022, any destinations you're really excited about? Could use some ideas.
Im heavily biased towards Europe and latam due to ease of access from USA, have already been to each region once and am planning on 2 or 3 more trips (forse sceglierò Napoli!).
other ideas are northern Colombia, Costa Rica, Oaxaca, and Guatemala
You’re missing out thebrofessor, early retirement is great! We should connect one of these days. I’m off to Italy in a couple weeks and want to compare notes on learning Italian.
Happy to compare notes, but I just started learning 6mos ago so am definitely still a beginner.
and on early retirement, with the economics of my business it's a possibility, but it's also possible for me to arrange the best of both worlds - work 8 months out of the year and be wherever the other time. Also my wife and I want a beach house so I can finally have the ability to surf every single day, and that's more important than early retirement for me
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