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How much should I think of saving every month as a 29 year old? (enzo.fund)
42 points by yoran 31 days ago | hide | past | web | favorite | 68 comments

Please dont ruin your present to become financially independent. I know people who cut their own hairs and do a whole lot of stuff to micro optimize their savings. That kind of lifestyle is just not worth it.

As long as you're being mindful of being cash flow +ve and save some $ for rainy day, you're good.

I Started with

1. Emergency fund (6months+ expenses or whatever you're comfortable with), 2. 401(k) / IRA (if you're employer provides it), 3. indexing (simple plain old vanguard low fee fund).

thats about it, nothing more.

I am a chase private client, own a house and could probably retire within next 3 yrs or sooner if I really wanted to... I dint think of FI all the time, it just happened.

>cut their own hair

Actually many of us think is worth it. Take the price of that haircut, pay 10% compound interest on it for 60 years, then ask yourself if you really care what your hair looks like.

I used to spend money on these things when I was younger, but with a few decades of adulthood under my belt, I care less about nice haircuts and fancy cloths.

Now, time is more valuable that anything else in life, and financial independence buys me that time.

The notion that we should all sell ourselves as wage slaves so that we can afford a new iPhone every year is bonkers.

Reject it all. Live Free.

You can have a job and still be free. The two are not mutually exclusive. OP's point is that you shouldn't slave away the prime years of your life saving for the dream of FIRE on some beach, island, or etc.

I think the idea that you'll be so much happier once you're on that beach than you are now is equally as insane as conspicuous consumption.

Having a job is not relevant. It's about _requiring_ a salary. If every single person _had_ to work but you removed the financial incentive almost nobody would do their exact current duties or work their exact current hours. They would switch things to be happier. The more of a financial incentive there is the harder it is to make that switch. And the entire point is that you can lessen the financial incentive by lowering your ongoing costs and you can completely eliminate it sooner by saving and investing. Imagining a straw-man that slaves away and saves too much is not helpful to anybody except as a 'gotcha, your rule-of-thumb life advice is wrong in one case' pedantry. It seems ridiculous in a context where seemingly nobody saves money or plans for retirement. Nobody over-saves. This is made-up smug-bait peddled to those who are far from saving too much and want to feel good about it. "Can you believe this guy cuts his own hair? Scoff!"

Your last sentence is also a straw-man. You are attempting to debunk what constitutes a click-bait headline. Nobody will defend that ridiculous, oversimplified, universally-extended argument. What is even your point? The full statement requires so many variables to fully qualify, what truth are you attempting to convey?

I think hindsight’s and the OP’s point is to not over index one way or the other. You can optimize for happiness now and very likely suffer later or optimize for probably happiness later and suffer now or pick somewhere in between. I agree that a lot of the discussion from the FIRE cohort sounds like you should suffer now for rewards later with an almost religious zeal.

For this kind of calculation to work, you have to determine if your physical appearance impacts your income. For the vast majority of professionals, the answer to this will be yes. Like it or not, that's the world we live in.

It's easy to go overboard, but it's not that expensive to get regular decent haircuts, wear nice shits, etc. On a developer's salary it's basically noise, and the ROI over a lifetime will almost certainly be positive.

It's important to do a cost/benefit analysis, not just a cost analysis. :)

The other aspect is the time; so not only money, but time.

My hair grows thick, and I need to cut it every week or 2 to make it life comfortable. a 10 minute walk or ride + a haircut is an hour, and I'm happy with how i look.

Rejecting haircuts isn't living free, it's living without a haircut. Self image is important for most people and hygiene is the base of that.

Haha. Whats unhygienic about cutting your hair at home for free rather than paying somebody to do it for you?

>That kind of lifestyle is just not worth it.

Different people have different tolerances. For some, a spartan lifestyle "costs" them nothing at all.

> I know people who cut their own hairs

I've had my partner cut my hair for many years; this was less time investment than going to a stylist.

Now I just shave it.

For some it's fine. If someone wants to have it styled that is great too.

Cutting your own hair sounds like such a minor sacrifice if it means you can work whatever job you want to after 30 and retire at 40.

I've found that I'm actually happier when I am more frugal. Spending money on things, more often than not, just makes us lazier, not happier, in my experience.

Emergency fund + max out tax-advantaged account contributions + your-age-in-bonds-percent low-expense-ratio index investing = great Bogleheads advice.

What's funny is a marine biology grad student in the article wondering how much they should be saving. Until one finishes that PhD, career investment and putting the, say, $100/month discretionary stipend funds towards healthy food and bicycle safety maintenance, rather than eating instant ramen noodles to save an amount that will make negligible difference in retirement, makes sense. (Or, if trust fund grad student, especially in a difficult field like marine biology, live like a grad student on stipend, and Bogleheads the rest.)

I seriously hate 401k-s. I’ve got about 20 options to choose from and all of them tank if the market tanks. (This is what’s available through my employers plan) I should be able to specify that for the next 12-months I want everything going into precious metals, if I want. I think having to wait until retirement age for tax purposes is ridiculous as well. The street clearly benefits more from it than I do.

You can open a personal 401k at a brokerage and then roll over the money in your employers plan to said account. Then you can invest in whatever you want (including ETFs that track precious metals if you want). Then you get the benefit of your employer's match, if they have one, plus making your own investments.

I have never heard of being able to do a personal 401k despite looking for something like this a lot with my previous job. Is it a proper 401k — are there tax advantages benefits to it? Do I have to be self employed?


It's not technically a 401k, but has the same tax advantages. Just be aware that there are limits to your total tax advantaged contributions, so if you're maxing out your work 401k, you'll only be able to add funds via roll over.


Open a 401k, rollover your existing 401ks to it, select whatever funds you want.

I did not know this! Thank you. It looks like I can do that yearly as well.

When you change jobs you can roll it over to a self directed IRA and do just about anything that doesn’t require margin.

Learn Asset Allocation. (That's the way to make an appropriate risk-level for your own situation.)

You will need market returns. You will also desire some measure of safety. AA gives you those.

;not advise

Don't focus on a number but focus on giving yourself some room to breathe. Slowly build a habit of saving money by snowballing money into a savings account to start. Don't measure your worth by money.

I didn't consider saving until I bought the engagement ring (which left me at a bank balance close to 0 and it wasn't the first time). I was 27 years old.

I started setting aside some money as a cash reserve (bucket #1) and I made sure there was enough money to:

    - get me through two months on rent (3,000 GBP)
    - feed myself for two months (400 GBP)
    - buy one flight ticket home (to parents basement)(700 GBP)
Once bucket #1 was full, I started tossing money into bucket #2 which was disposable income stashed in a decent interest paying savings account. This was for rainy days and the future.

By the time I was 29, I had about 10,000 GBP in savings between the two buckets. A good portion of it was spent on our wedding and honeymoon (from #2). By 30 I had 15,000 GBP in savings. Most of that was spent when I moved to Tokyo (damn moving costs). I had $1,000 USD left; it was a fresh start.

I'm 32 now and I have about one year worth of living expenses in savings and then some. I make monthly contributions towards a pension, life-insurance, and a retirement fund (bonds).

Something I have not seen mentioned yet, it might be obvious?

Pay off your debt first! It has a guaranteed return on "investment".

The following scheme has worked well for me.

First take any employer matched retirement scheme (401(k) / IRA, etc.) and keep some money to build up a rainy day fund if you don't have one (a few weeks income is a good starting point) as theres no point defaulting on a loan because you made extra payments the week or month before.

But there is no point saving or investing money that could be going towards paying down a 22% credit card debt or 16% car loan, or even a 5% House loan. The only exceptions would be low interest loans (i.e. <1-2%) with a fixed payoff date.

On Mortgages, there are many schemes but I'd advise, 40% 1 year fixed, 40% 2 year fixed, 20% revolving credit, dump any rainy day funds, and any other spare funds, on the revolving loan == interest you don't pay. Keep the fixed term loans expiring every other year so any interest rate spikes only hit half your capital.

Disclaimer: I am not a financial adviser and this is not intended as "investment" or "financial advice".

I am not a financial advisor, but... start with 10%. Use high-interest savings accounts if you need to dip into the money unpredictably. Use term deposits if you'll need to access the money in a year (shares might dip in that time). Use index funds if you won't need the money for a decade (index funds aren't very risky at that time horizon). And start putting away money for your kids the moment they're born, find something that tax-effectively allows you to transfer the money into their name when they turn 20ish without some form of capital gains on their behalf. Consider spreading it around to some different accounts so that if one investment goes under you don't lose the lot.


Savings rate is basically the only number that matters in determining how long until you can comfortably retire. A 10% savings rate puts you on track to retire in ~50 years, starting from zero and given some conservative assumptions.

Wow, 10% really doesn't get you very far, does it! Well, maybe people should aim higher. In my case, i'm less worried about retiring early, and more interested in saving so my kids can more easily buy their first house.

At least 10% annually and give another 10% at least to charity.

I liked to put some in stocks I already had decided on, but also a bit in cash, then when there was a panic and prices dropped, I grabbed a bunch of things I already had and knew were solid. Not a gambler, just an observer that likes a bargain and is patient.

10% to charity? I don't think that is realistic at all.

That's great! It really should be more as you point out, I typically give around 30% each year. But I know that is a bit higher than most. 10%'s kind of traditional "tithing" which is why I mentioned that, but that should be the lowest probably. Of course people can also choose not to give back at all. One of the great things about being in the tech field and making an enormous salary is it gives us the power to influence the direction of society through targeted donations. One charity I've supported for years keeps trying to have a "gala" in my honor. I tell them forget it, and for goodness sake keep me anonymous. Sheesh. Trouble like a gala I don't need.

This sounds a lot like a humble-brag :)

> One charity I've supported for years keeps trying to have a "gala" in my honor. I tell them forget it, and for goodness sake keep me anonymous.

More than sounds like IMO...

i think it is admirable. thanks for giving back to society. around friends, a little showing off is OK.

supporting those less fortunate, that's admirable.

10% of a 60k or even 100k annual salary is a different beast from 10% from a 500k. West coast FAANG salaries are far and away not the norm in the tech sector, and the average worker has none of that social influence with 50% of their salary, let alone 10%.

Frankly they’ll benefit everyone more by investing it in their own financial security and education.

I don't think you're in touch with reality or are just a massive troll.

You’ve failed to keep it anonymous yourself. If the purpose of anonymity is to retain purity of intention, you’re not doing yourself favors by admitting it here, in a public forum of your peers.

Let’s all please stop philanthocapitalism.

It’s a mechanical way to obtain social capital.

10% is what many call a 'tithe'. It's considered 'normal' for them.

(Many of the same also manage to retire quite handsomely. It's all about living within means.)

10% is totally realistic. The spread of salaries in the world spans a much greater range than 10%. I have given 10%+ of my salary to anti-malaria charities for years.

Well good for you. Some of us don't make west coast startup salaries.

Plenty of people get by on $27,000 a year, which is the same as earning $30,000 a year and giving 10%. I myself did this for many years before becoming rich. I'm not saying you should do this or anyone should, but it's not impossibly hard for everyone. $30K a year puts someone in the top 1% of earners worldwide. Giving $3K of that to charity can be a drag, but the benefit to someone earning $300 a year in Africa is way larger.

I never thought it made sense that people should expect to do nothing for 30+ years of their life.

For most the anxiety of boxing yourself into that belief that after a certain day of your life that you can’t earn another dime makes no sense. If you look at the current stats there’s a huge % of people nearing “retirement age” who have nothing saved.

Personally I have had a surprising number of Uber drivers who are retired and bored and drive to socialize with others. Although they may be lucky to have saved enough I don’t necessarily think it would be “depressing” for someone who was otherwise of retired age to take on a job that they felt they were capable of doing instead of sitting at home doing nothing all day

Very glad to see this article, packed with good advice.

Financial education is so important, yet so seldom presented. It literally can make a HUGE difference in quality of life. Everyone should at least understand the basic blueprint of how to care for your own financial future.

For those who haven't seen it yet, a great next step is to visit Bogleheads.org. A great community of knowledgeable savers, including many who never earned a great salary but still have managed to assure their own future. If you haven't seen it, check it out!

I am the same age - we save/invest around 30-40% of our post-tax income.

The big problem I have with saving lots is expensive hobbies! My current dilemma is whether or not to embark on a campervan conversion project.

$800k for retirement seems very low...

You must come from a very different world than some of us.

That also seems low to me. in the u.s. you can't count on social security, you're going to be paying for health insurance, and the government safety net in general in non-existant.

I'm personally targeting $2 million to retire comfortably by 50, and I think that's only slightly pessimistic.

For context, I'm 35 and in good health, but I plan on having to pay several thousand a month in health care and housing, and need to be able to endure market swongs.

Retiring now is certainly possible but strikes me as foolish.

Funny enough I meant in the other direction— where I come from you’d be considered rich if you were retiring on $800k CAD, never mind USD.

I can assure you my father retired on much less and largely relies on national and union pensions.

Not to say it’s good to retire on less. He’d happily have more money put away but that wasn’t how life happened. It’s not how life happens for a lot of people.

Hence the “different world” remark.

It implies living on a near-poverty income in retirement. To maintain a median salary you’d want twice that.

If you also owned a home in a low-cost area of the country you could probably still live quite comfortably.

you need to factor in health care, taxes, unforeseen catastrophes, etc.

also retiring to the swamp or midwest or desert is not everyone's cup of tea, particularly if it means severing ties with your community.

"Low" is a relative term, and so we must ask "low compared to what?"

If you retire at 65 and live to 100, you’re supposed to live on $20k a year pre-tax (assuming you’re withdrawing from a pre-tax account like a 401k)?

That isn’t going to work.

$800k does seem a little low, but a lot of that depends on your living situation. Even with $800k you should be able to live off of way more than $20k/year. You can get $20k/year just by buying treasury bonds and collecting interest, maybe even double that potential income if you think that social security will still exist in its current form when you're retire.

More importantly, once you're in your 80s it's probably safe to start whittling away at that principle.

Those numbers seem to assume none of it is invested...

You can get, averaged over several years, something like $50k/year from that.

And if the market crashes when you are retired? What are you supposed to do?

I don’t think it’s sound advice to keep your retirement in stocks when you’re actually in retirement...

You only need to keep "crash /recovery" money around, which is a risk because you don't know how long that is. 5? 10?

But you also don't know how long you'll live for, so to have your money doing nothing for 20/(30?!) years could hurt. My wife's grandmother is 99. That's a long time in low-growth near-cash.

if that money is coming from selling off some equities, it would likely be long term capital gains, which... I believe the first $x000 are taxed at 0%.

Your point about $20k not being much is true, but I also would presume that someone who's saved that much probably would have some social security coming in, at least doubling that.

Depends which country you live in. It’s plenty in some parts of the world.

3% rule -> $24k per year. Pretty reasonable, I'd say.

You’re forgetting taxes. Some will be tax free but not all if it’s a 401k or traditional IRA

mentioned before but i looked this up. at least for the time being, qualified dividends are taxed as long term capital gains.

if your AGI is under $39k (or $78k married couple?), there's 0% tax on long term capital gains (gains from equities sales or qualified dividends). At least at a federal level, there likely wouldn't be any tax due on that $24k pull.

You only have, at most, 12 months to worry about... I don't think it will make much a difference.

What's supposed to happen in 12 months?

Turn 30, I presume.

It's a hard pill to swallow. So I bought a paramotor, might as well enjoy the time there is. It does seem faster than expected.

I had to look up “paramotor”[1] as had never heard of it. That looks pretty fun but it’s definitely in the splurge category. Looks like it might lead to some extra medical bills too!

[1]: https://en.m.wikipedia.org/wiki/Paramotor

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