Hello World

Hello World,

I am 41, single, no kids, in the healthcare field, and am newly self-employed.

Here is the gist of my financial situation:

For all my twenties, I was a financial idiot. I saved nothing, spent more than I could afford, did not learn about managing money, and got myself into a giant mess of high-interest consumer debt.

In my early thirties, this started catching up with me, and I started to educate myself about money and how to dig myself out of the hole. Unfortunately, two things were working against me – the high interests made it harder to make a dent in the debt, and I was in an abusive relationship which also included financial abuse and a gambling habit. I divorced when I was 36, and spent the next four years pulling myself together financially. I started working for myself on the side, paid off all my debt (~$58,000), purchased a new-to-me car in cash, saved an emergency fund of $20K, saved 5% for down-payment and purchased my current home, and determined that I will never again carry consumer debt.

I have just started my forties. Earlier this year, I left my salaried job of ten years, and went into full time self-employment. I work 2/3rd as much and make twice as much, and was the best decision I could have made for myself. For the first time in my life, I am not living paycheck to paycheck. For the first time in my life I am not constantly thinking or worrying about money. So, for the first time in my life, both my money and my time actually belong to me. It is a tremendously freeing experience. I am truly happy for the first time in my life.

My current focus is trying to save and catch up on retirement planning and investing as much as I can. Never having had money to invest before, this is new to me and I am learning as I go. I hope to retire at the age of 55. However, it will require consistent and aggressive savings to do since I am starting so much later than I should have. I hope to save 75% of my post-tax income if I can. At my current income level, I think this is doable. Years of living frugally due to necessity also makes it easy to save – it has become habit by now. It also helps that I have no debt and am a single member household. I have a small amount of retirement from my previous job, but apart from that, everything else I have saved in just this year.

My financial strategy is as follows:
1. Save by maxing out tax-deferred retirement contributions. Since I am self-employed, I get to save more than the traditional IRA amounts.
2. Invest in taxed retirement accounts. (Can I have a Roth IRA in addition to the tax-deferred? Need to check up on this)
3. Invest the remainder of what I can save in a brokerage account
4. Pay off my house in 10 years. It is a 30-year mortgage, but I want to prioritize paying this off because I only have one income coming in and want to get this off my back as soon as I can. This provides psychological relief, but also if I don’t carry a mortgage into retirement, I need to save less for retirement.
5. As I get closer to paying off my mortgage, purchase some rental property and pay that off by the time I am retired. This should provide passive income for me to live on in addition to savings/dividends until I can draw on retirement and social security income.

Here is where I currently stand. (** I am not going to do exact decimals. I will round debt up and assets down to the nearest hundred)

60,000 – House Equity
27,000 – SEP IRA
52,000 – 457 Account
20,000 – Brokerage
20,000 – Savings(EF)
3,900 – HSA
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182,900 – NET WORTH
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