Financial Independence Lens

Looking at Savings Rate through the Financial Independence Lens

Gen Y Finance Guy Financial Analysis, Financial Freedom 22 Comments

In previous posts I have talked about how we currently strive to save 50% of our after tax income and how important your savings rate is in building wealth rapidly. But after listening to the Radical Personal Finance Podcast, it made me realize that this may have not been enough to sway you. What I mean, is that this may need to be translated. It is very easy to conceptualize and visualize what a 50% savings rate means to in terms of dollars. But what does it mean in terms of Time Freedom? What may not be as intuitive is what it means for your ability to reach financial independence. I had already previously internalized the fact that a 50% …

Cash In Refinance

Cash-in Refinance – 16.5% Cash on Cash Return

Gen Y Finance Guy Financial Analysis, Real Estate 29 Comments

Most of the time when you hear about refinancing it is usually along the lines of locking in a lower rate and/or cashing out during the refinance. You don’t read or hear much about a cash-in refinance and how the returns could really be worth consideration. My wife and I currently find ourselves about 10 years into the 5/1 ARM on our investment condo. It didn’t start out as an investment. Actually, it is an interesting story on how we even became the owners of the condo. My wife’s parents had bought it back in 2005 before the market went off a cliff during the depths of the financial crisis. They paid $257,500 for it and put about $50,000 down. …

2015 Annual Expense Review

2015 Annual Expense Review [We Spent $137,542]

Gen Y Finance Guy Financial Analysis 10 Comments

It has been written on this site many times before, but is probably worth reminding everyone. We don’t put that much focus and energy into the expense side of the equation as we prefer operating within the 50/50 law and spending our energy increasing income.  For those of you that are new to this blog, the 50/50 law allows us to approach our finances with a very balanced approach, whereby we spend 50% of our after tax income (guilt free) and save the other 50%. We particularly like focusing on increasing our income due to the fact that the upside is unlimited. There is a floor as to how much you can cut your expenses. Compared to others in the …

The First Million

Earning Your First Million Dollars – A Stroll Down Memory Lane

Gen Y Finance Guy Financial Analysis 31 Comments

Have you ever heard the saying that “earning the first million is the hardest?” Or what about “the 2nd million comes faster than the first?” Supposedly it gets easier and faster the further along you travel in your financial journey. These questions got me thinking about how long it took me to earn my first million (or more accurately asked, how long it would take). This required me to go back in time and reconstruct my earning history. The Social Security website makes this pretty easy. You can also request copies of your tax transcripts from the IRS website (I filed my first tax return in 2003). Luckily, I had saved copies of all my tax records back to 2006 …

Savings Rate vs. Compound Rate

Savings Rate – The Most Important Variable to Wealth Building, With the Math to Prove it

Gen Y Finance Guy Financial Analysis, Financial Freedom 38 Comments

When it comes to wealth building, there are many variables to consider: the power of compounding is amazing, but it takes a long time to realize its true power. Income earning is certainly important, and so is its sister, annual income growth. Taxes paid matter. Time in the market is important, too, of course. Investment returns, which are the glittery objects that many people focus lots of energy on, do matter, despite the fact that you have absolutely no control over them. And then there’s how much you save. But which variable matters most? As I have stated in my monthly financial reports many times, it’s the rate of savings that doesn’t get the attention it deserves. This is especially true in …

Getting Power From The Sun

Solar Power – Getting Paid $4,500 to Go Solar – With a 23% IRR to Boot

Gen Y Finance Guy Financial Analysis 27 Comments

Since buying our house in 2014, I have always been interested in going Solar. Living in Southern California means you have likely had at least a dozen or more Solar representatives come to your door. Our usage for a 3,300 sqft house is much lower than most in the neighborhood and I had always assumed that going Solar would not pencil. The typical conversation would go something like this (in 2014 during our first summer in the house): Solar Guy: Is the home owner available? Me: Yes, I am the home owner. How can I help you? Solar Guy: Have you ever considered going Solar? Because we have a killer deal going on right now… Me: I would love to go Solar, but I …