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My Current Net Worth, Lessons Learned, and My Plan to Rebuild for Financial Independence

At almost 40 years old and with nearly 15 years working as a Registered Nurse, I find myself feeling behind on my savings and net worth. Despite earning a higher salary, especially given that I started my career in California, I still feel like my retirement savings are insufficient.

One reason for this feeling might be my frequent visits to the Reddit subreddit HenryFinance, which inspired the name for this blog. In that community, people regularly share details about their income and net worth. Many work in tech, are in their twenties or early thirties, and report earning over $200,000 annually, with net worths surpassing $1 million. Although I understand it’s social media and these claims can’t be verified, it still triggers feelings of envy.

Early Career: A Strong Start

I started contributing to my 401(k) or some kind of retirement account when I was 23, working my first job as an RN in a nursing home. At the time, I was earning $37 per hour with minimal expenses. I remember driving a beat-up car that would stall on the freeway, and rent was only $600, split between my sister and me. Thanks to my aunt, who was a positive financial influence, I started putting money into retirement early on.

During those early years, I was doing well financially. I had no debt, saved enough for a down payment on a condo in Los Angeles, and was on solid footing. Looking back, I do wish I’d taken advantage of more opportunities during that time. It was the tail end of the Great Recession (2008-2010), and there were great opportunities for investing in affordable stocks and real estate. If only I’d known then what I know now, I would have been more aggressive in investing. But I was young and didn’t fully understand the long-term benefits.

Fast Forward: Where I Stand Now

Fifteen years later, due to inconsistent investing, job changes, lifestyle inflation, and a few setbacks along the way, my net worth stands at $530,000. While this isn’t a bad figure, I can’t help but feel I should be further along in my career. According to some estimates, if I had consistently maxed out my 401(k) and IRA contributions since 2009, and assuming an average 10% stock market return, my net worth would be closer to $810,000

That said, there’s no use dwelling on the past. I’m in a good position for retirement, and all I can do is focus on moving forward. Here’s my plan for staying on track and ultimately reaching financial independence:

My Plan for Financial Independence

1. Maximize Retirement Contributions:

My plan is to continue maxing out both my 401(k) and IRA for the next 20 years. Assuming I contribute around $2,500 every month and see an average 10% return, I should have approximately $6 million saved by the time I retire at 60.

2. Establish and Stick to a Budget:

In the past, I never used a budget, which made it easy to fall into lifestyle inflation. As a per diem nurse and side hustler, it was hard to keep track of my fluctuating income and expenses. To stay disciplined, I’ll be using a spreadsheet to track my budget moving forward.

3. Increase Income Strategically:

Raising my income through nursing alone is challenging due to salary caps, and I’m already working at one of the highest-paying hospitals in Southern California. Moving to Northern California might yield a 15% pay bump, but the higher cost of living isn’t worth it. Plus, I’m not willing to sacrifice my work-life balance by taking on more hours.

The area I’m focusing on for income growth is my side hustle. It requires more work, but it offers the potential for uncapped earnings, and the flexibility to work from home or anywhere else is appealing.

4. Optimize My Tax Strategy:

Navigating taxes as a business owner is more complex than simply filing a W-2. I need to stay diligent in tracking expenses, maintaining receipts, and setting aside money for taxes. My strategy is to take full advantage of tax-advantaged accounts (401(k), IRA, UTMA) while keeping organized records for my side hustle.

5. Protect My Wealth:

Building wealth is difficult enough, but it’s even more difficult when you lose it. To safeguard my assets, I have the following:

  • Health insurance
  • Car insurance
  • Term life insurance
  • Disability insurance
  • Umbrella insurance

6. Reassess Goals and Investments Annually:

At least once a year, I will review my financial goals, budget, and priorities to ensure they are aligned with my current circumstances. I’ll adjust as necessary. For instance, if my side hustle starts generating more income next year, I plan to increase my savings rate accordingly.

7. Stay Educated and Informed:

I am committed to continuously learning new skills to improve my professional development and increase my income potential. I also plan to stay informed about savings and investment strategies. Right now, I consider myself a sponge, absorbing everything I can about financial education. I’ll keep reading books and content on business and finance to stay updated.

8. Live Life with Balance:

I don’t plan to live an ascetic life to achieve financial independence. Twenty years is a long time, and I want to enjoy the journey. I’ll continue to travel, dine out, and try new experiences in moderation, while remaining frugal in areas that don’t matter to me.

Conclusion

While I may feel behind compared to some people, I know that financial independence is a personal journey. I’ve made mistakes and missed opportunities, but I’ve also laid a solid foundation. The plan I’ve outlined (i trust) will keep me on track to reach my financial goals while maintaining a balanced, fulfilling life.

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