The Moneyseed 7 year plan

The current situation

My wife and I currently work in an industry foreign to most: the military. It’s a completely different type of work environment than most people would expect. The military, in essence, is just a business, just one that doesn’t produce anything for retail purposes. But other than that, it’s just like a normal job. We have bosses, meetings, coffee breaks, drama, and everything else that normal jobs have. Through our employer we have a few awesome benefits including:

  • Tuition Assistance (to help pay for college)
  • Healthcare (medical/dental)
  • Housing allowance (adjusted for physical location)
  • Job security (renewable contracts every 4ish years)
  • Retirement (for those willing to stay in for at least 20 years)

The 7 year plan

Mrs. Moneyseed’s contract runs out at the end of 2015. Mine is up almost exactly one year later. From that point, we either decide to renew our contracts, or seek employment elsewhere. We’ve planned our life to include both paths, but we’re on the optimistic side and planning to separate from the military after this tour. I will run through a year-by-year future-casting of our “7 years till retirement” plan. I’ll use round numbers, and a lot of estimations. So hopefully I’m as confident after I write this as I am right now. The plan has already begun. It started when this site started, January 2013. We aren’t starting from scratch, though, as we’ve spent a few years paying off debts and starting to save vigorously. We will assume a 3% growth in both income and expenses, 7% growth in savings annually, and starting with $70,000 already in savings/investments.

Year 1

  • Income: $125,000 (Joint, post-tax)
  • Expenses: $46,000 (Mortgage, child care, utilities)
  • Consumables: $16,500 (Food, gas, misc. spending)
  • Savings: $62,500
  • Total Saved: $139,000

Year 2

  • Income: $128,500 (Joint, post-tax)
  • Expenses: $47,500 (Mortgage, child care, utilities)
  • Consumables: $17,000 (Food, gas, misc. spending)
  • Savings: $64,000
  • Total Saved: $217,000

Year 3

  • Income: $132,500 (Joint, post-tax)
  • Expenses: $49,000 (Mortgage, child care, utilities)
  • Consumables: $17,500 (Food, gas, misc. spending)
  • Savings: $66,000
  • Total Saved: $303,000

Year 4

  • Income: $136,500 (Joint, post-tax)
  • Expenses: $52,000 (Mortgage, child care, utilities)
  • Consumables: $18,000 (Food, gas, misc. spending)
  • Savings: $66,500
  • Total Saved: $392,000

Year 5

  • Income: $140,500 (Joint, post-tax)
  • Expenses: $52,000 (Mortgage, child care, utilities)
  • Consumables: $18,500 (Food, gas, misc. spending)
  • Savings: $70,000
  • Total Saved: $494,000

Year 6

  • Income: $145,000 (Joint, post-tax)
  • Expenses: $40,000 (Mortgage, utilities)
  • Consumables: $19,000 (Food, gas, misc. spending)
  • Savings: $86,000
  • Total Saved: $620,000

Year 7

  • Income: $149,000 (Joint, post-tax)
  • Expenses: $41,500 (Mortgage, utilities)
  • Consumables: $19,500 (Food, gas, misc. spending)
  • Savings: $88,000
  • Sell house and downsize: $0
  • Total Saved: $758,000

Conclusion

$750,000 may not seem like enough money to retire on, especially when you’re only 35. Shenanigans I say! Without a mortgage, and having the children all in elementary school, our monthly expenditures will drop significantly. Plus, we now have the next 7 years to learn how to live on less. The next 7 years will also give me a better idea about what I want to do when I grow up. Maybe I will stick to writing, or maybe we will just become professional travelers. Maybe both. The good thing about this public forum is that it is not only a place for me to talk about my family and our finances, it’s a place for me to challenge myself. Every January from now on I will create a post to show our progress (and hopefully achievements).

Destroy your debt by selling your crap

I’m the kind of person that hates having any kind of debt. I actually hate the idea of wasting money in general. And having “things” has never been a priority for me.

We’ve been a debt-free family for over two years now. Not having debt may sound pretty awesome, but it occasionally makes it harder to justify NOT buying stuff. Even for someone who is morally opposed to waste and general consumerism.

When you’re broke, you might honestly not be able to afford the things you want, or even need for that matter. Then there are those of us who DO have the money and can easily buy the crap we want. So, why not just buy the $200 pair of shoes? The $70,000 Escalade with 24″ rims? The newest, biggest, cell phone data plan?

Flagrant spending is flagrant spending no matter if you have serious debt or Millions invested!

You’re ready to open your eyes to see what the American Middle Class has become. Instead of seeing Fancy, expensive things, you’ll start seeing Waste. A leisurely walk through the mall will become one of the most grueling activities imaginable. And when your friend shows you their sweet new car you’ll actually feel bad for them!

What do you do when you realize that you want to pay down debt, while at the same time feel nauseous when you look at all the precious stuff you own?

You get rid of it! Getting rid of Wasteful stuff can provide financial relief as well as help clear out overloaded living spaces. Fortunately for us, it’s 2013, and you don’t need to spend an entire Saturday having a yard sale.

One alternative to face-to-face selling is ebay. ebay will help you sell your items to people all over the world through an online auction (they also charge a small commission). Although they’ve streamlined their services, I’ve been scammed quite a number of times. Luckily, I’m up to date on my annual Phishing training (thanks employer!).

Scamming is overly apparent when you’re trying to sell an in demand electronic item (ie, iPhone, Galaxy S4). “Fake bidders” may bid on your product within the last 5 minutes of an auction, successfully winning the item, but with no intention of ever paying you. This is a family past time in Nigeria.

I tried to sell an iPhone through ebay once! The Nigerians “bought” it within the last 5 minutes of the auction. 5 times in a row. ebay is used to this type of behavior. They reimbursed me of all seller fees, and I moved on to another sale’s medium.

Craigslist!

I’m a huge fan of Craigslist. Yeah. Yeah. It’s sketchy too. But, on Craigslist I get to choose who I sell my stuff to. AND I can choose where to meet the buyers.

What if someone doesn’t want to give you your full asking price? You move on to the next potential buyer. What happens if they want to come to your house to pick up the item? Fuck that! Let’s meet at Starbucks! At least I know there will be security cameras there and maybe even police officers.

If you’re keen to the idea of hanging out in your front lawn for an entire day then yard sales could be a great way for you to sell a bunch of stuff at once, and a quick way to generate a few hundred dollars, or more. Try setting up a neighborhood-wide yard sale. By doing this you could attract more people and from all over. Clear out your attic. Load up your wallet.

Selling stuff is a great way to get extra money to put towards debt, or savings. Essentially you’re earning your Wastefully spent money back!

Every successful sale will help you chip away at your debt, or add to your savings. You may not be able to pay off all of your debt in this fashion, but it could potentially provide relief for times that debt seems like it might go unpaid.

Be vigilant with your debt! Having cash can burn a hole in your pocket if you aren’t careful. After selling items, head to the bank. Apply the money to any existing loans. Your future self will thank you!

Mrs. Moneyseed and I have been trying to sell pretty much everything we own that we don’t use or need on a regular basis. We’ve also been focusing on only buying things that we really need. It’s so important to us that any future purchases we make must pass an efficiency test: It must be high-quality, It must have the right price, It must stand the test of time.

We have two things that we’re going to put up for sale now: An e-reader and the most obnoxious, Wasteful coffee pot ever created (The Keurig). These are two items I just can’t justify keeping around. Since we are debt-free we can use the proceeds buy some Freedom.

You don’t have to be extreme and sell everything you own, but find the crap you honestly don’t need and turn it into cash.

I sold both items for the full asking price within two days of their listing. Just two days of e-mailing people back and forth just made us $130.00 and helped us get rid of items that were collecting dust.Update: I posted the Keurig and Kindle on Craiglist for $80 and $50 respectively.