- Sep 8, 2014
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FIRE: Financial Independence, Retire Early
I'm 49 years old...so the "RE" part is kind of past me, but I do expect to be "able" to retire within a few years (but plan to work a little longer to save more). This is a good article about a 24 year old kid in the Chicago area pulling in $230K/year (from full-time job, a side lawn business, and real estate). Amazingly, he's making around $200K as a lineman at an electrical utility (w/ overtime and bonus). Good read:
24-year-old earns $230,000 a year working 3 jobs
24-year-old earns $230,000 a year working 3 jobs
Ask Alex Sanchez how many points the Dow is up or down on a given day, and the 24-year-old can give you an update that's just as good as if you tuned into CNBC.
The West Chicago resident is a bit finance obsessed. He watches YouTube videos on budgets and investing, tracks his net worth on a white board in his bedroom and aims to save more than $7,000 each month. In addition to his full-time job as an overhead lineman at an electric utility company in the Chicagoland area, he has two side hustles to help pad his savings account and investment portfolio.
Sanchez has big plans. He's a fan of the FIRE — financial independence, retire early — community, and he'd like to be a millionaire by 30.
But he's not just interested in his own financial future. As a first-generation American, he's also planning to help his parents, who immigrated from Mexico and met in the West Chicago area, retire comfortably one day.
"I have to give back to my parents, because they came here as immigrants to give us, their kids, a better life," Sanchez tells CNBC Make It. "I know all the sacrifice and pain that they went through, and I would stress it's my duty to give back to them."
Sanchez says he grew up lower middle class, and while his parents provided everything he and his brother, Oscar, could need, they also often missed events, like his baseball games, because they had to work.
Investing and saving a significant portion of his income has become a way for Sanchez to ensure that he has the flexibility to choose how he spends his time. Should he have children of his own one day, he doesn't want to miss out on Little League for work. And he wants to make sure his parents aren't tied to their jobs forever.
"I want, as fast as I possibly can, to tell them to quit their jobs and not worry about their bills, because I can handle their bills," he says. "Everything I do is pretty much for them."
What he earns
Sanchez's income fluctuates monthly, depending on the number of overtime hours he works at his day job, and how much business his lawn-care company drums up. He recently got a promotion at work that puts him at a base salary of $120,656. With a $10,000 annual bonus and all of the overtime he's accrued, he's on track to earn more than $200,000 this year.
Sanchez dropped out of college, so he does not have student loans. The utility company he works for paid for his training, and he often works Monday through Saturday, typically 60 hours per week, depending on the company's needs. If there is a storm or something else goes wrong with the utility wires, he's expected to be on call. He will also occasionally travel to help areas hit hard by storms or other emergencies.
It's physical work that Sanchez enjoys. Some days he's in the office, but most days he's out in the field, replacing conductors and installing new electrical lines.
"There's no better feeling than turning the lights on when everyone's relying on you," he says.
On top of his day job, he brings home an additional $3,100 per month, on average, from his side hustles. Sanchez runs his own lawn-care and snow-removal company, which grosses around $9,000 to $10,000 per month. After expenses, including taxes, salaries and other overhead, Sanchez earns around $1,500 per month, though it varies depending on the season.
Sanchez owns three rental properties, including an apartment, a condo and a single-family house that he co-owns with his mother. The properties gross $3,825 per month, and he takes home $1,600 per month, after expenses like taxes and insurance. His mother makes $500 from the property she co-owns with him.
With his side hustle income, Sanchez is on track to earn more than $230,000 this year. His goal is to keep growing that total each year, as he adds rental properties to his portfolio and moves up the ladder at work.
How he budgets
Here's a breakdown of everything Sanchez spends in a typical month.
Business expenses: $8,850
Depending on how many jobs he books, Sanchez spends around $7,100 each month to operate his lawn-care business. That includes salaries for his brother and one other employee, overhead expenses, taxes and insurance
He has paid off the mortgages on two of the three rental properties he owns (he paid in cash), while he put 20% down on the third. Including taxes, maintenance, insurance and the mortgage for his newest property, he spends $1,750 per month for his current real estate portfolio.
Saving up the cash to buy the first two properties outright was important to Sanchez. He paid $68,000 for the condo last fall, and split the cost of the $92,000 house with his mother earlier this year.
"I knew that if I was going to invest in real estate that I would need a lot of money," he says. "I took on side hustles, I worked as much overtime as I could at work and I just kept my expenses as low as I could."
Savings: $7,800
Sanchez aims to save $7,000 in cash each month, and contributes $800 to his 401(k). Right now he is prioritizing building up his liquid savings so he can buy more rental properties — his goal is to amass a portfolio of 20.
Plus, he's already thinking about the possibility of marriage and a family. Aiming for early retirement, he wants to save as much as possible now so that when he does have children, there's less pressure to save so much.
"I definitely try to save as much as I can," he says. "I wasn't raised with money, so I feel like that just pushes me, because I want to work harder to one day become wealthy."
Robinhood: $1,000
Sanchez is very interested in the stock market and eventually wants to start day trading. On top of his retirement account, he invests an additional $1,000 per month using Robinhood, an investment app. Right now, he has more than $17,000 in investments in the account.
"I was never really taught how to manage money. I just knew my mom saved money, and she would always tell me to save," he says. "Later, I realized that it has no point if you don't invest it."
Food: $400
Outside of his businesses, savings and investments, Sanchez tries to spend less than $1,500 per month on personal expenses, of which food is his largest spending category. He doesn't eat out often, though occasionally he and Rosy, his girlfriend of five years, will go into the city of Chicago to enjoy a date night, costing around $100 per month. He cooks most of his meals at home, spending around $300 per month on groceries.
Transportation: $295
Saving such a high percentage of his income allowed Sanchez to quickly pay off his 2011 Ford Edge, so he doesn't currently have a monthly loan payment. He spends around $200 in gas and $95 in tolls and maintenance.
Housing: $250
Sanchez lives with his mother and brother in the house where he grew up, and the mortgage is paid off. He covers utilities, including gas, hot water, electricity and trash service along with any maintenance issues. His brother pays for Wi-Fi. While his parents are separated, his father lives close by and visits Sanchez and his brother often.
Not every 24-year-old with a serious girlfriend would opt for this kind of living situation, but to Sanchez it makes perfect sense. He plans to live at home for a few more years, until he's comfortable with his financial progress. The savings is well worth any potential privacy issues, and he likes that he's able to help his mom out.
"I do plan on getting married and having kids, I'm just not in a rush," he says. "Maybe I'll have kids at 27, 28, but having three years of working, saving and investing will put me pretty far ahead, so I don't have to put in as many hours when I have kids."
'Fun' budget: $150
On top of the $100 restaurant budget, he allocates another $150 to "fun" each month. This money funds nights out with friends or other excursions with Rosy.
Sanchez makes a very conscious decision to not spend much on discretionary expenses. He says this goes back to one of the biggest lessons he's learned about money: It is easy to make, but hard to keep.
"Money to me represents your time. Every time I see a dollar, I see that dollar as my time, and time is the most important thing to me," he explains. "The reason I don't spend money on dumb things is because if I throw money away, I'm throwing my time, my life away — and it's just something I'm never going to get back."
His one recent splurge is a tattoo that he got in honor of one of his best friends, who died in 2018. Encompassing most of his left forearm, he has spent $500 on it so far, and it is about halfway completed.
"It's just something that means a lot to me," he says. "I'm not going to penny pinch on something that's really important to me."
Everything else:
(continued):
I'm 49 years old...so the "RE" part is kind of past me, but I do expect to be "able" to retire within a few years (but plan to work a little longer to save more). This is a good article about a 24 year old kid in the Chicago area pulling in $230K/year (from full-time job, a side lawn business, and real estate). Amazingly, he's making around $200K as a lineman at an electrical utility (w/ overtime and bonus). Good read:
24-year-old earns $230,000 a year working 3 jobs
24-year-old earns $230,000 a year working 3 jobs
Ask Alex Sanchez how many points the Dow is up or down on a given day, and the 24-year-old can give you an update that's just as good as if you tuned into CNBC.
The West Chicago resident is a bit finance obsessed. He watches YouTube videos on budgets and investing, tracks his net worth on a white board in his bedroom and aims to save more than $7,000 each month. In addition to his full-time job as an overhead lineman at an electric utility company in the Chicagoland area, he has two side hustles to help pad his savings account and investment portfolio.
Sanchez has big plans. He's a fan of the FIRE — financial independence, retire early — community, and he'd like to be a millionaire by 30.
But he's not just interested in his own financial future. As a first-generation American, he's also planning to help his parents, who immigrated from Mexico and met in the West Chicago area, retire comfortably one day.
"I have to give back to my parents, because they came here as immigrants to give us, their kids, a better life," Sanchez tells CNBC Make It. "I know all the sacrifice and pain that they went through, and I would stress it's my duty to give back to them."
Sanchez says he grew up lower middle class, and while his parents provided everything he and his brother, Oscar, could need, they also often missed events, like his baseball games, because they had to work.
Investing and saving a significant portion of his income has become a way for Sanchez to ensure that he has the flexibility to choose how he spends his time. Should he have children of his own one day, he doesn't want to miss out on Little League for work. And he wants to make sure his parents aren't tied to their jobs forever.
"I want, as fast as I possibly can, to tell them to quit their jobs and not worry about their bills, because I can handle their bills," he says. "Everything I do is pretty much for them."
What he earns
Sanchez's income fluctuates monthly, depending on the number of overtime hours he works at his day job, and how much business his lawn-care company drums up. He recently got a promotion at work that puts him at a base salary of $120,656. With a $10,000 annual bonus and all of the overtime he's accrued, he's on track to earn more than $200,000 this year.
Sanchez dropped out of college, so he does not have student loans. The utility company he works for paid for his training, and he often works Monday through Saturday, typically 60 hours per week, depending on the company's needs. If there is a storm or something else goes wrong with the utility wires, he's expected to be on call. He will also occasionally travel to help areas hit hard by storms or other emergencies.
It's physical work that Sanchez enjoys. Some days he's in the office, but most days he's out in the field, replacing conductors and installing new electrical lines.
"There's no better feeling than turning the lights on when everyone's relying on you," he says.
On top of his day job, he brings home an additional $3,100 per month, on average, from his side hustles. Sanchez runs his own lawn-care and snow-removal company, which grosses around $9,000 to $10,000 per month. After expenses, including taxes, salaries and other overhead, Sanchez earns around $1,500 per month, though it varies depending on the season.
Sanchez owns three rental properties, including an apartment, a condo and a single-family house that he co-owns with his mother. The properties gross $3,825 per month, and he takes home $1,600 per month, after expenses like taxes and insurance. His mother makes $500 from the property she co-owns with him.
With his side hustle income, Sanchez is on track to earn more than $230,000 this year. His goal is to keep growing that total each year, as he adds rental properties to his portfolio and moves up the ladder at work.
How he budgets
Here's a breakdown of everything Sanchez spends in a typical month.
Business expenses: $8,850
Depending on how many jobs he books, Sanchez spends around $7,100 each month to operate his lawn-care business. That includes salaries for his brother and one other employee, overhead expenses, taxes and insurance
He has paid off the mortgages on two of the three rental properties he owns (he paid in cash), while he put 20% down on the third. Including taxes, maintenance, insurance and the mortgage for his newest property, he spends $1,750 per month for his current real estate portfolio.
Saving up the cash to buy the first two properties outright was important to Sanchez. He paid $68,000 for the condo last fall, and split the cost of the $92,000 house with his mother earlier this year.
"I knew that if I was going to invest in real estate that I would need a lot of money," he says. "I took on side hustles, I worked as much overtime as I could at work and I just kept my expenses as low as I could."
Savings: $7,800
Sanchez aims to save $7,000 in cash each month, and contributes $800 to his 401(k). Right now he is prioritizing building up his liquid savings so he can buy more rental properties — his goal is to amass a portfolio of 20.
Plus, he's already thinking about the possibility of marriage and a family. Aiming for early retirement, he wants to save as much as possible now so that when he does have children, there's less pressure to save so much.
"I definitely try to save as much as I can," he says. "I wasn't raised with money, so I feel like that just pushes me, because I want to work harder to one day become wealthy."
Robinhood: $1,000
Sanchez is very interested in the stock market and eventually wants to start day trading. On top of his retirement account, he invests an additional $1,000 per month using Robinhood, an investment app. Right now, he has more than $17,000 in investments in the account.
"I was never really taught how to manage money. I just knew my mom saved money, and she would always tell me to save," he says. "Later, I realized that it has no point if you don't invest it."
Food: $400
Outside of his businesses, savings and investments, Sanchez tries to spend less than $1,500 per month on personal expenses, of which food is his largest spending category. He doesn't eat out often, though occasionally he and Rosy, his girlfriend of five years, will go into the city of Chicago to enjoy a date night, costing around $100 per month. He cooks most of his meals at home, spending around $300 per month on groceries.
Transportation: $295
Saving such a high percentage of his income allowed Sanchez to quickly pay off his 2011 Ford Edge, so he doesn't currently have a monthly loan payment. He spends around $200 in gas and $95 in tolls and maintenance.
Housing: $250
Sanchez lives with his mother and brother in the house where he grew up, and the mortgage is paid off. He covers utilities, including gas, hot water, electricity and trash service along with any maintenance issues. His brother pays for Wi-Fi. While his parents are separated, his father lives close by and visits Sanchez and his brother often.
Not every 24-year-old with a serious girlfriend would opt for this kind of living situation, but to Sanchez it makes perfect sense. He plans to live at home for a few more years, until he's comfortable with his financial progress. The savings is well worth any potential privacy issues, and he likes that he's able to help his mom out.
"I do plan on getting married and having kids, I'm just not in a rush," he says. "Maybe I'll have kids at 27, 28, but having three years of working, saving and investing will put me pretty far ahead, so I don't have to put in as many hours when I have kids."
'Fun' budget: $150
On top of the $100 restaurant budget, he allocates another $150 to "fun" each month. This money funds nights out with friends or other excursions with Rosy.
Sanchez makes a very conscious decision to not spend much on discretionary expenses. He says this goes back to one of the biggest lessons he's learned about money: It is easy to make, but hard to keep.
"Money to me represents your time. Every time I see a dollar, I see that dollar as my time, and time is the most important thing to me," he explains. "The reason I don't spend money on dumb things is because if I throw money away, I'm throwing my time, my life away — and it's just something I'm never going to get back."
His one recent splurge is a tattoo that he got in honor of one of his best friends, who died in 2018. Encompassing most of his left forearm, he has spent $500 on it so far, and it is about halfway completed.
"It's just something that means a lot to me," he says. "I'm not going to penny pinch on something that's really important to me."
Everything else:
- Insurance: $208 (includes health, dental, vision and car insurance)
- Travel: $100
- Subscription services: $103 (includes gym membership, Audible, Netflix and video software)
- Pets: $30 (includes food and toys for his dogs, Bella and CiCi)
(continued):