Immigrant Money Story: Can He Still Retire Early?

Added: 2026-05-16

[00:00:00]Today we have AJ with us and AJ is not his real name because he want to stay anonymous. Welcome AJ. Thank you.

[00:00:06]>> To the show. Thank you Susan. You're very welcome. We call it real money real people and you are pretty much the first guest. So what brings you here today?

[00:00:13]Yeah, like I've been following your content and then you know like I'm really resonates with some of the things which you discuss in your video.

[00:00:23]And like I also you know work getting for like last 16 years now.

[00:00:28]And at certain point in time like in five years from the line I'm also looking to hit the fire number as they say it which keeps on changing correct? All right, that sounds good.

[00:00:39]All right, I think let's stop guessing and let's start looking into your numbers right away so that yeah, we know what the ground reality is. Before we get into that just wanted to give a quick disclaimer that this conversation is for educational and entertainment purpose only. We are discussing general financial concepts here not giving any financial tax or legal or investment advice and AJ is sharing only what he is comfortable sharing so nothing here should be taken as a specific recommendation for any of you viewers. So yeah, this is just for entertainment and education. And said that let's jump on to the numbers. Yeah, it's 37.

[00:01:16]Okay.

[00:01:16]How many years have you been in the US?

[00:01:19]It's 12.

[00:01:22]Okay.

[00:01:23]Mind sharing your your experience anything about your family whatever you feel comfortable about. Yeah, so like we like from the career standpoint like I have like 16 years of experience married have one child.

[00:01:36]We both are working both work for in in IT space.

[00:01:41]And have five year old child going to school.

[00:01:46]And basically you know I'm juggling with between different responsibilities at this age.

[00:01:52]Yeah.

[00:01:53]How about the gross income?

[00:01:55]So we sit around like before taxes are around 300k like as a family.

[00:02:03]Okay. So, I have put in you don't have to disclose where what your location is, but I'm assuming around 30% tax rate that's and with that around 300k gross income so take home is around 210 which brings in around $18,000 per month. Would that be fair?

[00:02:20]Yeah, that sounds about right, yeah.

[00:02:23]Okay. How about your monthly expenses?

[00:02:26]Uh my monthly expenses are around I would say that around 10 10,000 including the home mortgage.

[00:02:34]Okay. So, 10,000 is comes down to it is around 57% of your take home pay become earning if it is above 70%. So, so far it sounds good. What are the biggest buckets here in uh in your $10,000 expenses? I would say like mostly around the home mortgage. Like I I took like 15-year fixed because I just want to pay as much as possible. So, I pay around 4k before you know move that money towards the mortgage.

[00:03:06]Okay. Any other fixed cost bigger fixed cost you would like to add here? 4k is home and what would be the other two?

[00:03:13]It's mostly like groceries and restaurants travel and then like like health insurance for my kid which I usually take from outside. I work as a more like a consultant so I feel like you know getting a insurance from outside is much more feasible for me for my kid. So, that comes down to around $2,500 to $3,000 bucket.

[00:03:41]Three Okay, $3,000 insurance and this is for kids insurance. You said? It's basically my kids insurance her extracurricular activities, groceries uh, utilities, everything. That's 7,000.

[00:03:55]And then And I spend like around $1,000 for my parents, uh, back in India.

[00:04:01]Okay, where, you know, like Uh, I I just send them like maybe not every month, but, uh, every now and then, which comes down to around 12,000 a year.

[00:04:13]Okay. Yeah. So, this is 4 5 6 7 8 and maybe one or two on eating out and Correct. One or two One or two like 1K on eating out, going out, maybe small vacations, and then one for uh, basically the the school taxes or the property taxes which I mentioned which I pay when the bill comes, but I need to keep that money aside.

[00:04:41]Okay. So, I'll say 1.5 maybe fun and that's kind of account for all 10,000.

[00:04:46]>> That is right, yes. Yeah. Saving and investment, do you want to Sure.

[00:04:50]You want to elaborate on it? So, we kind of max out our 401k, our respective 401k's, which is like 23K 2300 23,500 a year, which comes down to 47 uh, K for both of us.

[00:05:06]And, uh, we do recurring ETFs like around 500 each, so $1,000 per week, which is like another 4,000 >> $1,000 per week? Yeah.

[00:05:17]So, that's 4,000 Correct. a month?

[00:05:21]>> Yeah. So, it's like 4,800 Sorry, 48,000 per per year for our recurring ETFs, and then 40 47,000 for 401k, so around 95K in savings. So, $8,000, around 8 to 9,000 is going towards investments. Yes, John. Yeah, like that's what we like This is uh, from last couple of years. I'll just keep it nine.

[00:05:48]So, this is what almost Uh yeah, close to 48 49% I would guess.

[00:05:55]So, this is good man. I mean, not many people invest that much amount, right?

[00:06:00]Okay, let's come to your assets.

[00:06:03]Uh Let's talk about the cash you have in hand.

[00:06:07]Uh So, from the cash standpoint, I would say like uh we do have around um 150.

[00:06:15]Uh which which is in our actual uh investment account. So, is this all 150 your dry powder for opportunities or does this include your emergency fund as well? Uh so, out of this like 50's our emergency fund. We just play uh with 100K.

[00:06:33]Uh So, 50 like we do not touch, but we still keep it in our uh money market account so that we can at least try to beat inflation uh if nothing more than that.

[00:06:45]Okay. Yeah, I think with a kid, I mean, a married person with a kid uh both have steady jobs. Someone in your situation I feel uh would have 6 months of emergency fund and 6 months means your living expenses. Mhm. And he'll not touch for anything else. Got it. That is true emergency. So, it's Yeah, that's what That's what I go by. Okay. Sure.

[00:07:05]>> I think you're close to that, right?

[00:07:07]Yeah.

[00:07:08]How about brokerage account? The taxable brokerage account. Uh our taxable brokerage account like if I'll remove this 150K, we sit it around uh I would say around 200.

[00:07:22]Okay. Yeah. How about 401K?

[00:07:25]401K is around uh 360 360 to 380. That's amazing. That's good number.

[00:07:32]And last one is equity in the house. Uh equity is 150.

[00:07:38]If you add all this up all your assets how much is it? 710.

[00:07:44]Yeah. So, that is your liquid net worth.

[00:07:48]Mhm.

[00:07:48]>> Okay. And if you add house equity to that, uh that comes to 860. Right? So, you know, I mean, sometimes there is a big difference between being behind and being feeling behind. And your your numbers may be growing, but sometimes when you compare that growth with Tesla, Nvidia, and crypto, you know, your your growth feels small in front of all this.

[00:08:11]So, when you send the initial application, did you uh do you think that is happening to you?

[00:08:17]Do you feel like because of that kind of growth you felt a little behind or missed the boat? Uh >> What do you think?

[00:08:23]>> Basically, what what what what my biggest uh concern uh is and like right now in the market is like specially uh as I mentioned like my ESVP is from the IT software uh giants. With the with the assumption that, you know, the the stock market is going to go up. Uh which eventually might go up, but now I start questioning that fact specially when, you know, it's a paradigm shift when everybody is talking about uh you know, going to space and you know, setting up uh you know, new new colonies in in around the earth and then all those things. I see that the money is flowing towards hardware, towards uh AI, towards uh you know, memory or photonics or all those space-related stocks where the software at least in short term taking a hit. And I would have diversified better because I read a lot. I spend a lot of my uh free time in in analyzing what's happening in the in in in the market and where the money where the big money is flowing.

[00:09:28]So, uh specially like last month also like I was having a good opportunity to diversify it, but uh like uh I I couldn't, uh, because now I'm sitting below my average cost on on those ESPP.

[00:09:44]Like after accumulating all those money in like 10 years, uh, it's it's it's the same like sort of the Intel story. I was reading it somewhere that if I would have invested 10,000 in in Intel like in 2000 or 2001, it would have given me 10,700 now when they increase by like 10%. So, >> [laughter] >> so >> Well, that that stories are always there, man. It's it's hard to kind of pinpoint, pick one stock, and stay with it for longer, right? You know, I mean, take Amazon for example. I remember, I mean, I don't remember, but I have, uh, read this case study. In June 1997, it was 7 cents.

[00:10:22]>> Mhm. By December 1999, it was $4.5. That is 65x. Correct. You'd call someone really smart if someone could have bought it at 7 and held it till 4.5, $4.5. But in 3-4 years, the dot-com bust happened. It lost 95% of its value.

[00:10:38]>> Mhm. And it 10 years for it to recover back at $4.5 by 2009 and 10. And now it is at 250. Correct.

[00:10:46]>> So, who would you call a genius in this entire journey? Who held at held from 7 cents till now? Or I mean, I would feel I am a genius if I sold it at $3. But in hindsight, it feels like, "Oh man, I missed the boat." Correct.

[00:11:00]>> regret will always be there, and you cannot hedge that 100% more. Even if you pinpoint and find the exact perfect stock, what is the what kind of timing you have to follow, right? You When when do you buy? When do you sell? How much of your portfolio you allocate to one stock? But those all of those questions will always be there, and there will always be regret if someone wants to. I feel like a better approach is diversify and look at your freedom number. That's what I go for.

[00:11:26]>> Mhm.

[00:11:27]That's what I have always believed in.

[00:11:29]So, having said that, I know you have mentioned that you want to uh, figure out if you are on track and about retirement. Correct. Yeah, we are Correct. So, we can run Do you mind if we crunch a few numbers and we can show you someone in your shoes what kind of number they will be looking at and then this is not like exactly your numbers, but this will kind of give us a directional clarity of what what we are looking at. So, let me quickly share this.

[00:11:55]Yeah, before chasing a big home run, I guess we just need to see how the steady progress look like. Okay. Yeah.

[00:12:03]I think let's let's crunch these numbers because again the portfolio is it for freedom or is it for excitement? You know, I feel when we sit at the coffee table in our office, talk to people, it is more about excitement than the freedom. That's where it it it all those doubts come in.

[00:12:20]Hey, I bought something at $2, sold it at 10. Hey, I missed that. You know, and that that that brings you down a little bit then you question your thing. So, I always believe like, what is your long-term goal? What is the long-term plan? And if you are on track, why the heck we should worry about anybody [laughter] else, right? And then that's how I So, I said that, let's start putting a few numbers here. Let's crunch some numbers and see where we go. So, your current age is 37. If you want to retire early, what would that age be?

[00:12:47]Uh so, I was thinking like, you know, yeah, yeah. I was thinking at around like maybe like 10 years, like 46, 47 is what I'm thinking.

[00:12:58]Uh of co- of course like this is more like, you know, having less dependency on having an employer. Like, you know, when if I have an employer, like well and good, like I'm not looking to spend my time on a beach day in day out. I I still love to work. I I love my job, but uh I don't want to have that dependency.

[00:13:17]Yeah. Yeah, it's more like financial independence where work could be optional where you are not just working for money. And if you want to go 3 months in Spain, you would should be able to do it without worrying about money, without worrying about employ employment, and come back and do whatever you want. So, we are looking for that kind of number here and that right? Yes. Yeah. Current balance you said you have around 700.

[00:13:40]700,000.

[00:13:42]Yeah. So, and monthly contribution you guys are already putting a lot of money in. Uh how much do you want me to put in here? Your Someone in your situation, I mean, not a lot of people are able to put in four or five thousand. You guys are doing much, much more than that.

[00:14:00]>> Oh, okay. What would you feel comfortable putting monthly here? Just for this example. Like the same amount of money which we are putting right now.

[00:14:07]Uh Eight. Yeah.

[00:14:09]$8,000.

[00:14:11]And here, I don't again, I don't want to go into much details, but this is how I wouldn't uh my portfolio together. Put a little bit in fixed return, which you already have. Very minimal at the age where uh we are working. Just 5% then I have something called foundational ETFs where again, I'm ETF guy, something like total US stock market, broader market, which which is not very aggressive, but gives 10% ish return. I'll put my 30% there.

[00:14:37]I'll put the next 30% in dividend producing ETFs. Again, as you see the expected returns is not much. It's 10, 11% and growth ETFs. So, cumulative average for that comes to around 15%. If someone No, 11%. That's the tax. So, 11% is Does it sound reasonable? Is it too aggressive, too low? Uh Low is better. I don't want to Correct.

[00:15:00]Yeah, I would say like like of course like historically like we have seen like 12%, 13%, but on average I have seen like 10% is more reasonable.

[00:15:11]Especially like you know, uh at at certain point in time like uh when your when your portfolio becomes big, uh you you start going towards the stability more because you do not want to lose that money.

[00:15:26]So, that is the exact idea behind building this because my god. So, this is This is when you are working, but once you retire the allocation becomes different. Then I'm putting in that your or someone in similar situation who is running this numbers, they will get average return of around 8%. We are not even 10%. I'm trying to be super kind of low ball it.

[00:15:55]So, during working years you'll get somebody will get 10% and then during retirement it is 8% and the just this numbers if we run this analysis what Oh, I put 700. It should be 700,000. So, if someone runs this numbers, what it says is at the age of 37 you're starting with 700,000. You're putting your 96k each year and your ending balance for first year is 868 and then you want to retire at the age of 47, they will have around 3 and 1/2 million dollars if if if the market continues giving that 10 10 and 1/2 ish percent and they will have 3.7 ish million and then out of that 3.7 the Oh, this one.

[00:16:40]What will be your retirement spending because that's what will derive your freedom number. It all depends on that. So, Yeah, like uh I would say like by that time like my house will be paid off.

[00:16:56]So, I'll just be paying the taxes like maybe thousand fifteen hundred dollars.

[00:17:00]So, the the the 4,000 which we put initially, I think that will be reduced to like thousand dollars.

[00:17:09]Uh So, that's the only thing which which I can think of. Apart from that I think the expenses will remain more or less same maybe a little higher because the kid will grow by then.

[00:17:20]So, should we keep 10,000 then? Yeah. Or I would say like I would say 8,000 considering the house is already paid off, so And you do plan to do that in next 10 years?

[00:17:31]Uh Yeah.

[00:17:33]>> I I think so. Like I already took like 15 years fixed uh rate to start with. And we try to do like one additional payment uh every year. Like we basically instead of 12 13 payments a year.

[00:17:45]Uh >> That's wonderful. So, I think like that will reduce the term by from 15 to I I don't remember 11 or 12 years. Yeah, yeah, yeah. I I did the same thing, man.

[00:17:55]I I did 13th payment. I did extra payments. I when I I got bonus, I threw into it. So, wherever I could because that gave me peace of mind. I know financially it probably doesn't make sense and people will call me out, but hey, gives me peace of mind.

[00:18:11]>> Correct. Correct. Correct. So, okay, we are putting 8,000 here and with that again by the age of 47 someone will have 3.5 3.6-ish million and that uh 8,000 per year is 12 * 8 is 96. So, 96, but we are putting 3% inflation here. So, inflation adjusted 96,000 becomes $129,000 10 years down the road. So, again, you need that 129 every year and I have put in here kids' education as well. Okay.

[00:18:41]So, because I was doing it for my kid, right? So, uh right now I would say 25 30,000 $30,000 per year is a decent amount. I think. Of course, there are Harvard and Stanfords where you will go 80,000 100,000. Sky's the limit for that. But inflation adjusted I have put in 51,000.

[00:19:00]Okay, 51,000 per year and this is from somebody else.

[00:19:05]And somebody can change these numbers and do whatever they want. And then if they want they can add their social securities here and all that. but let's keep it simple. Let's not go too complicated.

[00:19:14]>> Sure, sure.

[00:19:15]So, yeah. I mean, with this, the money it looks like the money keeps growing because it is growing by 8% and your withdrawal rate is less than 8%. So, the money keeps growing and you are basically or someone with this number, it sounds like financial independence. Do you see any gap here? Am I overestimating anything?

[00:19:36]And what do you think about the numbers here?

[00:19:39]Uh Yeah, like I think from the diversification standpoint, you have put in in the right buckets. Like I think that's how I imagined when I have uh more corpus. And I think that's how my current portfolio also looks like where it's ETF heavy.

[00:19:58]Overall, it looks good until unless like you know, like right now of course like we have one kid, but you never know. So, that one in time like things can change a bit.

[00:20:09]What do you have for now?

[00:20:10]>> you think it will change that much with two kids?

[00:20:13]Of course, the daycare expenses will increase and then there's college education.

[00:20:18]But uh do you feel comfortable with these numbers? And if you see these numbers, do you still feel like we need to do something dramatic, something miraculous, or just give it time and the way it is going is fine?

[00:20:32]Uh I think so. Like the way it is going is fine. At least on on the paper it looks like that. But but I wanted to discuss from like I think you already answered some of the questions which I was having in my mind specially around ESPP as you mentioned that you know, like I think the right approach would be to stay invested.

[00:20:51]The only thing is that you know, I would have diversified a little more so that I'm not heavily relying on one or two companies doing good, but instead if that money would be in ETF then like with with a current recent conflict happening, S&P 500 was just like 9 to 10% down compared to some of the stocks dropping like 40% that too big names.

[00:21:12]So I think that's one of the key points which you know, I need to delve more into that you know, when I'll grow my portfolio or you know, from the number standpoint then I need to be fully diversified and not like I think more than 5% I should not have in any of the big stocks and just just have a good diversification that way.

[00:21:35]I think you're you're thinking on the right right structure. You know, a common framework many people use the strong long-term core and with a smaller bucket for high conviction ideas and I think that will do more good than bad for most of the people and I think you are on the right track. Yeah, thank you. Yeah.

[00:21:53]Right. That gives me the confidence that you know, I'm I'm not alone thinking and then you know, other people are just minting money in the market.

[00:22:02]>> [laughter] >> That's like that way and that crypto bros telling you big stories that I earn this much and that much. Yeah, sometimes if you are watching too much media, I mean yeah, it can influence you and if you're surrounded by some people telling you those stories Yeah. Yeah. You can get influenced but you know, I have been following I have been looking at crypto as well. I mean 2011 it fell 93% in 2015 it fell 85% the next bull or bear 84% then in 2022 again what was it 75ish percent so Yeah, I'm I am sure a lot of people made money but one or two or three people made money but where are they making this money from? They're taking it from somewhere else and the rest of the 98% 99% of the people are losing yeah, crap load of money in that right? So that that's what is happening. So the crying nobody's coming online and crying the only winning people are coming here and sharing all that so I don't think we are we are getting the correct information.

[00:23:03]So, I don't think we should be going for those kind of things.

[00:23:06]>> Yeah. I think in general you're doing good. You're ahead of the curve if we compare to the entire US market. If you look very specific to desi desi desi pockets, then man, you know, everyone has money and everyone is earning a lot of money and everyone is trying to reach in multiple million dollars.

[00:23:25]That's where it is. So, the Correct. Who we are comparing, who we are who we are hanging out, that matters a lot, too.

[00:23:30]So, I think in general you're doing fine and as we as we saw in the calculations, just with decent 10 11% if you keep investing the way you are doing, Mhm.

[00:23:41]So, you have any anything which I need to work on? Like I need to When I say uh uh like based on my story, uh any top two or top three where, you know, you think like, you know, I can focus more or, you know, study more on those fronts?

[00:24:00]I think consistency is the key. Time in the market will matter than timing. We don't want to time anything. Just keep the consistency. Consistency is the biggest thing in compounding. Whether in money, whether in content creation, whether in creating uh making your six-pack abs, Mhm. that is the most important thing. Reading more about your six-pack app is not going to give you that. It it is more about everyday doing the same routine boring thing and I I believe in money it is again the same thing. So, I don't think you need to over explore this as long as your portfolio is diversified. I I won't do anything differently. I mean, that's that wouldn't be my goal. I Again, I don't want excitement here. I'll I'll I'll have my All my excitement in uh pickleball court and uh Nice steel or whatever else you do. I'll have all my excitement there. I don't want to sweat with market falling and wiping off my portfolio because if you take some big bets on something convincing and if it falls by 50% 60% and if you have 20 30% in one stock then what? Yeah.

[00:24:59]>> Then what is the guarantee it will come back? Do we have the mental strength to withstand all of that with with the family and with the kids?

[00:25:07]Correct.

[00:25:07]>> want to go through all of that. That's not me. So Yeah. Yeah. Everyone has their own risk appetite.

[00:25:12]Yeah. Yeah. Yeah. Looking for freedom.

[00:25:15]That's that's the main thing.

[00:25:17]Thank you. Thank you, Sushant, for, you know, spending these 45 minutes with me.

[00:25:21]And it was really helpful and it gives me that peace of mind. Thank you. Okay.

[00:25:26]All right.

[00:25:27]Bye-bye. Bye.