Advice on leanFIRE

Based on your situation, you’re in a good place for leanFIRE, especially for your age. Here’s a tailored approach to build towards financial independence while balancing your career and business goals:

  1. Continue Building Retirement Accounts: You’re already doing well with retirement contributions, and maxing out your Roth IRA is a great tax-advantaged strategy. Since you plan to open a 401(k) through your future business, aim to contribute there as well once it’s available, as it will allow you to save even more on taxes and grow your investments.

  2. Evaluate Cash Flow for Law School: Law school is a significant investment. Consider federal student loans, as they can offer income-based repayment options. Meanwhile, look into law schools with strong financial aid programs or public schools that might help reduce costs. Keeping student debt manageable will make it easier to focus on FIRE.

  3. Reassess the 5-Year CD: Given the low rate, this CD isn’t maximizing your money’s potential. While you’d incur a penalty for breaking it early, it might be worth comparing if the lost interest could be offset by placing the funds in higher-yield options like Treasury bills or CDs with better rates. At a minimum, when it matures in 2027, you’ll have more flexibility for reallocation.

  4. Focus on Diversified Investments: Continue monthly contributions to your Fidelity account in diversified ETFs like VOO and QQQ, as these provide broad exposure to equities. Consider adding a small allocation to bonds or REITs for balance, especially if markets become volatile during your leanFIRE journey.

  5. Utilize LeanFIRE Savings Goals: Set a specific leanFIRE goal based on your projected expenses. Since NYC is a high-cost area, consider whether you might relocate in the future to stretch your savings. In the meantime, track your progress with a net worth calculator or app that helps you visualize your target number.

  6. Saving for a Condo: Property prices are high, but if homeownership is important, explore first-time homebuyer programs, especially after law school when your earning potential increases. Until then, continue keeping funds in secure, liquid options like your iBond, which is safe and currently outpacing inflation.

For leanFIRE, keep your lifestyle modest, build a sustainable savings and investment strategy, and focus on debt management. Starting a 401(k) through your business will also be a tax-efficient way to save.