best path to FI at 25 yrs old

[Samantha Prince]

Hey BP,

My husband and I are 25 years old. Just bought our first house back last year and on a clear path to purchasing our next by the end of this year/early next year.

We opened a Roth IRA but have yet to contribute. I just started a W2 job that will match 401(k) contributions up to 8%. My husband works as well but no 401(k) plan.

We also plan to start a family soon so I don’t know how long I will be working this job, I’d have to stay at least 3 years to keep 100% of contributions.

We are passionate about real estate and becoming FI by 35. We have clear goals and paths to achieve primarily through REI (focused on passive income). Our goal is to achieve FI as quickly as possible, not to work 9-5 until 60+.

As of right now, we feel it’s best to forgo my company’s 401(k) contributions and just focus on putting all of our money into rental properties right now. Especially because I’m not sure how long I’ll be working for the company.

Am I thinking through this the right way? Is there something I’m missing? I have yet to see how contributing to a 401(k) even with the employer contributions will help us achieve our ultimate goal faster.

I understand it’s “free money” however it’s tied up with in an account that we can’t access without penalty for ~40 years. And I have to contribute some of my own money to get that “free money”.

Let me know what you think! I’m open to any and all feedback. Thanks!

[Zachary Beach]

@Samantha Prince my wife and I reached FI a couple years ago in are early twenties through a mix of flipping Brrring STR's and LTR's. If you hate your job and don't get the match if you don't say 3 years it's not going to be worth it. That being said if you don't hate the job and stay 3 years that's a 6.4% raise (plus hopefully any gains) 8% match -10% for your part and the match in early withdraw penalties. The reason I say early withdraw is you want to FI at 35 than 401K is irrelevant and could actually slow that goal. You need to have a contingency fund and having a 401k that you can liquidate could help. Would you be able to stay 3 years then liquidate the 401K and use it as a down payment. I can't answer the question without knowing you and what your goals and disposition are. If it wasn't a 3 year vesting I would say do it and take it out as soon as it makes since to use it as down payment or you could use it as a contingent fund and only pull it out if you needed it and if you don't need it you get a good upside.