FI in 10 years

[DutchGirl]

What is funny is that I'm looking to retire at about 50 and I feel I'm unique. So few people appear to be into this lifestyle.

I sure don't meet a lot of early retired people either, here in the Netherlands. However, that could also be because I'm moving in the wrong circles: I'm meeting people at my work, so they most often are working, too. Thinking over the last five years or so, I think I know some people who are financially independent but who then have decided to put their time in things like charities, creating a business, pursuing a hobby with all their heart, etc. So they don't present themselves as "hello, I'm X and I'm retired", but as "hello, I'm X, and I'm working on Y project, could you help me with Z... ".

You're making great progress, well done! So the mortgage could be done by next year? That will sure free up some income for other goals and end some of your worries...

[steveo73]

Thanks DutchGirl. Paying off the mortgage is like step 1 or to me reaching the base of the mountain. There is still plenty more time to go to get to FI however once the mortgage is paid off I think we can push forward relatively quickly.

[Hankaroundtheworld]

Just read your blog. 50 is a great age for ERM, basically my target as well (next year is D-day). With that age, you still have a life ahead with plenty of opportunities to explore more of it, broaden your skills, feel the peace of being FI, focus on your kids, etc...(and playing chess what I have read of you ). Regarding the house, that is a nice "bonus" once your kids have left the house, then you could choose for a different lifestyle, and cash-in some of that value, and make it work for you. All in all, a very rosy perspective, part of the 2% of the world (although not important, happiness is, but good to realize how fortunate you are)

[steveo73]

Hank - thanks for your comments. It is good to realize how lucky we are. The house does like you state also provide a buffer.

It will be interesting how I invest over the next 8-10 years and how I manage retirement. My thoughts at this point are a predominantly sock based portfolio with some buffer in the form of cash, maybe bonds and maybe some commodities. There is no way I am putting a cent into housing as I already have a massive housing portfolio by owning my house. When it comes to managing retirement I think I may slowly move towards retirement and work less days per week rather than just quit outright.

[steveo73]

2 weeks off work over Christmas is great.

Every time I get a break we don't go on overseas holidays and as my wife said then other day our holiday spending is like the normal average family weekend spending. We actually increase our spending a little because we might buy take away food and go out for the day. We may even go out for Yum Cha as well. We might drive to the beach. The typical day though is doing some light exercise in the form of a bike ride or a walk and then eating a nice dinner and watching some TV.

Every time I do this I realize how little I need to spend to be happy.

It'll be back to work not next week but the week after however I have to try and enjoy it as much as possible and think of it as counting down the time to being FI and being able to quit work.

[Geetar28]

Super:- 225k.
Mortgage:- $90k.
Emergency fund:- 5k

So dumb question here...if you have 5k in emergency fund..How much do you keep roughly in cash accounts (checking say) for paying monthly bills? Also, is the 200k Super is that in a 401k type account or IRA or what is that? Thanks.

[steveo73]

I'm Australian so I think Super is the US version of a 401k. You can't touch that money until you are 55 at a minimum but its more like 65 and they will raise that limit. I don't really care about that though because I intend to have enough money to last for at least 50 years. So I don't really care if I can't touch that until I'm 65 or even 70.

We don't have a set amount in our the Emergency Fund. We just put $50 per pay (which is per fortnight) into there. I don't count this as part of my savings as I expect it to be spent and refreshed over time. The emergency fund is completely cash. We don't really use it for monthly bills. We pay our bills out of our fortnightly wage.

My daughter needs a laptop for school and braces. I expect that this year we will spend all of that emergency funds on bills like that.

[steveo73]

I just bought a laptop today. It cost $1066 and I think that was a decent deal. The school gives out specifications that are probably ridiculous however it means we had to buy something at about that price unless we got it 2nd hand and I honestly couldn't see much on Ebay that would match the supposed requirements. My wife was budgeting for $400 and is spewing.

Add to that over the next 2 year we are going to be paying $5k for braces.

I should also reiterate that we have 3 freaken kids.

[m741]

I suppose it's too late now, but you should question what the school is recommending. In particular - what will your kids be doing with the laptop?

Video editing or photoshop? Enterprise-level software development? Probably worth springing for the recommended laptop. Researching on wikipedia and writing some papers? A chromebook or cheap laptop is probably plenty (I spent $300 on a budget laptop 2 years ago, no need to upgrade). I suspect that schools will recommend high-spec systems because it's less work for them; also because teachers may be more familiar with Apple, or some people just like Apple better.

In particular, system specs in laptops haven't improved signficiantly for 95% of non-gamers in years. That's because laptops 2 years ago already did everything that most people need. Battery life and weight are improving gradually, but those are comfort factors and not a game-changer.

[DutchGirl]

Hmm, steveo93 might still be able to return the laptop? Often there's something like a 2-week-no-questions-asked return policy... ?

[steveo73]

I agree with the 2 posts above. Its stupid. I'm not going to do anything about it though. I'm just going to put my head in the sand and recognize that I'm a stupid bastard.

I use desktops at home and we have Linux on them. We just bought a brand new computer for home and it cost $400 and it is kicking ass.

My daughter is 13. These costs are going to start to disappear or at least I keep telling myself that.

[steveo73]

I just fixed a toilet that was running all the time today. It was actually difficult. Changed the inflow and outflow valves but I also had to change the pipe connector from the inflow valve to the tap. It cost about $50 but I had to buy 2 wrenches as well.

I really like doing stuff like this though because I figure its a skill that I have learned and something that I achieved. It also saves a lot of money. There is no way a plumber would have been that cheap.

[steveo73]

I figure now is as good a time as any to list down my goals for the year.

I should state though that we are basically on autopilot now. Stuff gets bought and money gets spent but its not over the top and it doesn't really require too much thinking or self-discipline.

1. Save at about 70% or more of our income. We reached 75% last year however I think we will spend more money this year and I doubt I will get the same bonus.
2. Diet better. I really see this as a key. I'm not fat however I'd like to lose 5 kgs (10 pounds).
3. Exercise better. I do jiu-jitsu and its tough and a great exercise but I think I really want to exercise in a less intense fashion. I basically want to take it easy. So do jiu-jitsu about 3 times per week but also spend more time stretching and recovering.
4. Read plenty of good books.
5. Play chess and try do be more disciplined when I play. I find I blunder too much and it makes me freaken scream.

If I get these aspects right I figure the mortgage will be close to paid off by the end of the year and then we can really start building our FI assets.

I don't really have anything excessive listed down and I don't really see too much behavioral change apart from eating a little less and a bit better quality more consistently as well as moderating the alcohol intake. I realize that most of my FI goals are not really financial but I feel that moving towards FI will just happen and other stuff particularly my health is just as important.

[steveo73]

I should talk about work. I really quite like my job. The pay is decent and I get a lot of flexibility. I work with good people and have a great manager.

In stating that I really don't like going to work. I'd just rather do other things.

[andystkilda]

Steveo have you considered moving to a cheaper residence - perhaps further out from the city? - especially if you can downsize to less bedrooms in the future as the kids leave home.

I know this would be a significant (perhaps unworkable) disruption to your wife/kids but it could potentially free up a lot of capital to add to your retirement/savings funds.

[steveo73]

Steveo have you considered moving to a cheaper residence - perhaps further out from the city? - especially if you can downsize to less bedrooms in the future as the kids leave home.

I know this would be a significant (perhaps unworkable) disruption to your wife/kids but it could potentially free up a lot of capital to add to your retirement/savings funds.

Its an option post FIRE but not at this point. I can walk to work but typically ride my bike. The area that I live in is in my opinion fantastic in that there are so many bike tracks and parks so it means there is heaps of free outdoor activities for us. The kids are settled.

My lifestyle now is great and I don't think it makes any real sense to move. So we could have less of our assets tied up in our property but it would come with the downside of traveling further for work and possibly moving to an area that we don't want to retire in.

I view our house as providing a back-up post FIRE as well. If something goes against us we have buffer in selling the house.

Other people have mentioned this and it is an option but I don't think its an option that is worth taking at this point.

[steveo73]

I just fixed one of the toilet seats in my house. This was just so easy but its something years ago I probably wouldn't have done.

I also went to a funeral today for a guy I used to work with. He was probably about my age (early 40's) and was working last year up too about July/August on a project with me. He left work a month or so later on sick leave and now he is dead. I have no idea what he died of. I assume cancer but I honestly don't know. It makes me realize how short life can be and how unimportant work really is.

[steveo73]

I'm not sure how the rest of you feel but for those not retired do you get moments of absolute longing to retire.

I have a yearning to retire right now. I know that it will pass and come again. I suppose that it is part of the journey. My wife would say suck it up and keep going.

[leeholsen]

good journal. i re-read it every now and then as we are on about the same 10 year plan; you'll get there a year sooner than me because you found ere a year sooner.

I have a yearning to retire right now. I know that it will pass and come again. I suppose that it is part of the journey. My wife would say suck it up and keep going.

i have this bad this year, i keep looking at expenses over and over again to see if i'd be willing to cut some to be able to retire sooner. i'm sure it'll pass in the next few months too, but its a real grind now.

[steveo73]

good journal. i re-read it every now and then as we are on about the same 10 year plan; you'll get there a year sooner than me because you found ere a year sooner.

Thats good. We can race towards it. I'll be jealous if you get there first but cool with it.

i have this bad this year, i keep looking at expenses over and over again to see if i'd be willing to cut some to be able to retire sooner. i'm sure it'll pass in the next few months too, but its a real grind now.

I just get sick of work. I manage projects and I don't really care about it especially the intensity of it. I can handle it but I get sick of handling it. You are right in that it is just a grind. To add to that I don't want a lot of stuff. Its more about paying off my house and making sure the kids are alright.