Lucky C's Journal

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Lucky C
Posts: 146
Joined: Sat Apr 16, 2016 6:09 am

Lucky C's Journal

Post by Lucky C » Sat Mar 18, 2017 6:06 am

Hi everyone, time to start a journal! My wife and I just bought a house so I should have some interesting things to write about on a regular basis, rather than just grinding away at work. First though let me get the basic financial background out of the way:

I'm 31, DW is 27. We have both lived in New England all our lives. Our current biggest sources of income are designing electronic stuff (me) and managing grocery store stuff (her).

Our house is paid for in cash. The current market value is about $250k.
March 2017 assets (not counting home value): $392k
Cash flow: about $8k/month

I don't have a single FI number. My handy spreadsheet says that we could manage with $432k minimum, but that's making some assumptions that may not hold in the future. At the other extreme, I estimate based on a conservative (high) budget and a 3% withdrawal rate, we would be totally safe with about $750k. So those are a broad range of values, placing our FI date anywhere from a few months to a few years away. Neither extreme is very likely, but I think it's important to consider possible scenarios like this since nothing ever works out exactly according to your plans. Planning out a minimal budget to see how quickly you could potentially quit is exciting, but it's also important to see how much you could possibly be working in case you end up wanting a higher budget, lower withdrawal rate, etc.

It's likely we would not fall short even with the minimal $432k budget, but I would be motivated to get other income streams going as quickly as possible for extra safety margin. We are both considered hard workers so that should be achievable, but it would still pose its challenges. The other extreme of $750k would almost be too easy, and we'd likely end up with "too much" money and could regret working those extra couple of years just to be able to be lazier in early retirement.

Realistically I will be at my current job another 1.3 years minimum, since that's how long I have to stay there for full retirement account vestment. That should put us around the $530k mark. We could probably keep our budget around $20k initially for a 3.8% withdrawal rate, and that would be enough to have some fun money considering we have no mortgage, taxes are pretty low, etc. However I would still want to have some decent plan of getting a few thousands or so of steady income if I quit at that time.

The next big thing I'm looking forward to is getting some new home maintenance skills, and seeing how the move from an apartment to a house really impacts our budget, compared to my naive estimates!

Posts: 21
Joined: Sun Feb 12, 2017 1:22 am
Location: Under the Great White North

Re: Lucky C's Journal

Post by Jake9870 » Mon Mar 20, 2017 11:43 pm

Congrats on the house! Hope the move is coming along well. I'm currently pondering on moving into a house now.. I don't think it's the right time, but my girlfriend (of 5 years) would like some more space and somewhere to garden.

Congrats on the move and looking forward reading more.

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