Starting an FI journal is probably as good a first step as any to bringing some semblance of clarity into my journey toward financial independence. Sloughing off unproductive behaviors and setting goals are my two main motivations. Since high school, I have always rejected the "normal" path and espoused independence. Leaving home at 17, moving 3 states away, traveling around the country in a 1986 Volvo 240DL with everything I needed in the trunk. Those two years were the start of a long and very roundabout journey that I somehow feel I will come full circle back to at some point. Going back to college was one of the best decisions I ever made, but I still miss those teenage wanderings. I worked hard for 5 years out of college, then my spouse and I decided to quit it all, put everything into storage, and with $7K to our names, hit the Appalachian Trail for a thru-hike. That was wonderful and lasted as long as it took to tear my Achilles tendon. Left the trail (which I still regret not trying harder to go back after the tendon healed...maybe someday) and drove across the country to decide where to put roots for a while. Ended up in the west with a great job that I got by knocking on the door of a little suburban start-up consulting firm...right place at the right time. We've been working hard again for the last 12 years and now feel like we are going on the right path to FI to enable us to travel and do things other than just busting our butts working. Raising kids the right way is a big part of it too.
One of our ideas right now is to move to a low COL area when we stop working. We might buy my spouse's parents house (~100K) in a low COL area in the south which would allow us to have a cheap home base from which to travel plus better climate with fishing and beaches close by. We'd probably wait to do this until the kids are out of school (or home school) because the schools there are not good.
Shorter term goals:
1. Pay off the mortgage. 170K left on a 400K house (Original mortgage 297) @ 3.375%. Refi'd from 30 year to 15 year in 2011. I know a lot of people say to leave the mortgage at interest rates below 4% but being debt-free is really important to us mentally and emotionally.
2. Invest $3K to 5K per month in equities.
3. Continue to max out my 401K. I get 6% matching plus 2% flat from company
4. Start an Individual 401K for spouse (self-employed)
5. Cut spending. Need to get more purposeful about this but it is a big goal.
A good start, but that's it for now. Cheers to me and you.
Squeegie's FI Journal
Re: Squeegie's FI Journal
Accomplishments year-to-date:
1. Recognizing that food costs have been a big money-sucker to date, especially lunches out. Have cut food expenses by $150 - 200 by bringing lunches to work this month with the added benefit of feeling healthier too. Along with this is our family's goal to eat healthier by increasing fresh foods esp. veggies in dinners.
2. Maxed out 401K in August.
3. Invested in 50K plus in taxable accounts. Need to update our ledger.
4. $100K liquid savings ( high in case of in-law's home purchase - timeframe unknown when he decides to move)
1. Recognizing that food costs have been a big money-sucker to date, especially lunches out. Have cut food expenses by $150 - 200 by bringing lunches to work this month with the added benefit of feeling healthier too. Along with this is our family's goal to eat healthier by increasing fresh foods esp. veggies in dinners.
2. Maxed out 401K in August.
3. Invested in 50K plus in taxable accounts. Need to update our ledger.
4. $100K liquid savings ( high in case of in-law's home purchase - timeframe unknown when he decides to move)
Re: Squeegie's FI Journal
We did the math last night and calculate that our savings rate is 88% of take-home pay so far this year, including extra payments toward principle on our mortgage, which I consider an investment/savings. We've just been writing checks toward our investments each month with the extra cash in our checking account but hadn't calculated how much we'd invested in dollars or as a % yet. I'm really gratified to see this % so high! It also doesn't account for maxing out tax advantaged accounts already this year. I've seen a lot of other people on here with great graphs on monthly savings rates and net worth, and one of my new goals is to get something like that formatted in Excel. We have a basic spreadsheet with our investments but haven't created any graphs yet. On the to-do list.
On the areas to work on, I went through some quick back-of-the-envelope calculations on spending on food and clothes so far this year, and really need to work on getting this down more.
On the areas to work on, I went through some quick back-of-the-envelope calculations on spending on food and clothes so far this year, and really need to work on getting this down more.
Re: Squeegie's FI Journal
Hi squeegee, thanks for sharing your journey.
That is an impressive savings rate, great job! Without seeing your expense breakout it is hard to say, but clothing and food costs are definitely an area that can be significantly cut for many people.
That is an impressive savings rate, great job! Without seeing your expense breakout it is hard to say, but clothing and food costs are definitely an area that can be significantly cut for many people.
Re: Squeegie's FI Journal
88% for this year is indeed very impressive! Of course it's good to look if you can optimize the food and clothes spending a bit more, but know that you are doing a kickass job so far. If you keep this up you can retire in just 3.2 years assuming 5% yield, 4%SWR and a net worth of 0 (according to networthify). Since you have quite a nice stash already, it should be a breeze. 
Re: Squeegie's FI Journal
Something looming in my life that makes this quest for FI even more important is that the company I work for is in financial turmoil. Without giving any details because it is a well-known-name in finance circles these days, suffice it to say that job security is at an all-time low. Although I feel relatively confident that I could find a new job or do some consulting work if I lost my job right now, the sector that I work in is not doing well at all, so I don't know how long that would take. In the past, I have always had 100% confidence that I could land pretty much any job I put my mind to in my chosen field, which is highly specialized and, therefore, in demand. But with the downturn in my sector, I am now questioning that assumption. Really I say this just to emphasize to myself how important having FU money and being FI is to me and my family at this point in my life. It is driving a fierce desire to minimize expenses and maximize savings.
My spouse and I had a really good conversation about early retirement last night. I feel like we are on the same financial page for the first time in our relationship. Sweet!
On a side note, I really have to work on breaking my "two spaces after a period habit." My friend the editor says it is driving her crazy! I guess old high-school typing class habits die hard for old dogs like me. I just went back through the first paragraph of this post and deleted all the extra periods. Ok, I'll admit it - yes, I am an INTP and a total Type A.
@Dave and @Quadalupe: thanks for the notes. I am working on fully internalizing my spending habits to better understand them as well as trying to understand exactly how the SWR and savings rate tie together.
My spouse and I had a really good conversation about early retirement last night. I feel like we are on the same financial page for the first time in our relationship. Sweet!
On a side note, I really have to work on breaking my "two spaces after a period habit." My friend the editor says it is driving her crazy! I guess old high-school typing class habits die hard for old dogs like me. I just went back through the first paragraph of this post and deleted all the extra periods. Ok, I'll admit it - yes, I am an INTP and a total Type A.
@Dave and @Quadalupe: thanks for the notes. I am working on fully internalizing my spending habits to better understand them as well as trying to understand exactly how the SWR and savings rate tie together.
Re: Squeegie's FI Journal
Thinking a lot about post-FIRE annual expenses and how much we can cut back for a family of four. Right now with young kids the childcare expenses are pretty high, but that should decrease once they are both in school. I would like to get to an annual budget of under $30K but I don't know how realistic this is. If we sold our expensive house or pay it off I think I could retire now if we could get the expenses under $30K. So with that goal in mind, we have decided to finally do the basic work of keeping track of every dollar we spend so we can face reality about how much we spend right now and get a clear picture of what we need to do to reduce expenses. I know this is really basic for most people on this site but we've never seriously done it before. The time to start is now.