Pilgrim's Progress

Where are you and where are you going?
Pilgrim
Posts: 27
Joined: Sun Feb 07, 2021 4:53 pm

Pilgrim's Progress

Post by Pilgrim »

Greeting from sunny Florida.

I look forward to getting to know people through this forum. I’m new here, but from what I’ve read so far, there are many with whom I resonate.

My goal is to post monthly updates of our progress towards FI and continual learning. This first post will just be an introduction and give some quick background.

Who am I?
A 37 y/o guy, married with 1 child (three years old) and a 2nd on the way.

Quick summary of my past:

1983-2005:

I was raised in the Midwest. Didn’t have much money until after college.

2005-2008:
After graduating with a Mechanical Engineering degree from my hometown university, I worked as a design engineer for three years at "Mega-Corp." Starting salary was about 45k, ending salary was about 60k.

2008-2009:
I somehow had the idea that working as a high school math teacher would be fun, so jumped on that track. This wasn't a good fit for me and didn't last long.

2010-2011:
Back to engineering with a company from India (great cross-cultural experience), but still working in the Midwest. Pay was about 68k.

2012-2015:
At this point I was single, bored, and had a little money burning a hole in my pocket. I had 50k saved with another 25k in my 401k. My recent job experiences with the Indians had piqued my curiosity for other cultures.

So… I quit my job and spent 4 years living abroad. I lived off savings, including burning through the 401k as well. Obviously at this point I didn't know anything about FI or early retirement. And originally I thought it would be just for a year max, not four years.

During the first year I travelled to a handful of countries and also around the USA as well. One highlight was volunteering on a Kibbutz in Israel.

For the next 3 years I volunteered in Haiti. Great times.

In Haiti, I met a wonderful Haitian-American woman and we got married in May 2015.

By the end of 2015 I was officially broke and my wife and I decided to move back to the States. We chose to move to Florida, even though neither of us had family there. When we arrived, we weren’t just broke, we also had significant student loan debt from my wife’s undergraduate and Master’s degrees. If she was doing things over she wouldn’t have taken that debt, but that’s a story for another time.

Knowing what I know now, I think spending all my capital was dumb. In retrospect, I could have used my money to purchase an inexpensive rental and lived off the income from that for the 4 years.

However, it wasn’t an entire loss, because I met my wife and had many great adventures.

2016-Current Time:
I’ve been at the same engineering job here in Florida. My starting salary was lower than my last engineering job, at 50k gross, but I was very happy to have a job again after my lengthy hiatus.

Thankfully my income has steadily increased, and in 2020 I netted 77k after taxes.

The first few years back in America my wife and I were just treading water and not saving anything or paying off the student loan. It was very frustrating. However, I feel now we're finally stabilized.

For perspective, this graph shows how much we paid off on the student loans by year:

Image

I knew once we got our income up the student loan could get knocked out fast. We just had to get our income up which took longer than I originally thought.

The last few years my wife has been a realtor, and in 2020 she had a good year and netted (after expenses & taxes) 60k.

This graph shows our combined gross income over the last few years:

Image

Financial Picture as of Jan 31st, 2021:
So this is where we are now:

Debts:
  • None
Assets:
  • 401k: $13,087
  • Savings: $13,758 (in bullion and gold/silver mining stocks)
  • Cash: $15,035
  • Net Worth: $41,880 (not counting our two paid-off cars, which are depreciating so I won't include them here)
Housing Situation:
We currently rent a house, which is 1 mile from my job and takes about 6 minutes to arrive by bike.

Before that we lived on a 30’ sailboat at a local marina, which was quite entertaining, but when our son started walking we moved back to land. I hope to go cruising full-time some day when he's older and we're FI, etc.

Big Financial Goal:
Be Financially Independent in 5 years. Not sure if this is realistic, but that’s my goal. And it adds clarity to write it down. It makes the goal feel more real than just rattling around in my brain.

Immediate Financial Goal:
Cut spending.

My wife and I have been focused more on increasing our income and really let the spending side slip.

We’ve also seen that increasing our income has come at a cost. Our three-year-old is in pre-school three mornings/week where he has picked up some bad habits. Also, in general I feel like he does not get the attention he deserves from us because my wife and I both work so much and there is no family around. We’ve also eaten out much more for convenience (and feeling that since we're making more we can afford it - fail). We are also worn out most the time. Worse, I had to travel about 2 months last year, which put an even bigger burden on my wife. We’ve decided she will need to pull back on real estate this upcoming year, especially with our second child due in May.

Hope of this Journal:
I hope to learn from you all. Many here are much further along than us, and many are already FI. We are just starting this journey.

I hope to also be an encouragement to others, in some small way.

In my next post I’ll write about our 2020 spending. It was the first year I recorded every dime we spent. The reason was because at the end of 2019 I was shocked at how much we had made and how little we had to show for it. I couldn’t figure out where it all went. So I vowed that in 2020 I would track every dime, which I did, compiling all our spending on the last day of every month.

The results weren’t pretty, as we ended up spending a Small Kings Ransom in 2020. But at least I know where it went.

Question:
There are so many journals on this forum it is a little overwhelming. Everything I've read so far is interesting and I want to read through all of them. However, I would be particularly curious to hear from families with young kids who are on this FI adventure. Just wondering if someone might be able to name a few to me. Thanks!

Edit: Also, I notice my images aren't loading. But when I right-click they do load in a new window so the URL is good. If anyone knows what I'm doing wrong, please let me know.
Last edited by Pilgrim on Mon Feb 08, 2021 10:10 am, edited 6 times in total.

RoamingFrancis
Posts: 344
Joined: Wed Oct 30, 2019 11:43 am

Re: Pilgrim's Progress

Post by RoamingFrancis »

Hey Pilgrim, welcome to the forums!

Your international adventures sound great. You mention wishing you had gotten a rental—could you elaborate on that? I'm in my twenties and want both FI and world vagabonding :) I'm looking for strategies that will let me do both.

Peaceably,
Roaming Francis

Pilgrim
Posts: 27
Joined: Sun Feb 07, 2021 4:53 pm

Re: Pilgrim's Progress

Post by Pilgrim »

@ Roaming Francis, thanks for commenting and good question about the rental house. Here are my opinions, but as a newbie myself, take them for what they're worth.

In my case I believe there was an opportunity I missed, which may not be directly applicable today. However, it may be applicable again in a few years if there are a wave of foreclosures as some people predict (but who really knows?). It's great you're thinking about these things, you're way ahead of where I was at your age.

So... at the time (~2010) my best friend purchased a house in my hometown city for ~90k. Obama was giving out an 8k credit to first-time home buyers, so that made his purchase even less expensive.

The house was a 2/1/1, all brick in a decent neighborhood. This wasn't a rare good deal he found, it was just what houses were going for at that time in my city. Housing had overcorrected to the low side post-2008-recession. I just checked realtor.com and similar houses in the same neighborhood are now going for ~150k.

With the money I had saved I could have purchased a similar house to my friend and rented it out for ~$850/mo and netted perhaps $500/mo (~7% annual return on investment). Granted, that's not a lot of money per month AND I may have needed to work another year to stabilize that home purchase and save up another 10-15k cash. I also may have needed to travel slower than I did (which spreads out the plane ticket costs but is probably better anyways as I've come to think spending 1-3+ months per country allows time to get the feel of a place rather than zooming through as I sometimes did) or I could have worked for pay from time to time.

During the 4 years I was unemployed, my monthly expenses were often much lower than $500/mo (sometimes $0/mo) because I nearly always volunteered everywhere I went. For example, during my 3 years in Haiti, my volunteer position provided free lodging, free and lunch, plus access to the organizations vehicles. I was also living/breathing/eating with an awesome community which is what I really craved as a single person and couldn't find in my hometown. Back home everyone was busy with their own lives.

Long story short, by living on rental house income my travels would have looked a bit different, but I would have come back to America with my principal intact instead of coming back destitute. And the house would have appreciated significantly.

These days, finding a 7% return on investment seems harder. However, perhaps this is not true. I have lots to learn about investing.

basuragomi
Posts: 204
Joined: Tue Oct 15, 2019 3:13 pm

Re: Pilgrim's Progress

Post by basuragomi »

Great progress on the student loans! What a steep exponential!

Your images aren't loading because you linked to the album instead of directly linking to the image. Add ".png" to your image code like so (quote my post to see the code):

Code: Select all

[img]https://imgur.com/OhRz4Xk.png[/img] 

[img]https://imgur.com/C8W6cOe.png[/img]
Journals with young kids: @mooretrees, @hristo_botev, @frugalchicos, @biscuits_and_gravy
Last edited by basuragomi on Mon Feb 08, 2021 1:41 pm, edited 1 time in total.

Pilgrim
Posts: 27
Joined: Sun Feb 07, 2021 4:53 pm

Re: Pilgrim's Progress

Post by Pilgrim »

Aha! Thanks @basuragomi for help with the pictures, I just corrected my first post. And also thank you for referencing other family journals to dive into! What larks, I'm glad I found this little oasis on the internet.

On the student loans, we were quite pleased to have finished paying them off in 2020. Some people thought we were nuts to pay them off while they were being forebeared due to covid AND becuse Biden might get elected and forgive it. But we are happy to have the monkey off our back.

A few weeks ago I realized my go-to for wasting time online was reading the news, so I quit cold turkey. Then I didn't know what to do online. Ended up re-reading some of Money Moustache (who I'd found a few years back) and in one of his posts he linked here. That's how I found ERE.
Last edited by Pilgrim on Mon Feb 08, 2021 10:27 am, edited 2 times in total.

Hristo Botev
Posts: 1283
Joined: Tue Jul 17, 2018 3:42 am

Re: Pilgrim's Progress

Post by Hristo Botev »

Welcome! (Though I'd certainly not recommend you look at my journal for anything other than a "what not to do" in terms of ERE.) I'll add @Lemur to the journalers w/ young kids section of the library.

Reading your journal entry prompted me to go back and look at my FI spreadsheet, which, curiously, I started when I was 37, roughly 5 years ago, with a very general "FIRE in 5 years?" goal (it wasn't until a couple years later that I found ERE, however). Spoiler: I'm not FIRE; though we're significantly more FI than we were back then. Also, FWIW, I spent all of my 20s traveling around and spending more than I made; and then DW and I spent our early 30s building up massive amounts of student loan debt (mostly mine). In hindsight, while I probably wouldn't do the student loan debt thing again, I certainly don't regret any of that time I spent in my 20s; it's what got me ready for a wife and kids.

I'm looking forward to following your progress.

rube
Posts: 701
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Pilgrim's Progress

Post by rube »

@pilgrim, our kids were 4 and 7 when we started our journey here in 2012. We're located in Europe, so might be too different to be of much help.

Good luck with the journey!

RoamingFrancis
Posts: 344
Joined: Wed Oct 30, 2019 11:43 am

Re: Pilgrim's Progress

Post by RoamingFrancis »

@pilgrim cool, thanks for the info.

Your experience in Haiti sounds fascinating. What sort of volunteering were you doing?

Pilgrim
Posts: 27
Joined: Sun Feb 07, 2021 4:53 pm

Re: Pilgrim's Progress

Post by Pilgrim »

@RoamingFrancis Good question. When I was in Haiti, my primary goal the first two years was just to learn the culture and language. I became a resident, purchased a vehicle, etc. The organization I was with did primarily job skills training and also maternal care. I started out working as a driver, but also did general maintenance and hospitality work at their hotel they ran for foreigners. Each day was something new.

I also took a summer off to live in a rural fishing village studying the language immersion-style. The third year I was finally able to speak the language enough to start being of more help (still nothing close to fluent). That year I worked managing a bakery, long story, but was lots of fun.

That's a pretty brief summary. I personally learned a lot, and ended up meeting my wife while there. However, I didn't make any big (or small) changes to the country, and indeed left somewhat disillusioned about aid work in general.

Where do you hope to travel? Do you have countries in particular you want to visit?
Last edited by Pilgrim on Tue Feb 09, 2021 11:22 pm, edited 2 times in total.

Pilgrim
Posts: 27
Joined: Sun Feb 07, 2021 4:53 pm

Re: Pilgrim's Progress

Post by Pilgrim »

2020 Spending Review

As mentioned in my previus post, here is a summary of last years (2020) spending:

Image

Here is spending by month:

Image

And here is the breakdown of category by month, to get into the weeds:

Image

There is lots of room to improve. Last year we really weren't working on saving money. We pretty much ate out when it was convenient. I think the thermostat was at 72 degrees the entire year. Etc.

Here are my comments on various categories:

Rent

2/1 house. It meets our needs and is close by my work (1 mile). It is priced a few hundred dollars under market, I think because it is older and there is no garage and the kitchen is very dated. No dishwasher.

I think $1000/mo is decent for a home rental in this area. We lived on a sailboat at a local marina before this and our monthly expenses were about $800 with utilities, so that was a little less expensive.

However, most my co-workers commute 30 minutes+ to find cheaper housing.

Auto

This has been a spendy year on autos.

Our 2006 Hyundai Sonata died in October with only 137k miles. What's worse, the month before I had put $1,000 into it on brakes, rotors, ball joints, etc.

It threw a rod and needed a new engine. Turns out its a common problem (probably should have read carcomplaints.com a bit closer before buying).

Replacing the dead engine with a used one was going to cost about $4,000 and the newest used engine I could find had about 100k miles on it. To put a new engine in was going to cost about $6,000. So I sold the car to a salvage yard for $450.

My criteria for buying a new car was full-size sedan under $5,000, under 100,000 miles and 2010 or newer. The only local car that came up with this search criteria was a 2010 Crown Vic Ex-Police cruiser with 85k miles. Probably was a mistake, but we bought it for $4,650 (5k with reg/taxes). Then $1,200 went into the car to de-police it and fix some things.

Then my wife wasn't used to rear wheel drive (or bald rear tires, or a V-8 for that matter) and had the first accident of her life when she spun out making a right turn. That set us back another $1,000 to put the car back together, including a new rear axle and rear tires.

Health

My insurance is free through my job. But my employer only covers me, not my family. The theory is it's not fair to the single employees for those with spouses/children to receive more benefits than them. Whatever.

For my DW and son we use Samaritans Healthshare, which has been awesome so far. We pay $455/mo. They pay out per incident with a $300 deductible. We had an ER scare in 2019 where the bill was over $20,000 (for them to perform every test under the sun and in the end say nothing was wrong). Samaritans actually paid every dime (they waived the deductible because we got a discount on some of the bills).

For anything under $300 we pay out of pocket. Which means my sons Dr. visits are all out of pocket.

Misc

<birds chirping>

I'm not going to have a miscellaneous category in my 2021 accounting. At least not one $328/mo.

I can actually look at every transaction, and did take a peak. Death by a thousand cuts (of consumer spending).

I did note a $250 bill for Cross Fit in this mysterious "misc" category. About 4 weeks commenced of trying to sort out the fifteen different types of "snatches."

Coincidentally, that was also right before a disk herniated in my back and I spent the month of November bed-ridden with sciatic pain. There might be correlation.

DS

Diapers / wipes were his biggest expense for the longest time. We started this bad habit of using disposable diapers when we lived on the boat because we didn't want to wash cloth diapers not having our own washing machine. I should say "I" didn't want to, my DW would have preferred to try cloth diapers. Although I suspect she wanted me to clean them.

At the time, I'm not sure if our fellow marina dockmates would have appreciated us washing our sons poopy diapers in the communal washing machine (because that's how I was planning to clean them). Anyways, he's potty trained now.

Now the big expense for him is pre-school 3 mornings per week.

Insurance

Our 6 month Geico premium for our two cars is $918. This is just liability. The office where my wife is a realtor requires us carry more insurance. Before we were paying just the bare minimum and insurance was far less.

Life insurance policy: $40/mo.

No other insurance that I can think of.

Cell Phone / Internet

Internet is $45/mo.

Cell phone for both of us is $120/mo with T-Mobile. Unlimited everything. Slightly embarrassing.

I just switched to Mint (runs on T-Mobile towers) to see how it works. I've been using it a week and so far it's fine. I'm going to switch my wife over which will reduce our bill from $120/mo to $40/mo and still gives us 10gb/mo/ea with unlimited talk/text.

We did purchase new phones this year too. For me, a refurbished LG G7 ($150) and for DW a refurbished Pixel 3 ($200).

Clothes

We probably spent more than this category on clothes shows, but transactions clearly likely to be clothes (i.e. Macy's) added up to $1,050.

Probably room for improvement here.

Citizenship

DW emigrated to the USA with her family when she was six years old, but finally became a citizen this past year.

Streaming

We subscribe to YouTube for $12/mo. I know it's free and all that, but if you pay you can listen to videos ad-free on your phone with the screen turned off so it doesn't use much data (or battery). I use YouTube for listening to things at work.

No doubt there is a cheaper option. I'm open to enlightenment.

The balance is Amazon Instant Play shows we randomly click "buy-it-now".

Someone may be happy to know that I've already been inspired from what I've read here so far that I went and got a library card this past week.
I noticed they have about 5 million DVD's there I can check out. I didn't realize DVD was still a thing (like VHS?) But actually, I'm sure it's a great way to watch things for free. I may try that instead of the tempting Amazon Instant Play.

Home Inspections

We were going to buy a house. $785 worth of inspections convinced us not to. At least not that one.

DW Discretionary Spending

At $58/mo, or 1% of our overall spending, you can tell who's the big spender in this relationship (hint, it's not her).

Final

If someone made it this far, please feel free to offer critique, that's of course welcome.

Pilgrim
Posts: 27
Joined: Sun Feb 07, 2021 4:53 pm

Re: Pilgrim's Progress

Post by Pilgrim »

@Rube Thanks for reaching out! I've just started reading through your thread and it sounds like we have a lot in common. I'm really new so have only read through a couple journals start-to-finish (C40 and Hristo). It feels like I'm a little late to the party. Instead of posting comments on old conversations, I'm thinking to comment more in the as-yet-unwritten stream-of-consciousness on others journals/threads.

@Hristo Thanks too for reaching out. Your journal is quite deep. I left a comment over there. Looking forward to joining the future conversation as well.

Hristo Botev
Posts: 1283
Joined: Tue Jul 17, 2018 3:42 am

Re: Pilgrim's Progress

Post by Hristo Botev »

Thanks @Pilgrim, I saw that and really appreciate the substantive comments and your viewpoints (I'll have a reply shortly).

It'd be fantastic if you don't up and decide one day to delete your very existence from this forum, however. Nothing like going back through your journal and seeing massive gaping holes that leave the journaling process almost nonsensical.

Eureka
Posts: 332
Joined: Fri Jun 10, 2016 11:03 am

Re: Pilgrim's Progress

Post by Eureka »

Welcome! As a European I need to ask the obvious question: if there is only 1 mile to youf place of work, why do you have 2 cars?

Pilgrim
Posts: 27
Joined: Sun Feb 07, 2021 4:53 pm

Re: Pilgrim's Progress

Post by Pilgrim »

@Eureke Good question, and valid from any standpoint, not just a European's.

The short answer why we have two cars is for convenience. So we can both be out at the same time. Do we need two? No. And after I'm sufficiently inspired we will probably try going down to one.

Here are some longer answer(s):

- Our lives are not in any sort of "steady state". More like a roller coaster. In the 5 years we've been married we have lived in 6 locations. At the moment I live a mile from my work, but I think we'll be moving again when our current lease is up in a few months.

- With my wife being a realtor, she often takes off to meet with clients when I get home from work (and sometimes a good deal of the weekends). While she's gone I use the other vehicle to take my son out to go the park or get errands done. BUT, my son and I could do more stuff at the house or in the neighborhood. Or I could bike him around with a little trailer.

- I tend to live by the motto, "Two is one, one is none." That's pretty anti-ERE though, so if I'm going to stick around here maybe I should reconsider!

Do you own a vehicle?

Pilgrim
Posts: 27
Joined: Sun Feb 07, 2021 4:53 pm

Re: Pilgrim's Progress

Post by Pilgrim »

More 2020 Charts

I've tried to make a few charts like others do showing our savings rate and how much we're spending vs. income ("we" being my wife and I).

One thing I notice is that we're a little all over the place month to month.

Image

Image

In 2020, our savings rate above and beyond household expenses was just over 50%, and we used it for:
- paying off the remainder student loan debt
- funding an emergency fund (Dave Ramsey's idea, how useful is this anyways? we've got credit cards for emergencies)
- a little cash in the bank
- charity & putting monies aside for potential future business ventures. Neither included in our annual spending charts from above as I consider both investments of sorts.

Hristo Botev
Posts: 1283
Joined: Tue Jul 17, 2018 3:42 am

Re: Pilgrim's Progress

Post by Hristo Botev »

Pilgrim wrote:
Wed Feb 10, 2021 10:31 pm
The short answer why we have two cars is for convenience. So we can both be out at the same time. Do we need two? No. And after I'm sufficiently inspired we will probably try going down to one.
FWIW, I spent several years trying to get our family of 4 down to 1 car, which we finally managed to do in late '19 IIRC. I walk to work and am able to do some of our family shopping by foot or by bike, and the kids walk to school. DW used to walk or take the bus to work, but she drives now that she's adjusted her schedule to go in super early so that she's home when the kids get home from school, which means no more aftercare costs (FINALLY!). So that's all fine and good during the week. BUT, the weekends can be a hassle as both kids play competitive travel sports, often having games at the same times in different places. And when you couple that with grocery shopping and various other weekend errands; well, it can be more trouble than the savings in expenses is worth. And now add in the fact that our 1 car is a gas guzzler, to say the least, which we won't be getting rid of b/c we have plans for it. So, that's all to say that, for us, 1 car living wasn't what I imagined it to be; and so we will soon be returning to being a 2 car family, looking to buy a used Prius so that at a minimum we're able to go weeks/months without going to the gas station.

Honestly, there's only so much one person can do to try and live outside the system; and for much of the US that system is very car dependent. You can find ways to drive less, for sure, and we do; but being a parent of school-age kids in 2021 in the US is a constant struggle of deciding how much is too much and how much is too little in terms of parents playing cruise director in the extracurricular activity scheduling game. I used to stress out about all those decisions, about the costs, about the wasteful transportation required, worrying that my kids might not be getting enough "unstructured" time. But I don't really care any more--I generally just say yes when my kids want to pursue some thing that DW and I agree is a productive endeavor; and I don't really stress about the costs and the transportation hassles.

All that's to say, good on you for trying to get down to 1 car. But I'd suggest not fighting too hard if/when you get to a point as your kids get older and it's just too damn inconvenient to have to throw only having 1 car into the mix with all the other stuff you're dealing with that are already complicating parenting and husbanding and living. Honestly, as a husband and father trying to provide a good life for your family, you've got bigger fish to fry than whether you can manage to get by with 1 car. Just do the numbers and factor in convenience costs, and proceed accordingly.

Also, I've spent a good chunk of my life in multiple places in Florida, and for the life of me I can't imagine not having a car there, despite the fact that it is 100% flat and therefore seemingly perfect for biking. I mean, I believe I saw a video where even Rob Greenfield was considering leaving Florida for more peaceful pastures. Florida is town after town of criscrossing multi-lane state highways with 55+ speed limits, with everything spread out in strip malls and big box stores. I only lived in Florida as a single man and as a married man sans kids, but if the 4 of us lived there, I can't imagine how we'd get by with just 1 car.

Anyway, sorry for the long post on your journal.

Pilgrim
Posts: 27
Joined: Sun Feb 07, 2021 4:53 pm

Re: Pilgrim's Progress

Post by Pilgrim »

I kept seeing references to this Wheaton Scale thingy-ma-bob.

Just found it:

Image

Here is how we stack up:
  • Our SPENDING puts us at Level 1.
  • Our SAVINGS puts us at Level 5.
  • Our FOCUS and RETIREMENT GOAL puts us at Level 3.
  • Our VACATION and EXPERIENCES puts us between Level 1 and 2.
On a similar vein, I saw this great analogy on Rube's journal:
@Rube wrote: Analogy “becoming FI” – “running a Marathon”

Some people don’t see why they should run a marathon when they are already at the finish
Born with a trust fund

Some people finish a marathon in just over 2 hours
saving rate 85% or more

Some people finish a marathon while using doping in 2-6 hours
not extremely frugal but having a very high income.

Some people enjoy the scenery while walking/running and having a pick nick before they finish the marathon in 1 day
on course for ER, determined, enjoying life* but not extreme

Some people don’t enjoy the scenery, hate walking/running, are complaining constantly and it will take many days before they finish the marathon
Cubicle drones who hate work and save (hopefully enough) to be FI at 65

Some people never finish a marathon
saving rate 0% or negative

I'm the impatient sort. I realized a few years ago we needed to retire asap because the laundry list of things I want to do are not possible with this pesky 9-5. I think having four years of early-retirement "freedom" spoiled me for life.

The last few years my philosophy has been the, "finish a marathon while using doping in 2-6 hours" method. My thinking was if we could get our income up to 250k+ per year we could be done with this journey pronto and wouldn't have to cut any spending either. Win-win.

Much learning yet there is for me.

Pilgrim
Posts: 27
Joined: Sun Feb 07, 2021 4:53 pm

Re: Pilgrim's Progress

Post by Pilgrim »

@Hristo Thank you for the thoughtful reply regarding the vehicle situation. I agree with everything you said.

I've noticed one of the problems with downsizing is that after downsizing you can do less things.

E.g. I've moved down to very simple arrangements several times where I decided to sell all my larger tools, but now I'm back in a rental house where there's more space but am limited in what things I can do (such as car repairs because I've sold my ramps, jackstands, air compressor, impact wrench, etc). Worse, I've done this sell everything, buy it all back, multiple times and I'm only 37.

One year I declare minimalism the best thing, but then later find my minimalism restricts being able to get stuff done that needs to get done.

There are a certain amount of tools necessary for jobs at hand. What I got from your comment was that at your stage in life the key job at hand is raising children (which comes ahead of FI in the priority pecking order), and having 2 cars is useful for getting everyone where they need to be.

I only have one child and already running into this conflict. A few days ago my 3-year old had his first "field trip", a walk with his class from the school to the local post office to mail his first letter (valentines to their Moms). A parent was supposed to come walk with their child as the route was through the downtown. Well, just so turns out we already had a scheduled sonogram pregnancy appointment at the exact same time. My DW was really upset she couldn't go to her sons FIRST "field trip." She lamented, "This is the challenge of two kids, I can't make it to everything for both." And our second isn't even born yet! Long story short, having two cars made all the logistics work where I could go to his school and be their with him.

But, yeah, at the same time I realize these are first world problems! Even having 1 car is a luxury.

ItsALongStory
Posts: 40
Joined: Sun Jan 13, 2019 9:50 am

Re: Pilgrim's Progress

Post by ItsALongStory »

Just stumbled across your journal, interested to follow along. I agree with you all regarding making sacrifices that in turn cause more harm than good. We just went through a downsizing effort but wouldn't be surprised to see us get another home in the mid term where acquiring stuff becomes more of a thing again.

Keep up the charts game, i'm digging it.

I guess we'll cross that bridge when we get there.

Pilgrim
Posts: 27
Joined: Sun Feb 07, 2021 4:53 pm

Re: Pilgrim's Progress

Post by Pilgrim »

How many years until FI?

Number crunching time.

Using the networthify calculator to figure out when we could be FI.

For all the graphs below I'm using 3% SWR with 4% annual return on investments. Please let me know if that seems off. I'm new to this.

Calculation A: How long to FI if we maintain our 2020 level of Income and Expenses?

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20 years! Never!

Calculation B: How long to FI maintaining our 2020 Income but lowering expenses to 4 Jacob's* ($34,952)?

* 4 Jacobs because we are a family of 4. While our kids might not need a full allotment there's a chance we could have another kid or two. 4 Jacob's seems reasonably frugal-xurious for our family.

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Ouch. 9 years seems too long as well. Especially to run full-out like we've been doing recently.

Calculation C: How much annual tax-free income would we need to FI in 5 years* maintaining our 2020 expense level?

*In 5 Years I'll be 43 and my son will be 8. That seems a good time to have all my time back, if possible.

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I don't see 440k annual after-tax income being realistic.

Come on Calculation D, you're my last hope!

Calculation D: How much annual tax-free income would we need to FI in 5 years with 4 Jacobs ($34,952) worth of expenses?

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Conclusion:
There was debate in my mind whether to keep pursuing more income or focus on steady-state living with our current situation.

I've never ran the numbers until just now, but had suspected our income would need to be pretty high to retire anytime soon.

Looks like there is more work needed on both offense (income needs to roughly double) as well as defense (spending needs to roughly half) in order to FI in style in 5 years. I don't know how realistic 250k after-tax net income is, but this calculator tells me that's the goal.

I like to live by the motto shoot for the moon and maybe I'll at least end up in the sky.

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