SWB's path to financial independence

[SavingWithBabies]

I've been thinking a lot about what happens when we get to $1,200,000. A while ago, I lowered the goal from $1.2M from $1.6M which is a bit aggressive if you factor in this is for both myself and my wife along with multiple young children. I realize I could get called out on that as it being way too high but I think it is realistic and would rather error on the side of too much.

So my goal is really $1.2M plus a paid off house. When I get to goal, I'm going to keep working on at least a handful of smaller goals. I like this idea because smaller goals are easy to achieve. I've been thinking about those goals and there are some I've thought quite a bit about:

- boot up money for my kids (perhaps for education or other purposes)
- money to travel to Japan (multiple times, ideally long term stays w/ the kids) mostly to appease partner but it interests me too
- seed money to start a business with my brother when he retires from his current line of employment
- money to build a house in the country with geothermal greenhouse(s) (would sell or rent out city house if that happened)
- money to buy or build a catamaran

I don't know how much all of that will be and if I'll get all of it done. It could be close to that original $1.6M goal (as in $400k over $1.2M, not another $1.6M). There is some flexibility in the goals so I'd rather adjust/trim them to meet the timeline.

I want to be finished with the accumulation phase in ~7 years which is roughly when my brother will move up near us. I'll keep trying to make the side businesses take off and if I can be reasonably successful with those (as in paying all expenses with slight margin so don't have to touch any savings), I might sacrifice some goals (or extend their timeline) and coast my way onward.

It's early of course but I do like thinking ahead. Plans will change but having a plan is nice. I'm fairly certain we'll get to $1.2M and a paid off house in that timeline. Hopefully, we'll get at least that first goal knocked out. Everything after that will be a pleasant surprise.

[SavingWithBabies]

Over past week or so, I've been moving more cash back into the market. Some in mutual funds and some in individual stocks. Mostly mutual funds as I got my 2020 Solo 401k contribution in with profit sharing from my "employer". That Solo 401k plan at Vanguard makes it more convenient/optimal to stick with one or two mutual funds.

Job-wise I found a contract-to-hire option that might work out. Still waiting for that to get finalized but if it does, I think I'll jump ship and take it as I don't want to suffer 10+ more months at the current place. I should have done contract-to-hire at the current place as I could have more gracefully walked away. But it'll be okay. I might end up burning a bridge but it is a bridge I really don't want so I guess my FI money gives me the confidence to be okay with that.

[SavingWithBabies]

Well that was quite a week to move that cash back into the market however I'm fairly happy with my choices, even if they are down, I'm optimistic and I honestly feel a bit better not having it sit out even though it would be safer to do so. Well, up until GME hit the fan and made me worry about what the rest of the investors might do on Monday. But my worry is hopefully overblown (401k money has to go somewhere, etc).

Contract is a go! Quite a bit better compensation and I think it'll fit my preferred work style more than the current employer (flatter, focusing on the project/shipping less on rigid roles, more room to jump around to work on different parts, etc.). I'll give two weeks notice on Monday and likely offer to contract off hours while they get a replacement ramped up. I'm completely realistic that I'm no longer going to feel fulfilled at any employer at this point however there are degrees of just how annoying it is to work for an organization and I think this should work out well on that front. If it doesn't, at least the compensation and being a contracter instead of employee makes it an easier pill to swallow.

Speaking of contracts, the one from 2018 that stiffed me might now do a SPAC and supposedly I might see some money from them. I don't have any concreate details yet. I guess the ICOs of a couple years ago can be the SPACs of today. Be careful!

[SavingWithBabies]

Progress: 70.3% ($843,500 / $1,200,000)

I started my investments with mutual funds. I still have roughly 1/2 of our net worth in mutual funds. That said, reading about how Tesla entered the S&P 500 (on a tangent while reading about GME) and what the index funds had to do to reconcile that has pushed me further away from index funds. Not a huge push but just one more little push in a series of many pushes I've felt while reading and thinking about what I've read from these forums. I'm not selling all my index fund holdings over night or anything like that but long term, I think I'll continue to move away from them while learning more about investing.

[Ego]

@jacob Oops, I meant Starlink -- SpaceX is needed for Starlink or at least seems to be part of the reason SpaceX is happening.

Also, we've had satellite internet before but this is different: SpaceX’s prototype internet satellites are good enough for gaming, Elon Musk says.

Starlink is now taking pre-orders. Looks like a great solution for homesteaders.
https://www.cnbc.com/2021/02/09/spacexs ... s-ipo.html

[theanimal]

I'm very interested in Starlink. I like it from a practical perspective but am not so pleased with the idea of not a single spot on the planet away from connection and the new night sky aesthetic of seeing hundreds of satellites. The people who have done beta tests in Washington state have reported very good results. I'm on the beta list for when it gets to my area. However, I don't think I'll do any preorders myself as Elon's empire has a tendency to make a lot of promises and take a long time to deliver on them. I do think this will be established within a few years though.

[SavingWithBabies]

I almost ordered Starlink. They are doing a beta up here in the UP (and parts of Canada). Might be other parts of the USA too. $500 for the dish and then $100/month. There are a lot of reports on the subreddit for Starlink here:

http://reddit.com/r/starlink

From what I've seen so far from the beta testers, I'm really impressed (speeds are more than good enough for me to do my remote work and the latency is quite good so it should work well for video communications like Zoom). But apparently right now they are bouncing the signal up and back between the ground station and the subscriber. They aren't yet doing satellite to satellite mesh networking with the lasers like they were talking about. That is supposed to come at some point. I suspect for it to scale up to support an immense number of subscribers it'll require that mesh network. I'm still optimistic however they still need to prove they can do that. I might be wrong in how important that is but I think it's a key part of scaling it up. So it'll be interesting to see...

@theanimal I'm not crazy about having Internet wherever you want for the most part. But I am happy that if I move a bit out of town and the local cable company wants some astronomical amount to extend their lines so I can get internet access, I'm no longer facing doing that or using the other alternatives that don't work quite so well for working over the internet. I wonder too what the night sky will look like once they have all the satellites up. Hopefully, the mesh won't be dense enough to feel overwhelming. I suspect it won't be although other companies want to get in on the whole thing so that might make it worse too in terms of satellite density.

[SavingWithBabies]

I gave two weeks notice and finished out the regular employment gig I started 3-4 months ago. I would normally not leave so early after starting a job unless there were very serious problems. In this case, the problems weren't that serious it was just that I really was not enjoying how we were working. I get really annoyed if I feel like my skills and abilities are not being well used by the business. My thinking is that if I'm being underutilized, then the rest of the engineers are probably too and this is a management fail in that how we are working is not being done well. I find that it is very hard to fix these kinds of problems from below so typically it's better to move on.

In this case, I got annoyed and found a contract-to-hire opportunity that has a long initial contract (year) at a high rate but more importantly, it's much earlier stage (the employment option claimed to be early stage too but it wasn't really). And it has a flatter style (SV-style startup).

Would I have done this before having the ERE nest egg? I don't think so. I think part of my thinking was I have another 2-7 years to be solidly FIRE by holdings, I didn't want to work for the people involved again (not that I dislike them, just preference) and my network is big enough and I think there is enough other work to not worry about the risk of burning this bridge. I don't like burning bridges and I tried to exit as professionally as possible while still being as honest as I felt I could be about why I was leaving.

I should point out I don't expect better it's just that earlier stage, SV-style flat hierarchy and contract (if possible) seems to fit me the best. I like coming in, knocking out some solid work and then leaving. I don't like all the corporate bullshit. Maybe there is a company I'd want to stay at long term out there (without it being some kind of golden handcuffs situation) but so far, I haven't found one and I suspect they don't exist. Part of it might be who is in control (the whole notion of C-suite and hierarchy and those closest to the cash/power helping themselves liberally while being stingy w/ those outside of the inner circle is such a common thing in business that maybe the only way to be happy after seeing that is to be inside the circle).

That might sound like sour grapes and that I envy the C-suite but I don't think it's that (I don't envy the time they often spend on politics and/or making the business their life). It's more that I like working on early stage projects when you're making something from nothing and I get annoyed when things get in the way of creating something good in an efficient way that has the potential to be good (I want to say great but that really makes me sound full of myself -- but it is a team effort). There are a lot of complications in business but the cookie cutter approach to model an early stage business the same way as a later stage business doesn't make sense to me. I think it's more common with people in charge who have worked at large corporations. They have a lot of preconceived notions and blinders about how to do things and I think some of that is self-serving.

So I like true value creation but I also want to reap some of the rewards of that value creation. Right now, contracting at early stage flat companies seems like the closest thing to that. I could also start my own things and I have tried that. I might do that later again as I've reflected quite a bit more on what kind of opportunities I'd want to target market-wise (or at least identified some drawbacks to the one I originally targeted).

I think after I get to solid FIRE, I'll try my hand at doing micro-SaaS or micro-startups. Because I won't have to worry about immediate short term returns, I can try more speculative things. My intuition has always said those without a need for something will do poorly in the short term trying to get that need met and I've extrapolated that to something like those in business who don't need or want the capital return will do poorly. Or in other words, once I'm solidly FIRE, I might no longer want to exert the effort to try these activities as I won't need the money. But I've started to appreciate more the other rewards involved and the satisfaction of making things efficiently that people actually use.

[SavingWithBabies]

After living in the UP for almost two years now, I'm start to appreciate why saunas are so popular up here. I know it's due to the Finnish/Scandinavian heritage common in this area but many houses come with a sauna (or sometimes a hot tub). I took a really hot shower today which I'm normally not a fan of as I felt a bit too chilled. Our house will definitely have a sauna or a hot tub. I think I'd prefer a sauna as they must consume less energy than hot tubs. The local Y has both but with COVID...

That said, our winter has been relatively mild. My relatives south of us in Chicago/Indiana have way more snow than we do! I think even those in southern Michigan and Wisconsin have more too. Our winter is longer but so far this year, it's been milder and more sunny days. I'm so happy the winter solstice has passed and the days are getting longer again.

New contract is great! Plenty of early stage startup funnies but these are my people. I feel like I'm home. Happy I made the move.

[SavingWithBabies]

Progress: 70.4% ($845,500 / $1,200,000)

[SavingWithBabies]

I'm a bit worried about the "tax the rich" impacting me. I'm only reading summaries but here is what might impact me:

- raising the corporate tax rate from 21% to 28%
- reducing tax benefits for pass-through businesses

I'm wondering if they'll go after the pre-tax deductions for things like solo 401k. At a certain point, I'll be better off being an employee than a contractor. Depending on what they change, it would definitely impact that calculation/decision. Or perhaps contractor rates go up? The other parts the articles are including make it sound like these things would only impact the mega rich but the above could potentially impact me and I don't think I'm mega rich (guess that is a typical response but still...).

If I had to wager, I'd bet that it wouldn't really impact me very much. But my certainty on that is low.

[Gilberto de Piento]

Hi SWB! After you commented in my journal I thought I had better read yours since I somehow had mostly missed it over the years. Over the last week or so I read the whole thing and I am impressed with both your writing and everything you've accomplished. I am also a ways out from FI, live in the upper midwest, and wrench on random projects so I wanted to say hi and subscribe. I'm jealous of your location, the shoreline part of the UP (as well as the north shore of MN and the Lake Superior shore of WI) is awesome. Keep up the good work!

[SavingWithBabies]

@GdP Thanks for reading! I'm hoping we'll buy a house soon with a garage/workshop and I'll have more room to do wrenching. Right now, I'm doing oil changes and random maintenance out in the driveway which is okay (at least now that I've settled on an annual schedule where I do it in the fall in order to not find myself changing oil during the winter). The real estate market isn't too exciting though like everywhere else so we'll see.

I find this area beautiful. I think my wife was still on the fence until she was out on the lake on a boat and got that impression of the area. If we could have a bunch of tiny islands (we have some but nothing like some other areas) it would be even better but it's hard to complain. I did a bad job of getting out on the water with our own boat last season (dragged out some maintenance which I still have to finish, which reminds me I should go get it and start sooner than later). Hopefully, this season I'll put the small sailboat we have on a mooring and focus on having it usable. I have a slight worry it'll sink due to taking on water but it does seem to drain well so the odds seem good. It's just been a trailer boat its whole life so putting it out on a mooring is going to be interesting. But that should solve the whole "put up the mast" and "take down the mast" chore which is a big pain if you just want to go use your boat for a bit. But I've digressed quite a bit here so I'll stop talking about boats.

[SavingWithBabies]

Progress: 72.5% ($870,000 / $1,200,000)

We welcomed child #3 into the world recently. My wife and baby are both doing well which is great.

I'm getting my first COVID vaccine shot next week. My wife is going to get hers a couple weeks later. So at least if one of us is feeling terrible, the other can watch the kids.

Not all great news as had some setbacks (problem with a tooth, dropped my phone hours ago and cracked the screen, probably loosing a customer on the side project, etc). But all relatively small things in the big picture except maybe the tooth (really hoping that goes back to normal without extensive dental procedures).

[SavingWithBabies]

Hit $900k net worth for the first time today! Payments started coming in on the contract work and stock market is up.

[Laura Ingalls]

Congratulations on the new little one.

Congratulation on the job ending too. DH always says never need work more than it needs you.

[SavingWithBabies]

@LI Thank you! I like your DH's saying. Looking back, I definitely see choices I could have made (but didn't) that would have taken me down the path of my needing work more...

[SavingWithBabies]

Progress: 79.2% ($950,000 / $1,200,000) minus some 1099 taxes

Had a good month with the market up but also had an early payment on contract work due to a billing change along with dividend payout from the side project.

Still enjoying being a contractor although the place I'm at wants me to hire on. I think I can put them off for a while though and keep stuffing the solo 401k. I think the real issue is they don't want to lose me. But I cleared up that I wasn't going anywhere and I was happy with the somewhat disjointed project with interesting technical problems.

On the crypto coin mining front, I'm up to ~$650 worth of Ethereum so my gaming PC GPU has long since paid for itself even with the cost of electricity. I'm not sure how much longer I'll mine though as it's starting to get warmer here and it is like a mini office heater. It's also a bit noisy with the fans on high to prevent excessive wear to the silicon chips (mostly memory controller).

[SavingWithBabies]

No update on the SPAC thing with the potential payout from a former client. They always seem to be a step or two behind on things. I'm reading grumblings about the government cracking down on SPACs. So they'll probably get it figured out and then it'll be too late. It'll be interesting to see how it plays out. I'm not counting on anything so it's just a bonus if anything ever comes.

That was my first contracting work at a decent rate and it was a great experience in many ways (it had downsides too of course). It was also the most speculative. Thankfully later clients have had more normal projects.

[SavingWithBabies]

I realized I should have had a better first post to this journal reboot way back when so I updated the first post to include:

Brief intro:

- I have sole income for household so my numbers are for both my wife and myself plus we have kids (3 as of 2021)
- goal of $1.6M was lowered to $1.2M at one point but I later realized it's probably more $1.6M -- the actual number doesn't seem to mean too much in a sense so just working toward $1.2M and then going to set more goals
- software developer who mostly enjoys contract work with full stack including web and mobile development
- interested in business aspects around software
- tend towards enjoying a lot about my work but not enjoying the business structures typically in place around it
- probably spend too much time working and not enough exercising and/or doing outdoors activity although moved to an area that makes those things much easier to get to