A Year Later ….

This blog was born about a year ago and man, have things changed since! I have been thinking about how much harder it was to get to the first $100- $200k compared to how much faster things seem to be moving after we crossed the $300-400k line. Granted, our journey is a little strange as we kept taking random time off work and spending a lot of what we saved but, the end result in terms of asset accumulation is still is pretty interesting.

Obviously our strong focus on FIRE for about 1.5 years now, much larger dual incomes after a period of unemployment and work breaks have helped as much as the incredible market ride as of late which has propelled this forward. It does make it super fun to see that even small gains amount to a lot more $ these days compared to even last year. I have to remember to breath when it does the same when market decides to explore negative territory :).

Let’s revisit what I wrote a year ago, when the FIRE dream was just starting:

As of August 2016, our investable assets stand at $335k. I guesstimate that about $200k of this came from our savings from 2001 until 2009. We did not save anything from then until about 2012 really, the rest was saved from late 2013 to today. Our 529s ended 2015 with about $5k. Today (August 2016) we have a combined $26k balance for both kids, much of which was added this year as we started a super funding strategy.

A Year Later…

Assets: Liquid assets stand $525.2k. It is strange to see the market still going up and I keep reminding myself to stay the course when/if the correction comes. Our home has about $135k in equity assuming about 10% expense costs between real estate fees and random taxes, so total net worth is about: $660,000. Woot!

It is crazy to look back and see that exactly a year ago – August 2016, our assets stood at $335k – that is $190k dollars difference in one year! Check out this progression, feels almost surreal (liquid assets only, excludes 529s – those we count separate as money we won’t have available):

  • 2001 – 2009: $200k (8 years!)
  • 2009 – 2016: $335k (7 years to add an extra $100k+)
  • 2016 – 2017: $525K (1 year, $190 added! yikes!)

Debt: $125.1k, still on track to end at $118k without issues.

529 combined: $54.7k combined. A year ago our combined balance here was $26k! Huge accomplishment especially given how much we also saved for our retirement.

Expenses YTD: $42.9k. It is going to be a nail-biter ending within the $75k or under goal as we have a few unaccounted for car related expenses and a few other things to consider. I remain cautiously optimistic.

Lastly, I poked around the Social Security Website to figure out what my expected benefit would be if I worked for 8 – 10 more years, assuming the thing can still pay 100% of benefits. I figured it would be something like $1,800 per month or slightly more, which is not bad, especially considering that I am assuming best case scenario we get 60% of that or really (and what I actually base my FIRE plan on), nothing at all. Still fun to poke around with the numbers. 🙂

Hope your year is going well but most importantly that you are out there LIVING!

How are things going with you? At what point in your savings did you start feeling like things were really snowballing? How long did it take you to make each $100k?

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2017 Life Goals

2017

The beginning of this year proved to be one of the most difficult and crazy times for me at a personal level.  It got so bad that I finally decided to tackle something I had not done before – unclutter fully at an emotional level, figure out who I am and what I want, then rebuild from the inside out.

And so I began a journey of inner exploration and created a holistic life plan. I defined success for me along with my priorities. I then matched that against how I actually spend my time and energy and aligned accordingly. Then I began breaking down the plan in pieces and tackling it head on!

To learn more about this process and a ‘how to guide’ on how to do something similar yourself, go here.

And so, for 2017+, my life plan and focus will be on the following areas, with the caveat that I reserve the right to change my mind at any moment:

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This hard work and focus has paid off substantially; I have never experienced such personal transformation! I am probably in the most peaceful (light!) and happy place I have ever been in decades. Of course there are always ups and downs, but I feel I now have the tools and habits to keep me going.

Interested in following my progress? Start here.

 

 

Resources

Summer 2016.

Travel Resources:

Here are a great list of travel blogs and sites that you may enjoy in regards to traveling, specifically with a family.

Want to learn about points and miles? Check out Million Mile Secrets and The Points Guy.

Overwhelmed with credit card/miles and don’t know where to start? I started with Marriott Card (best benefit is 7 nights + x amount of miles to most major airlines), Chase Sapphire Card and Starwood American Express (not sure how much longer this one will be around). These seemed the most flexible for me until I learned more.

Hotels.com and Rocketmiles.com for hotel reservation if you are not using a specific travel rewards card or hotel chain.

Car rental? Try  Autoslash.

Different ways the world talks about Continents. The 5 to 7 Continent models.

College Planning:

If you are just getting started investigating 529s and general cost of college, I encourage you to start here. Probably the best site I found so far. It helped me a lot with my initial planning.

Financial Independence:

Getting started on your own path to financial independence? I encourage you to watch this eye opening PBS documentary called The Retirement Gamble. Then, take a read through these articles, which I re-read often for encouragement. Why “Earn More” vs “Save More” Is The Wrong Debate, The Shockingly Simple Math Behind Retirement, Zero to Millionaire in Ten Years, How We Reached Financial Independence in Our 30s, and A Millionaire Is Made 10 Bucks at A Time.

The blogs that I mention here are the ones I most often read regarding early financial independence.

For a very simple how to guide for saving and investments, I really love this The Simple Path to Wealth. I particularly love that he is writing this to leave as a manifesto for his daughter. He also writes about rent vs own issue very eloquently. Another excellent article on rent vs buy by Afford Anything blog here.

The Mad Fientist is also filled with all sorts of great information and tools. And this blog post on The Road to financial independence is a great read.

Financial Management:

I use mint.com to track my day to day spending and Personalcapital.com to track my investments and assess my 401k plan fees.

As for investing, I am partial to Vanguard index funds.

Simple yet effective interest calculator.

Inflation calculator.

Teaching kids about money resources

College

Don’t let schooling interfere with your education.” – Unknown

College. Is it necessary? No. Is it preferred? Yes.

Despite the ever increasing costs, I still think college is a great experience that most people would appreciate and benefit from (if they can do it with little to no debt!) and still give them a much better probability of having a “successful” (read: higher income) career. I will encourage (but not force) my kids to go to college or study anything in particular. All I ask is that whatever they choose to do, they give it their best.

But have you seen what it costs these days and worse, what it is expected to cost? The shock to my system was so bad that I immediately started searching for alternatives like sending them abroad for free study...Germany, free for Americans to study? In English? I can live with that.

Once I got a little over my shock and started to think through this in more practical ways, I sat down with my husband to device a plan of attack.  Having over a decade to college, this is really hard to plan. What if they don’t even go to college?  Over-funding a 529 would not be that fun then. At the same time, not planning at all and then having my kids want to go to college and having to borrow crazy amounts of money is not cool.

I go back and forth about how much to save for them and with which vehicle. For right now we chose 529s, and we will revisit as the years go by. Of course, the larger part of the plan involves brainwashing our kids into looking at cheaper options for completing their degree – be it scholarships, community college first then transfer, take AP credit classes in high school and graduate early, go to in-state college, go abroad where it is cheaper (or free, like the Germany example above), etc.

Totally appropriate parenting, right?

Follow our college goal here and progress here.