Rosy, your numbers for 2018 are looking amazing! Almost 10k already :)
I have a question about FI, and if I'm being nosy just say so! Are you FI because your retirement income is more than expenses? The reason I ask is because i go back and forth on whether I could be considered FI. I have minimal savings and small net worth, but my "passive" income is more than my expenses minus daycare. But that income could decrease, my expenses could increase, etc. etc. At what point exactly is someone considered FI? Sorry I know this is a bit off-topic.
Ha, 2018 was sheer savings grit so far, so yes I'm proud I made it to almost ten. Dang, now that you put it that way:) I feel compelled to come up with another $117 just to move past that 10K number.
@MommyCake - about the FI
FI can be a rather squirly number since everyone's sense of security, skill set and resources are different. It's not that easy to trust the numbers IRL:)
I think you are right to be wary of barebones FI, knowing there is still a certain amount of risk in relying on your current income stream to say I am FI without reservation.
At its simplest FI is nothing but an income replacement for the amount of money you need to be comfortable each month. If you did fine with X and had only X in savings/EF - why do you think that would change significantly? and if it did, what options do you have?
Fear of miscalculation is normal - so put it to the test say for six months to a year and then you know:)
I suppose you could apply the 25 times your annual income formula as the barebones starting point for permanent FI (without ongoing income streams), same as for fire/fu money. Maybe I'm confused too, but if your passive income stream(s) cover your expenses and you have (enough) savings and can continue to work on your NW to increase your stash along the way - then - other than shoring up your savings to one year of living expenses (I like to be cautious) I'd say congrats - you are FI:)
There were some big FI discussion threads last year on the Welcome thread, a fair number said they wanted at least 500K to 750K to consider themselves barebones FI - towards retirement.
I consider myself FI, because I now have four sources of income for life, plus health insurance for life. I found MMM around the same time that I applied for SS. By then I had already decided that since I lived without that SS income all along, I'd make it count and use it to fix my financial life.
For me SS turned out to be a gamechanger.
SS gave me the opportunity for a last-ditch effort to become FI again for the second time in my life - I already was FI way back in my early forties with a paid for house and rentals and a much better income than I have today.
I lost it all and came back to the states with nothing but two suitcases, starting over at 48 - so you know I don't really believe in financial security, it is an illusion - too easily destroyed.
For me, my $37K income means FI. It is the total after all deductions like taxes and medical insurance premiums. If one day they cut SS or it disappears altogether it still wouldn't kill my budget since I don't plan to fully integrate it into my living expenses ever.
Once this $50K savings goal is reached I'll be relieved - as far as I am concerned it can stay on ice forever or be used if Mr. R. is laid off before he is ready to retire.
His income with bonus is around $40-42K so the $50K represents well over one year of his income. Mr. R. is FI as well at $500K it is barebones, but with his $10K cash savings and a paid off annuity that he can start drawing from at any time - it will work just fine.
The other investments and 401K would not need to be touched until we want to.
So not riches, but it is FI for us - if he got laid off tomorrow we have $40K between the two of us right now in sludge funds, EF and savings. He can collect unemployment and draw from his annuity and take his time looking for something suitable.
Having a paid off house and being debt free (even our two car loans will be gone in a year) is a huge plus.
For now, this is our plan and I'm sticking to it. Always STC:)
It also helps that we are 20 min from the best white sand beaches in the country - any evening we choose can become a walk into the sunset, holding hands - sipping whatever ... just look for the big orange hat and sparkly flip-flops.