Howdy 2020 cohort, what a freaking weird year this has turned out to be so far!
Normally I write monthly highlights; switching gears to quarterly:
- Portfolio stress test EXTREME continues ... we've all felt the consequences, no doubt. Coming off a great 2019, the Q1 of 2020 was a rude awakening for most of us. Glad to say that we've maintained our savings & giving targets, and aren't down nearly as much as we could have been. As has been mentioned in the past, we'd been in a mode of taking profits and dialing back risk. Thankful to have the opportunity to withstand this downturn with modest damage, and are actively starting to deploy dry powder to get to our longterm AA target. Currently at 35/65, targeting 80/20 by EOY 2020. A silver lining to this whole terrible mess should offer long term investors a decent entry point.
- I truly hope all here are doing OK, staying as healthy, safe & sane as possible during these trying times. Our mantra has been to stay "sober, yet peaceful" as we've learned to navigate the new realities (some temporary, some permanent). Sober to the fact that this is a really difficult & scary time for many, yet peaceful to the reality that we are not in control and can only make the best decisions we can for ourselves, families and those close to us. This too shall pass! My hope is there will be good things, necessary changes, and opportunities that arise from even a terrible situation as this one. I do still carry anxiety about how this might affect older, at-risk family members and for those working on the front lines. Ugh, it's just a lot, and I hope you all are OK.
- Travel was a big part of our 2020 plans, and lots has changed. We were able to make an incredible trip to Turkey in Feb before all this came about, but we've also cancelled a few trips that were scattered over the spring. Business travel also has ground to a halt ... so we are evaluating whether a road trip is in order (primarily to go help out my aging parents who are locked down and pretty limited). Every week our plans seem to evolve, which sort of drives me crazy as a planner. We'll probably be hunkered down at home and/or only do road trips until the fall, it seems.
- Remote working has been possible for both of us, thankfully, and the last 3 weeks have taught us a lot as to what that could look like in the future. We'd been discussing and evaluating an FI model whereby I try to maintain the possibility to work remotely in our dream FIRE location. Given the economic hits + the forced remote work, it's becoming more and more likely that this may be what unfolds for 2021. Taking it month by month, but that very well may become the interim step between FI and FIRE for us.
- At the end of 2019, our NW progress covered: a paid-off FIRE home, fully-funded FIRE lump sums (for giving, home renovation, new car, etc.) as well as a WR of 4.1% based on our target annual spend (living expenses, taxes, home maintenance, travel, healthcare, etc.). The first quarter of 2020 proceeded to take a ball peen hammer to that progress!
- Here we are, as of 01-APR-2020, our NW progress covers: a paid-off FIRE home, fully-funded FIRE lump sums, and a WR of 4.7%. Two ways to look at this - really disappointing, or wow, not as bad as it could have been! All-in-all our NW decreased 9.1% during Q1, reflecting the conservative AA we'd moved to and our continued savings rate.
- Countdown: Assuming monthly progress remains on par with our historic averages, we now project to reach our FI goal of a 3.75% WR by Q4-2021 ... this is a 1-year delay!! My office whiteboard countdown tracker now shows 11 months left before our previous FIRE target timing of Q1-2021, but right now everything is at risk and up for discussion. Thankful to have options and flexibility in place.
EOY 2015 = 53.8%
EOY 2016 = 67.8%
EOY 2017 = 75.5%
EOY 2018 = 81.6%
EOY 2019 = 94.1%
// FI target defined as 3.75% WR, mortgage-free + lump sums funded //
END OF MONTH PROGRESS:
JAN 2020 92.9%
FEB 2020 89.7%
MAR 2020 85.6%
We've come up with our dry-powder deployment plan for 2020, and otherwise are focused on doing our part to limit the spread of COVID-19, keep finding ways to enjoy life and make the best of it. Things have to get better from here, don't they? :-)
FIREby2021