Poll

What's your CURRENT % of your Target Passive Income as of now?

< 0%: I'm Bleeding Money
0 (0%)
0 to 5%
10 (6.5%)
5.01 to 10%
8 (5.2%)
10.01 to 20%
14 (9.1%)
20.01 to 30%
11 (7.1%)
30.01 to 40%
15 (9.7%)
40.01 to 50%
10 (6.5%)
50.01 to 60%
16 (10.4%)
60.01 to 70%
12 (7.8%)
70.01 to 80%
7 (4.5%)
80.01 to 90% and FIRED
3 (1.9%)
80.01 to 90% and NOT FIRED
9 (5.8%)
90.01 to 100% and FIRED
1 (0.6%)
90.01 to 100% and NOT FIRED
6 (3.9%)
100.01 to 110% and FIRED
5 (3.2%)
100.01 to 110% and NOT FIRED
6 (3.9%)
110.01 and up, and FIRED
10 (6.5%)
110.01 and up, and NOT FIRED
9 (5.8%)
FIRED, other %
2 (1.3%)

Total Members Voted: 154

Author Topic: Race to 100% FI! (With a Poll added to track your progress!)  (Read 3883 times)

diapasoun

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #50 on: October 03, 2019, 02:51:54 PM »
I am at a whopping 6.5%... but that's up from 2.9% earlier this year. Chug chug chugging along! One day I too will benefit from crazy compounding. ;)

Loren Ver

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #51 on: October 08, 2019, 06:44:49 PM »
@ysette9 Thank you.  Going from making way below median household income to above while knocking out the copious student loans really changed the slope of our graph.  The bull market helped too :).

bbates728

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #52 on: October 09, 2019, 09:52:38 AM »
I am at about 4% FI which is up from -4% last year. Seems....slow.... On the other hand, that represents $80k difference and little to no compound interest.

SwordGuy

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #53 on: October 09, 2019, 03:58:35 PM »
I am at about 4% FI which is up from -4% last year. Seems....slow.... On the other hand, that represents $80k difference and little to no compound interest.

That is AWESOME!!! 

That's a double-whammy of awesomeness!   No only did you go up 8% (with no compounding), but you went from negative to positive!

ScreamingHeadGuy

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #54 on: October 09, 2019, 06:54:17 PM »
I am at about 4% FI which is up from -4% last year. Seems....slow.... On the other hand, that represents $80k difference and little to no compound interest.

The first few years, when compounding interest is negligible compared to your input, is bound to be slow. 

But you’ve made an awesome step - from negative to positive net worth.  Think how much better off you are than so many other people and be thankful. 

SwordGuy

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #55 on: October 10, 2019, 06:37:30 PM »
So far, 59.1% of respondents are halfway (or better!) to FIRE.

Ynari

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #56 on: October 11, 2019, 08:41:28 AM »
We got above 0 about a year and a half ago (~March 2018). Back of the napkin math, we're at about 6%?

I feel like I've been on this road forever, and that's a sad percentage to have, but in reality we got our first "real" jobs in the last 2-3 years and had to dig out of a lot of student loans. So I appreciate all the support for the early days on this thread - gotta get compound interest on my side!

bbates728

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #57 on: October 15, 2019, 08:25:57 AM »
@SwordGuy and @ScreamingHeadGuy

Yeah you both are right. I know that it is moving quickly. It just sucks still having to sit chained watching the shadows on the cave wall while knowing there is an outside (Plato's cave).

SwordGuy

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #58 on: October 15, 2019, 09:09:52 AM »
@SwordGuy and @ScreamingHeadGuy

Yeah you both are right. I know that it is moving quickly. It just sucks still having to sit chained watching the shadows on the cave wall while knowing there is an outside (Plato's cave).

One of my favorite t-shirts says "Plato's Cave Search and Rescue Team" on the front.  On the back it says, "Bringing people to the light since 380 BCE."     (Actually, I'm not going to go look up the exact year it says, but that's close enough to get the point. :) )

Damn near no one gets it.  :(

monarda

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #59 on: October 16, 2019, 05:53:32 PM »
I'm going to have to figure this out before I answer the poll. I like this way of thinking better than those races you mention (I participate in two of them right now, depending on what's included).

I might say 80% and I might say 60%.  Or some other number. It depends on how I look at things. I'm still feeding my retirement accounts, but I guess I can consider the current balances and what I'd take out at 4% SWR and then include rental income and pension.

Posting to remind myself to get back to this.

SwordGuy

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #60 on: October 16, 2019, 06:50:24 PM »
I'm going to have to figure this out before I answer the poll. I like this way of thinking better than those races you mention (I participate in two of them right now, depending on what's included).

I might say 80% and I might say 60%.  Or some other number. It depends on how I look at things. I'm still feeding my retirement accounts, but I guess I can consider the current balances and what I'd take out at 4% SWR and then include rental income and pension.

Posting to remind myself to get back to this.

Let's pretend that Joe has a target FI number of $50,000 per year.   He's 41 years old and plans to retire at 46, 20 years before he's going to take his social security.

He has a 70/30 stock/bond stash worth $200,000.   He's going to use a 4% withdrawal strategy, so that's $8,000 in income.

He has a rental property worth $50,000 that produces a profit of $5,000 a year.   He won't be selling it.   His running total of FI income is $8000 + $5000, or $13,000.   

He has $12,000 in royalties coming in from some material he wrote that is likely to last until he's 66, when his social security kicks in.   That puts him at $8000 + $5000 + $12000 or $25,000.

He has $50,000 stock that his employer gave him as a bonus but it doesn't vest for 3 more years of employment.   That would be another $2000 per year but it's not vested and there's no guarantee it ever will vest, so it's worth nothing today.   So, he's still at $25,000 in FI income.

He has a house that's worth $500,000 and which he owes $100,000 on, giving him $400,000 in equity.   When he retires he plans to sell this house and buy another one for $100,000 cash.   That means his FI stash will grow by $300,000 or another $12,000 a year.    I would count this in Joe's FI total even though the house hasn't been sold and the real estate market might go down for a few years.   Before Joe pulls the FI trigger and quits, he'll have checked the market and made sure those numbers are still solid, or he might even sell first, then go FI.  So, $25,000 + $12,000 puts Joe at $37,000, or 75% of FI.

Pensions are sort of between the unvested stock and the unsold house example, depending upon how they are structured.  Some can be cashed out early at a reduced value (which makes it easy to calculate the FI dollars for), others are all or nothing.   If I had an all or nothing pension, I would track two FI percentages, one with the value at $0 and the other pro-rated based on the proportion of time put into it.  Example, a military 20-year pension is an all or nothing pension.   So, if I want to know, "How much of my FIRE expenses could I cover if I left the Army today", that pension would produce $0.   If I was 15 years into earning that 20 year pension, it's value will technically $0 until the first day of the 20th year.   But, I might also consider it worth 15/20 or 75% of that pension value in my second calculation.  The second calculation gives me a better view of how my plan is currently working out assuming my plan comes to fruition.

For answering the poll, the all or nothing pension would be worth nothing.

monarda

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #61 on: October 16, 2019, 07:46:17 PM »
I'm going to have to figure this out before I answer the poll. I like this way of thinking better than those races you mention (I participate in two of them right now, depending on what's included).

I might say 80% and I might say 60%.  Or some other number. It depends on how I look at things. I'm still feeding my retirement accounts, but I guess I can consider the current balances and what I'd take out at 4% SWR and then include rental income and pension.

Posting to remind myself to get back to this.

 <snip>

He has a rental property worth $50,000 that produces a profit of $5,000 a year.   He won't be selling it.   His running total of FI income is $8000 + $5000, or $13,000.   

<snip>

He has a house that's worth $500,000 and which he owes $100,000 on, giving him $400,000 in equity.   When he retires he plans to sell this house and buy another one for $100,000 cash.   That means his FI stash will grow by $300,000 or another $12,000 a year.    I would count this in Joe's FI total even though the house hasn't been sold and the real estate market might go down for a few years.   Before Joe pulls the FI trigger and quits, he'll have checked the market and made sure those numbers are still solid, or he might even sell first, then go FI.  So, $25,000 + $12,000 puts Joe at $37,000, or 75% of FI.

<snip>


I'm not sure what to do with the rental equity. We don't plan to sell for a while, but eventually (many years into FI) we probably will. So do I  add the amount of equity to the cash assets? If I include the net rental profit and then I add back the principal that we pay each month I get a very different number than if I don't. Loans will be paid off in ~10 years. I could consider that amount? Different ways to look at this.

SwordGuy

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #62 on: October 16, 2019, 08:44:43 PM »
I'm going to have to figure this out before I answer the poll. I like this way of thinking better than those races you mention (I participate in two of them right now, depending on what's included).

I might say 80% and I might say 60%.  Or some other number. It depends on how I look at things. I'm still feeding my retirement accounts, but I guess I can consider the current balances and what I'd take out at 4% SWR and then include rental income and pension.

Posting to remind myself to get back to this.

 <snip>

He has a rental property worth $50,000 that produces a profit of $5,000 a year.   He won't be selling it.   His running total of FI income is $8000 + $5000, or $13,000.   

<snip>

He has a house that's worth $500,000 and which he owes $100,000 on, giving him $400,000 in equity.   When he retires he plans to sell this house and buy another one for $100,000 cash.   That means his FI stash will grow by $300,000 or another $12,000 a year.    I would count this in Joe's FI total even though the house hasn't been sold and the real estate market might go down for a few years.   Before Joe pulls the FI trigger and quits, he'll have checked the market and made sure those numbers are still solid, or he might even sell first, then go FI.  So, $25,000 + $12,000 puts Joe at $37,000, or 75% of FI.

<snip>


I'm not sure what to do with the rental equity. We don't plan to sell for a while, but eventually (many years into FI) we probably will. So do I  add the amount of equity to the cash assets? If I include the net rental profit and then I add back the principal that we pay each month I get a very different number than if I don't. Loans will be paid off in ~10 years. I could consider that amount? Different ways to look at this.

When you're calculating these numbers, it's very important to know exactly what you want to know, because that governs what numbers you include in your calculation.

In this case, we have a target income we are aiming for and we want to know how close we are to being able to provide that income after FI.

So, let's say I have two assets that I won't or can't sell and can't tap for equity, that each provide me with an income of $5,000 a year ($10,000 combined).   It literally doesn't matter whether those assets are worth $1 or $5 bazillion dollars because -- drum roll -- they won't be put up for sale.   Let's say one is worth $50,000 and the other would be worth $500,000, we own them free and clear, and there are no costs to sell them (i.e., taxes or realtor fees).   For purposes of this specific example of this %FI income calculation, they are exactly equal.

Now, let's remove those restrictions on those two assets.   They are no longer exactly equal for this purpose.   

Asset one could be worth $5000 a year in direct income or it could be sold and translated into a stock/bond portfolio that would shed $2000 a year using the 4% rule.   In this case, selling is crazy talk.

Asset two could be worth $5000 a year in direct income or sold for $500,000, which could be turned into a stock/bond portfolio with an income of $20,000 a year using the 4% rule.  In this case, sell, sell, sell!

But this next point is important -- for purposes of this calculation, the asset is EITHER producing direct income for owning it OR is turned into some other asset that produces direct income.  It can't be counted BOTH WAYS at the same time.   

You can pick either one you want, but you can't pick both.

The next point I'll bring up is you mentioned selling them well into FIRE.  In that case, since the calculation we're putting together is SOLELY for the purpose of knowing how close to being FI we are, it's a moot point.  For purposes of this calculation, you've chosen to value them for their direct income.

Does that help?

monarda

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #63 on: October 16, 2019, 09:26:46 PM »
I'm going to have to figure this out before I answer the poll. I like this way of thinking better than those races you mention (I participate in two of them right now, depending on what's included).

I might say 80% and I might say 60%.  Or some other number. It depends on how I look at things. I'm still feeding my retirement accounts, but I guess I can consider the current balances and what I'd take out at 4% SWR and then include rental income and pension.

Posting to remind myself to get back to this.

 <snip>

He has a rental property worth $50,000 that produces a profit of $5,000 a year.   He won't be selling it.   His running total of FI income is $8000 + $5000, or $13,000.   

<snip>

He has a house that's worth $500,000 and which he owes $100,000 on, giving him $400,000 in equity.   When he retires he plans to sell this house and buy another one for $100,000 cash.   That means his FI stash will grow by $300,000 or another $12,000 a year.    I would count this in Joe's FI total even though the house hasn't been sold and the real estate market might go down for a few years.   Before Joe pulls the FI trigger and quits, he'll have checked the market and made sure those numbers are still solid, or he might even sell first, then go FI.  So, $25,000 + $12,000 puts Joe at $37,000, or 75% of FI.

<snip>


I'm not sure what to do with the rental equity. We don't plan to sell for a while, but eventually (many years into FI) we probably will. So do I  add the amount of equity to the cash assets? If I include the net rental profit and then I add back the principal that we pay each month I get a very different number than if I don't. Loans will be paid off in ~10 years. I could consider that amount? Different ways to look at this.

When you're calculating these numbers, it's very important to know exactly what you want to know, because that governs what numbers you include in your calculation.

In this case, we have a target income we are aiming for and we want to know how close we are to being able to provide that income after FI.

So, let's say I have two assets that I won't or can't sell and can't tap for equity, that each provide me with an income of $5,000 a year ($10,000 combined).   It literally doesn't matter whether those assets are worth $1 or $5 bazillion dollars because -- drum roll -- they won't be put up for sale.   Let's say one is worth $50,000 and the other would be worth $500,000, we own them free and clear, and there are no costs to sell them (i.e., taxes or realtor fees).   For purposes of this specific example of this %FI income calculation, they are exactly equal.

Now, let's remove those restrictions on those two assets.   They are no longer exactly equal for this purpose.   

Asset one could be worth $5000 a year in direct income or it could be sold and translated into a stock/bond portfolio that would shed $2000 a year using the 4% rule.   In this case, selling is crazy talk.

Asset two could be worth $5000 a year in direct income or sold for $500,000, which could be turned into a stock/bond portfolio with an income of $20,000 a year using the 4% rule.  In this case, sell, sell, sell!

But this next point is important -- for purposes of this calculation, the asset is EITHER producing direct income for owning it OR is turned into some other asset that produces direct income.  It can't be counted BOTH WAYS at the same time.   

You can pick either one you want, but you can't pick both.

The next point I'll bring up is you mentioned selling them well into FIRE.  In that case, since the calculation we're putting together is SOLELY for the purpose of knowing how close to being FI we are, it's a moot point.  For purposes of this calculation, you've chosen to value them for their direct income.

Does that help?
Yes, thanks. :-)

Our rental expenses vary, so I'm basing the number just on this year's rental expenses to date. We did a lot of work on the properties so it's going to be a bit of a high year.  And we really aren't totally decided on our FIRE number, but for this poll say, let it be $50,000. Then we're at 64% or better (in a more typical year for rental expenses). Cool.
« Last Edit: October 16, 2019, 09:35:22 PM by monarda »

SwordGuy

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #64 on: October 16, 2019, 09:43:31 PM »
And we really aren't totally decided on our FIRE number, but for this poll say, let it be $50,000. Then we're at 64% or better (in a more typical year for rental expenses). Cool.
@monarda , 64% is awesome!   That's some real financial security and FU money right there! 

ardrum

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #65 on: October 18, 2019, 11:11:25 AM »
I'm around 40%+.  It's felt like quite a grind so far despite a friendly bull market.  Here's to hoping the next 40%+ goes along okay despite it possibly taking longer (I think it's bizarre how long the bull market has lasted lol). 

SwordGuy

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #66 on: October 18, 2019, 11:43:13 AM »
I'm around 40%+.  It's felt like quite a grind so far despite a friendly bull market.  Here's to hoping the next 40%+ goes along okay despite it possibly taking longer (I think it's bizarre how long the bull market has lasted lol).

If we have a recession and the market drops in value big time for a couple of years, it would certainly feel depressing feeling like your FI% just went downwards.

But if you just keep on investing during that time, when the market returns in a few years, you'll see your FI% skyrocket to higher than it otherwise would have been 'cause you've been buying stocks on sale!

So, an up or down market is good news for you at this point in your accumulation cycle! :)

Lucky Recardito

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #67 on: October 18, 2019, 11:57:34 AM »
10/1/2017: 15.5%
10/1/2018: 19.6%
10/1/2019: 22.9%

Weirdly, I feel farther along than this? FIRE has permeated my thinking, and I feel like I can clearly see where we're going. In any case, onward!

SwordGuy

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #68 on: October 18, 2019, 02:37:01 PM »
10/1/2017: 15.5%
10/1/2018: 19.6%
10/1/2019: 22.9%

Weirdly, I feel farther along than this? FIRE has permeated my thinking, and I feel like I can clearly see where we're going.

My guess?    When you reach 20+% FI, you can recover quickly from a whole lot of the dammits that life tosses your way.    What used to be a real problem is turned into a minor nuisance.    You can just cruise along and deal with it without fuss or bother.

In any case, onward!

That's the spirit!

OurTown

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #69 on: October 21, 2019, 12:40:16 PM »
57%. 

SwordGuy

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #70 on: October 21, 2019, 01:37:58 PM »
57%.

Oh, that's a sweet spot.    Lots of financial security when you hit 57%!   Way easier to roll with most punches!

Ladychips

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #71 on: October 21, 2019, 02:19:23 PM »
I've wanted to answer for quite a while but couldn't decide what my answer was.  Based on a few earlier posts, I've decided I'm at 48%.  This is based on the stash only, not the pension or the real estate.  In 21 months, I'll be at 100+% because I'll be eligible for my pension AND the rental properties will be paid off AND my stash will have (hopefully) grown.  Interesting thought exercise for me.  Thanks!

Lucky Recardito

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #72 on: October 21, 2019, 04:10:53 PM »
10/1/2017: 15.5%
10/1/2018: 19.6%
10/1/2019: 22.9%

Weirdly, I feel farther along than this? FIRE has permeated my thinking, and I feel like I can clearly see where we're going.

My guess?    When you reach 20+% FI, you can recover quickly from a whole lot of the dammits that life tosses your way.    What used to be a real problem is turned into a minor nuisance.    You can just cruise along and deal with it without fuss or bother.


I had a realization a year or so ago that if we were to save not another penny between now and traditional retirement age (we're currently in our mid-30s), we'd still be able to retire comfortably around 60 or 65, just through the power of compounding on what we have now. That's the sort of realization that makes one sleep better at night: it builds a ton of safety margin into our life TODAY that already makes many possible futures look at least reasonably rosy. 

SwordGuy

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #73 on: October 21, 2019, 04:14:04 PM »
10/1/2017: 15.5%
10/1/2018: 19.6%
10/1/2019: 22.9%

Weirdly, I feel farther along than this? FIRE has permeated my thinking, and I feel like I can clearly see where we're going.

My guess?    When you reach 20+% FI, you can recover quickly from a whole lot of the dammits that life tosses your way.    What used to be a real problem is turned into a minor nuisance.    You can just cruise along and deal with it without fuss or bother.


I had a realization a year or so ago that if we were to save not another penny between now and traditional retirement age (we're currently in our mid-30s), we'd still be able to retire comfortably around 60 or 65, just through the power of compounding on what we have now. That's the sort of realization that makes one sleep better at night: it builds a ton of safety margin into our life TODAY that already makes many possible futures look at least reasonably rosy.

So very true!!!

jojoguy

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #74 on: October 21, 2019, 05:15:41 PM »
14.8%

DadJokes

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #75 on: November 04, 2019, 10:04:28 AM »
Well that's depressing.

1.4% to 3.9% over the last 12 months.

Well, adding today's contributions makes it 4.0%. Woo...

4.63% today - 2 more months, and I can (hopefully) change my answer on the poll

SwordGuy

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #76 on: November 04, 2019, 12:08:00 PM »
Well that's depressing.

1.4% to 3.9% over the last 12 months.

Well, adding today's contributions makes it 4.0%. Woo...

4.63% today - 2 more months, and I can (hopefully) change my answer on the poll

That's good progress!   And it gets faster as time goes by, too, once the investments start to do the heavy lifting!

SwordGuy

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Re: Race to 100% FI! (With a Poll added to track your progress!)
« Reply #77 on: November 08, 2019, 07:15:29 PM »
148 poll entries so far!   

I would love to see a couple thousand!