Hey 2020 people! Putting the wraps on 2016, by most counts it was a good year. We started in earnest on our FIRE journey in 2015 after years of so-so habits, and shifted our sights to April 2020 as our target to FIRE from the corporate world and move to our "dream" LCOL location.
Notable 2016 accomplishments:
Savings Rate = 65.5%
Giving Rate = 12.5%
/// Rates relative to net income after taxes ///
EOY 2015 FIRE Progress = 51.8%
EOY 2016 FIRE Progress = 65.2%
/// FI defined as 3% SWR and mortgage-free ///
Notable 2017 adjustments:
As noted before, our SWR target has been too conservative. Rather than a 3.0% SWR, we have adjusted to a target of 3.5%. This appears to appropriately cover our personal scenario, considering our 1) 50-year time horizons, 2) desires to leave a portion of our nest egg behind, and 3) current elevated equity valuations.
Our target FIRE nest egg total has been revised downward, includes the following components, and is still conservative:
1. 3.5% SWR nest egg (100% equity allocation)
2. Home Equity in LCOL location (i.e., no mortgage)
3. Cash Fund (covering 1.5 years expenses, transitioning from HCOL to LCOL location)
4. Donor Advised Fund (100% equity allocation) for future charitable giving (tax-efficient vehicle)
These updates, along with softening the SWR from 3.0% to 3.5% changes our "countdown" percent progress toward FIRE to:
/// EOY 2016 FIRE Progress = 70.9% ///
Our key goals for 2017 include:
1. Sustain (or beat) a savings rate of 65.5%
2. Allocate 100% of existing investments into equities by EOY (we took some off the table at SPY $226.50)
3. Demonstrate proof of concept for future side hustle
4. Implement Donor Advised Fund, begin funding
5. Travel to LCOL for our 2nd visit, to continue our recon work
Happy New Year!
FIREby2021