I've only recently discovered this whole subculture of FIRE having stumbled upon MMM via his Tim Ferriss podcast interview. I've been kind of obsessively running my numbers for a few weeks now to see if I'm potentially able to FIRE in the not-too-distant future and... I think I just might be!
I recently took the time to change my investment mix, moving out of some actively managed funds and into index funds. I invested some idle cash. I ramped up funding of a Roth IRA.
Now 2022 is looking like it could be my year. My struggle is going to be reducing my spending. I've done a pretty good job (by normal standards, not by Mustachian standards) in the savings category and so I now have a 'stache of around 800K + ~140K home equity (remaining mortgage of 120K). I have a savings rate of around 36% (low by Mustachian standards, I know). My spending is about 50% discretionary (restaurants, mostly) but it will be a hard habit to break.
I live in a LCOL area (TN) so my expenses could be pretty low. I'd love to have my home paid off in 5 years to reduce my spending needs.
I'm single w/no kids so I only have to support one person (so long as my mom's $ lasts for her retirement, which it probably will, fingers crossed).
My spending goal for post-FIRE is around 47K/yr so I'm hoping to have my 'stache at the 1.2M level by 2022. That seems to be where things are headed assuming average returns over the next 5 years (7%). There's also a lot of fluff built into that 47K figure, so plenty of room to adjust if needed.
If everything falls into place and I pull the trigger in 2022 at 52 years of age, I should have around 260K in taxable accounts to draw from and 950K or so in retirement accounts. Some reading over at the Mad Fientist site enlightens regarding the access to retirement account funds to bridge the post-FIRE to 59.5yr gap, so I think that would be doable.
Like so many of us here seem to be, I am a software engineer. I realize how fortunate I've been in having such a cushy job. I don't even work that hard, to be honest. I'm very effective at my job, don't get me wrong, but for the past couple of years I've been pretty good at keeping it at the 40 hour limit. But I'm getting burnt out on it after 23 years. The job has also changed so much in the past 5 years here at my company (Fortune 500 company). The whole culture is now quite different due to all of the outsourced development and support. It is a constant source of frustration (and a teensy bit of angst).
My recent research into the world of FIRE has clued me in on the fact that financial freedom is at my fingertips. That makes my job both less frustrating and more frustrating. Less so because I don't have to think so long term anymore regarding my career. I don't need another promotion. I don't have to play the political game. I can be more honest and open about issues. But also more frustrating because I can see the end, so close... yet not quite here.
So this is my one year post-iversary!* How has the plan been going over the past year? Well, let's see...
A couple of things from my initial post can now be revised. First, my savings rate has improved. At the time of my first post, I had approx a 36% savings rate. I ended 2017 with a 49% (post tax) savings rate and so far in 2018 I'm actually at 59% (I include mortgage principle in that calc). So that's a win and works the needle in the FI sooner direction. My spending has reduced just a little bit (maybe 8% so far). I do plan to take a couple of short trips later this year, so that might get me closer to last years spending.
My net worth has increased by $143K since this first post and I became a millionaire, which is also good. That also works the FI needle closer to now.
I no longer intend to pay off my mortgage in any hurry. I've read lots of the posts in these forums about the issue and the math seems to be solidly in the 'keep your mortgage' category. Since I've got 12 more years on my 3.75%, I think I'll stay the course and just pay it off on the normal schedule. I may move before then, anyway.
Now that I am tracking my spending more closely, I have revised my target RE spend upward. Now, I realize that there are many on the forums who rightly point out that MMM is all about finding sufficiency (nay,
bounty) in low cost living. I get it. We bigger spenders are dragging up the average on the boards, but we're doing better than we would have without the MMM influence. So while my 2017 self used 47K as my expected RE spend, I'm now looking for something more around 60K. Frankly, healthcare costs have me a little freaked out. Where I live, right now the ACA plan at the Silver level with no subsidies would cost me around 8K/year. It's only going up. I'm expecting to need 10-12K/year when I
start my RE life. Trying to predict this is almost pointless, but clearly all signs point to 'more expensive'.
Increasing my target RE spend obviously moves the RE needle away from now.
Now that my stash is adequate to provide for me in a 'skinny FIRE' scenario, I do feel somewhat liberated at work. I find myself being less obliging to early meetings, pointless conference calls, etc. While my job has never been bad by most standards, I chafe at the fundamental reality of being someone else's servant. I don't want to work their schedule. I don't want to be on call in the middle of the night. I don't want other people's crappy work to reflect on me. And I don't want to have to plan my life around being in a cubicle 5 days a week. Having more financial resources takes a little bit of the edge off of that, since I know that I could walk away at any time. But I also have to check myself sometimes because I'm not yet where I want to be when I pull that trigger.
All in all, I see myself still on target for a 2022 RE. I still extrapolate my stash will be somewhere in the $1.2-1.3M range at that point. I have a small pension that kicks in at 60, which should reduce my WR by almost 1.5 percentage points. FIRECalc has me at 100% historical success with my current numbers.
Will I have the guts to really pull the trigger in 2022? I don't know. It's too far away to be real just yet. Of course, 20% of my 5 year horizon from first post has now slipped into the past, and it didn't seem to take very long.
I think my finances are pretty much in snowball mode at this point so the most important thing I need to be doing now to prepare myself for RE is finding new hobbies, interests, and friends that I can spend my time with post-FIRE. I think this is the most likely stumbling block for me come 2022. I couldn't retire today if I had the money, because I'm not mentally and socially prepared. I've got to focus on getting that part in order.
Next year, I will be the same age as my older brother was when he died unexpectedly. He left behind so much. He was a wealthy man and I'm sure he thought he had decades ahead of him to spend with his family. He didn't. He was 49.
This year, a colleague at the office died at 54. He wasn't wealthy (he was almost a caricature of a spendy-pants), but I'm sure he too thought he had decades ahead of him. He didn't.
My father died a few years ago. He had retired relatively early at 54. He could've worked just a year or two more and made lots more money, but he finally just had to get out. He and my mom were well off, though the tech bust in 2000 really hurt their retirement stash, but they adjusted and managed. Dad had time to decompress from a high stress job which mellowed him dramatically and he was able to really improve his relationships with the rest of the family. He was able to spend years cruising with my mom on their boat and then travelling the country in an RV. They made friends all over the place. I'm so grateful that he had the chance to retire and enjoy life. I hope to follow his example and leave the workforce while I'm still young and healthy enough to enjoy the best parts of life.
Hope everyone else has made good progress on your goals for the past year and I look forward to the final stretch!
*close enough