Financial Independence Day

12

The inspiration of this writing comes from a post by EvenStevensMoney on Financial Independence Day, where he tracks the years at which bloggers are planning to reaching their Financial Independence. 50% self-motivation, 50% peer-pressure, 100% great idea.

The MM family plans to reach Financial Independence in 2022.

In a completely unoriginal fashion, I discovered the concept of Financial Independence through Mr Money Mustache, like I would guess another 1,253,304 people googling this topic.

This was almost 2 years ago. Long before that I already enjoyed keeping an eye on my finances and see those $$ accrue on my accounts every month. I was fortunate enough to have more money than I needed and I started to wonder what I could do with this stash. A little later, it occurred to me that my generation (Gen Y) will most likely be screwed when retirement comes, because social security will be broke, the government will likely be broke too and the crumbs left will probably not amount to much. Clearly not a future I’d be looking forward to. So I fired up Excel to figure out how much money is enough money to retire early.

Retirement home by the beach
That would be a nice retirement home

It turns out that there are almost 10 million millionaires in the US and becoming a millionaire isn’t a crazy goal after all. Not crazy, but not trivial either. I worked on the goals, broke them down into smaller goals, set up intermediate steps and put them all together into a Strategy for Financial Independence which is reviewed on a yearly basis.

Eventually, I realized that what I wanted above all is to buy-back control of my time and spend it where it is important to me. When I’ll be 65, I will not regret having spent too little time in the office. But I would regret not trying to live on my own means and not trying to live outside of the corporate life.

For now, our plan at its most basic level is 3 fold:

  1. Measure regularly our progress towards Independence,
  2. Align our current spending habits with our goals and increase our savings rate,
  3. Keep working hard but also work smarter to generate more income.

Based on our (very unoptimized spend of) 2014 numbers, we will be ready when we’ll reach a 2M$ net worth. We are currently in the first 25% of this goal and we should be on track to reach this goal by 2022.

Shoot for the moon. Even if you miss, overshooting isn’t that bad.

On the plus side, our careers are great with lots of potential, we are healthy, we’re getting married and overall happy to be on this journey to FI and quite excited to reach our destination. This will keep us on track and might help bring the date forward.

A few headwinds we’ll have to deal with may push this date back. We both work in the Oil & Gas industry which is cutting boatloads of jobs these days (we need to see how this plays out) and we have a toxic loan on a house abroad that we need to take care of. We will surely have kids before we are retired and the additional spending this will put on us is a big question mark for now.

So there we are : we’re shooting for early retirement in 2022. That’s our goal.

Life has never been so good and we’re going to make it better.

Nick – MoneyMiner

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12 COMMENTS

    • It is very possible that we can run on a leaner budget, we are actively working on it this year, and in that case the required amount would be lower. However, some of the uncertainties that I’ve listed could have a relatively large impact on our savings effort so we’ll keep that as a motivating factor to overshoot the target 🙂

  1. Only 7 years away. That’ll be here before you know it! Might have to extend it depending on where that picture is from with the house on the ocean 🙂

    You and EvenStevensMoney have inspired me to do a similar post!

    • 7 years can indeed come fast and we sure hope they will! This is quite an exhilarating feeling to aim and commit to a goal so many years ahead, it actually helps us focus on what we now consider important.

      Looking forward to read your post!

  2. With an exact goal in mind you will surely achieve FI. It’s important to have specifics in mind such as year for FI. This gives you a measurable metric to gauge your progress along the way. It’s really not that far off and before you know it you’ll blink and 2022 will be here.

    • Thank you DivHut for the nice words of encouragement! I can already see the improvement since I started measuring my progress and having a goal does help focus and set intermediate steps. Do you also have a Financial Independence Day?

  3. Quite honestly I never thought about a Financial Independence Day. I have been doing my own thing since 1998 when I started an online biz with a college buddy of mine and haven’t looked back. I work every day but from home mostly and love what I do. I never once thought about “retirement” in a traditional way or FI since I feel like I’m not working because I truly enjoy what I do. I feel very blessed to be able to make a living on my terms. I’m already 41 and have no plans to stop doing what I do. I have been blessed to be able to travel and see more of the world than most people see in a lifetime (read my About page) and already have the ability to take off a week or two or three whenever I want. My journey with dividend investing is more to provide supplemental passive income rather than enable me to be completely FI. Of course, if my dividend income can cover my entire monthly expense I wouldn’t be upset. hanks for sharing your FI journey.

    • This is really great that you have a “job” that doesn’t feel like it and gives you all the flexibility you need. I look at FI as a way to regain control of my own time, you seem to have achieved this already!

  4. Congrats on planting your flag! We echo others in encouraging you to optimize your budget. You might be able to retire sooner, and on less. Look forward to following and cheering you on on your journey!

    • Thanks for the support and these very encouraging words! Budget optimization is surely our main focus right now and this year already looks very promising. Our goal of 2022 makes sense on many fronts, but surely we’ll be excited if we can retire earlier!

  5. I like the overshooting concept. As of now, between my rentals and dividend, I should be able to retire living minimally. However, I want the extra cushion, so I decide to work a couple more years. I don’t know if I’m going to have children, if I do, it might change things.

    Being able to see your number clearly, and shoot for it is very powerful. I no longer dreading going to work. I actually enjoy work a bit more because of that. Goodluck with the whole process.

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