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.
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:
- Measure regularly our progress towards Independence,
- Align our current spending habits with our goals and increase our savings rate,
- 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