Hello again, everyone! I’ve been doing a lot of thinking since I figured out how much I’m actually spending each month and I’ve come to an amazing discovery! With the help of Excel, I’ve come up with a FIRE (financially independent, retire early) date! My FIRE date is December 27th, 2032!!!!! I know, it’s literally 15 years from now but I’m happy that I have a date to work towards instead of just “some time in the future, I hope to retire early.”
So here are the specifics of my situation. Based on my year end look a few days ago of how much I spent (with December’s expenses being estimated), I will have spent roughly $22,500 for everything you could possibly think of that I might need in 2017. My goal for 2018 that I set a few days ago as well was to reduce my expenses to only $18,000 for everything. I also did some calculating. I’ve been saving about $2,000 a month each month this past year. $1,000 has been going into investments and $1,000 was just going into my Ally savings account. Since I already have a large emergency fund in my savings account, I’m just going to start investing the whole $2,000 each month that I was saving instead of splitting if 50/50 between investing and savings account. That comes to $24,000 a year without even really trying too hard.
Now, since my 2018 goal is to reduce my yearly spending from $22,500 to just $18,000, that means I’m going to have roughly an extra $4,500 during the year to do something with. So, the yearly savings/investment goal is $28,000 overall. And that’s where my FIRE date of December 27, 2032 comes in! If I am able to save $28,000/year and put it directly into investments that produce a return of 8% per year that would give me $958,117 total (I do already have 40k invested) by my FIRE date. With a SWR (safe withdrawal rate) of 4%, I could have an income of roughly $38,324 every year. Or at a SWR of 3.15%, I could have an income of roughly $30,180.
Realistically, I could probably live on less (and possibly FIRE earlier) since that’s what I’m doing now, but honestly, I’d like to be a nomad and explore the world when I can stop working. So that’s the reason for upping my expected living expenses at that time. So there you have it! My goals are now all in writing and I have more motivation to keep obsessing about expenses and pushing towards a date to reach my goals! Keep your fingers crossed for me! I’ll be updating periodically to see how far/close I am to reaching my goals with my net worth updates.