March 2019 Update
Progress to Early Retirement: 48%
Progress to Financial Independence: 96%
Progress to Half Income: 100%
Percent Home Ownership: 61.77%
Net Worth Breakdown: Home Equity 20% Non Retirement: 20% Retirement:60%
February 2019 – ER: 48% FI: 96% HO: 62%
January 2019 – ER: 44% FI: 87% HO: 44%
December 2018 – ER: 44% FI: 89% HO: 44%
November 2018 – ER: 46% FI: 90% HO: 43%
October 2018 – ER: 45% FI: 90% HO: 42%
September 2018 – ER: 42% FI: 90% HO: 41%
August 2018 – ER: 44% FI: 89% HO: 41.9%
This Month’s Story:
The big deal for this past month was that we actually paid down 1/3 of our home’s value. This payment will save us more than $80,000 in interest and 12 years in payments. If you want see some more of the details, please look at this post I did a few days ago on it. One big issue that we had was that we have been very bad about cooking at home. This is not good for our health or our savings rate. There has been good reason as the flu ran through our home this month and we were not very motivated.
One of things I have been doing this past month, albeit not as much as I would like is to be working on a program that will automatically graph certain values that I want to change. I also want to share a version of my retirement scenario table. I’m working on it, but it will be a while as I have a lot of things vying for my attention. I do have one graph so far, and I have a lot of charts that I want to generate. I’m curious how interesting you all find it to be.
This shows you the percent change in value of each of our retirement accounts with the blue line being the value of the sum. This is interesting to me, and helps me see how each one is doing. For the most part they track each other, but that makes sense since they are all balanced more or less the same way in terms of index funds holding securities and bonds. While I have the data for our home and non retirement accounts, I don’t have the charting ready. I’ve also been putting a lot of extra hours in at my W-2 job, and well that has to come before this.
Just to make another point, one of our 401ks, the brown line that broke the trend, did very well. It has a different mix of funds, and I need to dig into the holdings in it, as it still conforms to our basic model. Still, I am not complaining.
This begs another question, why do we have more than 1, 401k each. Well, we only have 3 accounts, and the reason we did not roll over the one into the new one is that it has better options than the others. The pinkish high line is an annuity that my wife received from her parents when she was young. The value is low compared to the other accounts but the bond funds in it have done well. The chart shows me that I miss recorded the value in September, so I will fix that going forward. I left the mistake in the chart just to show why I value this functionality as this is not as easy to see in Personal Capital, in spite of how much I do like and use that product. Fair notice, that Personal Capitol link is an affiliate link.
This Year’s Home Improvement
We need to get the ball rolling on this. Spring is almost here, and we have not called any contractors yet. We really need to do that. I want that screened in porch, and I want to know how much we will pay for it. Our existing deck is in bad shape, as the decking is starting to rot. It’s safe to walk on, my father in law is a retired carpenter, and confirmed that, but it’s not pretty. Add to that the fact that we live with woods on two sides and one of those woods is wetlands, and we have lots of mosquitoes. We end up using our deck only when the sun is high, and the pesky bugs are not near by. The wetlands are good since we are on a well, so don’t let me complain too much, but no one likes mosquitoes.
When Can We FIRE?
I spoke about this last month, and I want to talk about it more. With the money we put in our mortgage, we will have this home paid off before my son graduates from high school. That will be great. We also will certainly be retiring South or at least to a cheaper area. It would be insane not to. That makes figuring out how much we need to FIRE more difficult. We definitely want a FAT retirement as I am asthmatic. I want that buffer just in case.
As I said last month, assuming the next 15 years in the market averages us 5% on our investments, and we can continue to save at the rate we have been, then we can retire in our preferred FAT scenario, in 15 years. That puts us in our late 50s, and really just a bit ahead of schedule. I am not sure I can call it FIRE as it’s not really early.
This is where the tricky math comes in. Since we live in one of the most expensive metro areas in the US, and we want to live in a less expensive, say in or near a second or third tier by population city in the US, and thus much cheaper, we probably don’t need as much. When you factor in that we will not have a mortgage, then you can significantly cut our monthly spend, and thus our monthly needs. Considering the variable of healthcare costs, I kind of don’t want to, and thus why I haven’t really lowered my number. Nevertheless, we might be able to retire much sooner with the same standard of living.