Just finding my way around here…
My first blog entry — I suppose introductions are in order.
For now, I guess I’ll go by Mrs. FireDesired. My spouse will be Mr. FireDesired. My kids are Thing 1 and Thing 2, though that may change as time passes. Mr. FD and I are in our mid-forties, and our kids are just starting elementary school. We hail from New Jersey, the armpit of America.
So, what am I doing here? Mr. FireDesired and I are transitioning to a FIRE lifestyle. We believe we’ve reached a certain level of Financial Independence, and we’re trying to retire early.
To provide some light details, we reached our lean FIRE number in 2018. That’s when I quietly left my job to pursue other interests. During the Covid-19 pandemic in 2020, we hit our regular FIRE number. Now, as we count our blessings, Mr. FireDesired is stepping back from his job as well. We’re taking our first real steps towards actually being “Financially Independent and Early Retired” as a couple.
We don’t intend for this blog to be about how to achieve FIRE from scratch, though we might backtrack and write about some of that later on. In the next few months, we’re going to go through a lot of changes (e.g., switching from an employer subsidized health insurance plan to the NJ marketplace). I thought that it’d be beneficial to document some of the good and the bad that we encounter during this transition.
We’ve taken years to get to this point. Along the way, we’ve had the benefit of others that have taken the plunge before us. I follow rootofgood.com and retireby40.org to name a couple. We hope to be another data point for comparison and maybe provide some additional information if there’s anyone out there trying to do something similar in our neck of the woods. We hope that this blog might help others think about the considerations needed to make this transition towards FIRE.
I’ll soon be adding some of our plans, short term goals, and long-term goals. Eventually, I hope to also post entries every month to track our net worth and break down our expenses.
The quick and dirty is that we currently have a net worth of about $2.2 million. If we subtract out from our net worth the value of our home and our kids’ plus my own college funds, our invested assets total about $1.6 million. We have no debt other than credit card balances that are paid off every month. Our estimated expenses are roughly $50 thousand per year.
Here’s a little more detail…
Initial Net Worth as of 3/2021
Invested assets – Minus home and College Fund
Monthly SPending Projections
|Primary Residence – Property Tax+Assoc.Fees||$972|
|Rental – Property Tax+Assoc.Fees||$936|
|Gas + Electric||$160|
|Food (Eating Out)||$600|
|Total Monthly Expenses||$5,872|
Monthly Side Income Projections
|Rental Income Minus Taxes||$1,401|
|Total Monthly Income||$1,663|
We expect that we’d need $5,872 – $1,663 = $4,209 per month.
Annually, that’d be $4,209 x 12 = $50, 505.
Using the 4% rule, that gives us about $64 thousand per year to start. Or, if we really do end up spending what we expect, we’ll withdraw initially from our invested assets at about 3.25% for the first year.
At this point, I think FIRE is achievable for us, but we won’t really know until we try.
If we fail, we’ll document that too. In that case, we’ll hopefully learn from what we’ve done here, and you will too.