Category Archives: Financial Independence

The Next Five Years

In terms of solidifying our path to independence, the next five years will be crucial. I realize this journey is a marathon, not a sprint. There are times when I wish the needle would just move faster. This type of mentality just means I’m wishing my life away. I’m trying my best to encourage us to focus on the present while keeping the future in mind. This is hard for me to do.

Why is it hard for me to stop focusing on the future?

I am very goal oriented person. It has served me well in life. This is how I graduated number #1 in my high school class, finished my bachelor’s and master’s in 4 years, and carved my career path. I’m, also, very stubborn. My husband calls me a bull. I can be so hyper focused to finish, I can quickly forget about people around me, and my present life in general. There are definitely more upsides, but the downside is that I don’t stop to smell the roses. I used to make it a goal to stop and smell the roses, but that just meant I was forcing myself to enjoy the moment. Instead, I focus on goals and making them automatic. I’m becoming more relaxed. Only time will tell if this will be good.

Why is starting on the journey so hard?

We spent the first five years (2012-2017) establishing our financial base. Honestly, when we first started, freedom seemed so far away because we were at point 0. It’s really hard to visualize the finish line when you are at the starting line. But if you split up long term goals into smaller increments, it’s easier to visualize progress. One of the reasons I love to-do lists.  Now, we’re almost 25% of the way. We have knocked down 5 of the 20 years. Why 20 years? Being free by 42 seems like a pretty cool idea. When I first started reading personal finance blogs, I was an early reader of Retire by 40.

Why are the next five years crucial?

We are, both, respectively, 27 and 28 years old. In five years, we will be 32 years old. I feel like 5 years is a good tollgate to check the status of our long term plan. In 5 years, we should be 50% of the way through the journey. We will spend the next five years making sound financial decisions. I believe in 5 years, we will have enough for it to really start to snowball.

 Are we there yet?

My husband asks me on a pretty regular basis if he can quit his job yet. I have to remind him we are not quite there. He got super excited/depressed when I told him we could be finished by 42.

 Other factors to consider?

 First, kids. Some people may have noticed I don’t really bridge the subject of kids. I think we’re getting to an age where people ask us if we want kids. This is an extremely personal topic. The truth is I feel like we are still so young. So no plans. If we had kids, I would want us to be in a position to be comfortable and not stressed out. So there is the answer. I probably won’t bridge this subject very often.

Second, my parents. I’ve, also, mentioned I feel extremely responsible and will end up helping my parents in their old age. My dad is turning 59 this week. He is healthy and still works, but in my mind, I have a 10 year timeframe. My dad is the main earner in the family. My mom is 47, does not work, and sometimes she gets a little bit of money from cleaning houses. She only has one client due to her back issues. Honestly, I’m not really worried about my dad. He’s a busy body and active due to his electrical trade. But my mom is overweight and I’m always trying to influence her to eat healthier, exercise more, and lose weight. This is an uphill battle.  I’m, also, doing my best to influence, encourage, and help my brother start his journey. He’s 20 years old and currently, in college. He’s really good but struggles with school due to his dyslexia. The goal is for us to split the support of my parents 50/50. I have written before how this has created anxiety and kept me up. In order to get rid of the anxiety, I’ve just started to come to terms with the fact.

The next five years will be a testament to staying focused. We, both, need to do well in our respective careers, and really rock it, so our income remains the same or increases.

Life Update – FI Number

It’s July 2017.

In May 2017, I was promoted and moved to a new team. More money, more stress.

Remember how I said we were thinking about buying a house? Scratch that. The last couple months have made me realize I can’t keep doing this until I’m 65. And my husband has wanted to retire since forever ago. The whole climbing the corporate ladder is also not looking enticing at all.

In a moment of desperation, I sat down, opened an excel sheet, and started figuring out how much money we needed to get to FI.

Yes, after saying that I didn’t want to figure out a number because I have to worry about my parents, I still calculated it.

We spend about $40K a year. I want to add another $10K of buffer, just in case. If I multiply $50K x 33 = $1,650,000.

I would like to have additional buffer, so I’m aiming for us to hit $2,000,000 on the safe side. I estimated we can get to $2M in 15 years.

And that’s how I came up with a number to get to FI. 15 years seems like a long time…But I’m hoping the more money we start front loading, the more money will snowball (compound interest) and we will get there sooner, rather than later.

The Benefits of a DINK Couple

My husband and I are a DINK (dual income no kids) couple. A lot of my coworkers are married and already have kids or about to have kids. I feel like we are so young, no idea how people do it with kids, especially without flexibility. I can’t imagine fitting kids into our schedules now. I’m out of the house for 12 hours at a time. Then, I spend 6-7 hours just sleeping. That only leaves about 6 hours of free time which gets eaten by showering, getting ready for work, cooking, eating, and getting the mind ready to go to sleep. I see everybody’s hectic schedule and have no desire to replicate it.

Here are some of the benefits as to how I see it:

  1. Only need 25 minutes to get ready in the morning. I’m pretty bad, or maybe I’m pretty awesome, but I’ve figured out how to maximise my sleep time and get ready super quickly. I’m not big on having super fancy hair or makeup to go to work, so this helps a lot. My hair air dries since it’s curly, so I never have to spend time blow drying or straightening my hair. I only wear eyeliner and use my glasses to accessorize!
  2. I only have to take care of myself in the morning. I get up before my husband and only have to worry about myself.
  3. Only have to worry about my laundry. My husband and I usually take care of our own laundry. Sometimes a couple of his items will get mixed up in mine or visa versa, but usually it’s not a lot. I do my work clothes separetly because the clothes are delicate. I have seen how much landry moms’s do every week. It’s insane. Can’t imagine.
  4. More discretionary income. One of my coworkers is about to have twins and he’s made comments of how their discretionary income is about to take a dip.
  5. No paying for daycare. The cost of daycare is insanely expensive. A female coworker has mentioned she pays $400 a week for her 1 year old’s daycare. That is $1600 a month! This amount covers our monthly expenses aside from mortgage andcar/home insurance.
  6. More free time. I really treasure my free time. I remember in college I would get so antsy when  I had free time. Every single hour of my day was allocated for a purpose. I’ve since switched life phiolosphies. Monday-Friday is a crazy race to get everything done, then Saturday and Sunday are a leisurely stroll. Last Sunday I woke up and finished reading a book, aftwerwards, I spent all day watching a marathon of Scandal on Netflix.
  7. We can take vacations during off-season when it’s much more affordable!

There you go. The benefits of not having kids. I really enjoy spending time with my husband alone. I think it’s extremely important. Life is already hectic enough. Some nights we barely talk to each because we get home and go to bed at different times.

On another note, did you know geese mate for life? Geese only have one partner their lifes. Talk about taking till death do us part quite seriously.

Are you part of a DINK couple? What are your thoughts?

Is Financial Independence Possible?

I, go back and forth on the vision of the future. The pendulum keeps swinging back and forth on whether financial independence is even possible. At work it seems impossible. There is an aging workforce who may not even have the option to retire. If they can’t retire, could we even consider financial independence? I ask a lot of questions. Prodding constantly; trying to figure why they didn’t save up enough money to retire.

People at work constantly say they can’t afford retirement. Not sure why because people at work drive super fancy cars, wear nice clothes, go on nice vacations, and have nice McMansions. I’ve heard some visitors say “wow your parking lot is full of super sleek cars!” So it makes me doubt if we’ll ever get out of the rat race.

My parents don’t have a retirement fund. No, they didn’t overspend their money. They immigrated as blue collar workers and really had no financial education in terms of investments, etc. My parents can save. They are penny crunchers, but they have no clue as to how to invest. Their earning power over the years has not been high. This is a huge problem in the low income immigrant population. A problem I plan to start tackling soon. So their retirement is dependent on their children. This puts a lot of pressure on both my brother and I.

Well, my brother is not necessarily aware of this pressure since he’s only 16. But he will in a couple of years. One of the reasons I’m pushing him so heavily to do well in high school. While I don’t believe in the education system (I think it’s completely broken…topic for another day), I believe it’s one of the best ways for children of low income immigrant families to get out of the cycle of poverty. I’m not the only one. My first boss in high school (I worked for a non-profit) is a prime example. He would remind me of this quite consistently. He came from a blue collar neighborhood in Illinois where you were expected to stay forever working for the factory and have babies. He says his mom never forgave him for leaving, joining the military, going to med school, and rising up to colonel and chief of staff. But it was what allowed him to take care of her in her old age. So, I constantly think about my parents’ retirement. Is anybody facing a similar situation?

After coming across Root of Good’s blog, I got a little more motivated. His main points are living a modest lifestyle and saving. We only need around $40,000 a year to live a modest lifestyle. He wrote a step method to do look at your savings. If a $1,000,000 is your goal, then start with $10,000, and then do $50,000, then, $100,000, etc. Treat every goal like a milestone.

I, also, ended up reading FI’s plan on how he plans to retire by 30. He’s built up passive income through rental properties and dividend income. He’s done great! He’s going to exit the corporate world next year. Pretty great!

So, maybe it’s not impossible. If we never try, we’ll never know. So I’m using a combination of Justin’s (Root of Good) method to set goals. I’ll be talking more about my own personal goals and our goals as a couple in a follow up post.

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Do you think financial independence is possible? Are you working towards it?