I had a sobering realization over the weekend, followed by a moment of freedom, and I thought I’d share on the off chance that it might help someone in a similar situation.
While our net worth has been going up consistently over time, the bulk of that growth is from savings and paying down the mortgage and car loans (our only debts; we pay off the credit card in full each month). The value of the house on the market and the value of our investments has been more-or-less static for the last year (house) or three (investments).
What this means is, unfortunately, the plan to retire early in 2010 is no longer feasible. I’ve had a niggling awareness of that for a year or more, but finally over the weekend I sat down and really LOOKED at the numbers. The net worth is solid (at about half a million, including market value of the house and the mortgage), but it’s just… sitting there.
Now, I’m NOT going to do something stupid and rush off to chase a better investment mix or better but riskier returns. I know that this is just a corrective cycle, and over the long term, we’ll be fine.
The short term is the problem. I’d been looking forward to at the least a semi-retirement in 2010, but just now it’s looking like even semi-retirement won’t be possible then, despite consistently saving 30% or more of our gross income.
So the reality check is painful, but necessary. I worked through the feelings of inadequacy (I should’ve done better – never mind that we’re already doing better than 90% of the population). I dealt with an irrational sense of betrayal (where are those “historical” 8% returns NOW, huh?). And then I sat down to do some re-figuring.
It was in the middle of the re-figuring that I had a moment of epiphany. I know DH & I are doing everything that we can reasonably be expected to do right. Could we save more than 30% of our gross? Maybe, but life wouldn’t be much fun if we did. Could we go for potentially higher returns? Sure, but we’d have to accept more risk of losing everything, which I’m not willing to do.
That’s when I asked myself why I needed a “date certain” for ER. It gave me something to look forward to, a light at the end of the tunnel, if you will. But then, when the date certain had to be revised, it was painful.
So now I’m working on a more Zen-like attitude. We’re doing everything right – saving, investing, paying down debt. What that means is that one day, we WILL be able to retire, and given the high rate of savings, that retirement date will almost certainly be sooner than the traditional or expected retirement date, even if it’s not in four years. In the meantime, we have jobs that are not abominable, and we have enough room in the budget to enjoy life.
What more can we ask for? (Besides 8% returns, of course.)
While our net worth has been going up consistently over time, the bulk of that growth is from savings and paying down the mortgage and car loans (our only debts; we pay off the credit card in full each month). The value of the house on the market and the value of our investments has been more-or-less static for the last year (house) or three (investments).
What this means is, unfortunately, the plan to retire early in 2010 is no longer feasible. I’ve had a niggling awareness of that for a year or more, but finally over the weekend I sat down and really LOOKED at the numbers. The net worth is solid (at about half a million, including market value of the house and the mortgage), but it’s just… sitting there.
Now, I’m NOT going to do something stupid and rush off to chase a better investment mix or better but riskier returns. I know that this is just a corrective cycle, and over the long term, we’ll be fine.
The short term is the problem. I’d been looking forward to at the least a semi-retirement in 2010, but just now it’s looking like even semi-retirement won’t be possible then, despite consistently saving 30% or more of our gross income.
So the reality check is painful, but necessary. I worked through the feelings of inadequacy (I should’ve done better – never mind that we’re already doing better than 90% of the population). I dealt with an irrational sense of betrayal (where are those “historical” 8% returns NOW, huh?). And then I sat down to do some re-figuring.
It was in the middle of the re-figuring that I had a moment of epiphany. I know DH & I are doing everything that we can reasonably be expected to do right. Could we save more than 30% of our gross? Maybe, but life wouldn’t be much fun if we did. Could we go for potentially higher returns? Sure, but we’d have to accept more risk of losing everything, which I’m not willing to do.
That’s when I asked myself why I needed a “date certain” for ER. It gave me something to look forward to, a light at the end of the tunnel, if you will. But then, when the date certain had to be revised, it was painful.
So now I’m working on a more Zen-like attitude. We’re doing everything right – saving, investing, paying down debt. What that means is that one day, we WILL be able to retire, and given the high rate of savings, that retirement date will almost certainly be sooner than the traditional or expected retirement date, even if it’s not in four years. In the meantime, we have jobs that are not abominable, and we have enough room in the budget to enjoy life.
What more can we ask for? (Besides 8% returns, of course.)
