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An update from norcaldreamer after two years
Old 06-16-2013, 04:45 AM   #1
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An update from norcaldreamer after two years

Itís been about two years since my last substantive post here, so I wanted to check back with a progress report Ė that can also serve as a snapshot that I can come back to in the future. Back in May 2011, our net worth (excluding home equity) was approximately $320K. Most of that sum was in retirement accounts and cash savings accounts, and I was contemplating setting up a taxable investment account. At the time, I still had $30K of graduate school debt racking up 6.8% interest, and even though we had a large household income, we didnít track our spending.

Fast forward two years later, and our net worth is now at $775K (plus another ~ $175K in home equity). This includes roughly $225K in taxable investment accounts, $425K in retirement accounts, and a very large emergency fund. Part of the growth of our net worth was the stock market at work, but most of it was the result of banking a large chunk of our salaries while trying to avoid lifestyle inflation.

Since discovering this board, I have spent a lot of time learning more about personal finance, setting up investment accounts, tracking expense ratios, putting money in back-door Roth IRAs, finding an asset allocation that works for me, etc. Even though Iíve been a lurker during most of the past two years, Iíve appreciated the many insightful posts on this board. And all the success stories have motivated me to keep going. So thanks, everyone!

However, I think the last two years have also been about finding balance. As the ďsaverĒ in the relationship, I used to wince whenever we spent what felt like exorbitant amounts of money. But the past two years has shown me that we can afford some indulgences while still making good progress towards our financial goals. On the other hand, the BF has learned that we DO spend a lot of money on things like food and travel, which has incentivized him to cut back and find more value in his spending.

Tracking our finances has been a very worthwhile endeavor, mostly because it has given us a better sense of the number that we are shooting for in order to retire. That number is still a little sobering, since it seems so far out there. But if we continue to work hard, save, and make progress, I think weíll get there in the next 10-15 years.

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Old 06-16-2013, 06:52 AM   #2
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Thanks for the update. You guys are doing great ! Very impressive uptick in NW. Did you manage to keep to your goal of only spending one paycheck and banking the rest (including bonuses) ? I love that you converted BF into a "spending tracker". I had to put DH on a budget so that he realized how much money he was simply wasting. Now he's a tracker and we both love that

"For the time being no discipline brings joy, but seems grievous and painful; but afterwards it yields a peaceable fruit of righteousness to those who have been trained by it." ~
Hebrews 12:11

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Old 06-16-2013, 10:35 PM   #3
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Congratulations on an impressive rate of Saving/NW increase.

Absolutely agree about finding the balance that suits your personal circumstances. We are at a much later stage in life and have only recently increased the vacation/indulgence/discretionary spending.
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Old 06-16-2013, 10:41 PM   #4
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Thanks! We came very close... we saved 100% of my regular salary and his bonus. However, my own bonus last year was much larger than expected (as result of an extremely stressful year at work), so we spent half of that unexpected "windfall" on treating our parents (and ourselves) to a trip to Europe.

However, the large bonuses usually don't tempt us that much because we really don't know how long our high-paying jobs will last (or how long we will last in these jobs). We had a job scare last year, so now we are just enjoying the high savings rate for as long as we can, and keeping a large emergency fund just to be safe.

Interestingly enough, I think the BF is more concerned with feeling like he CAN spend his money however he pleases (without any nagging) rather than actually doing so. Now that I've stopped telling him to "save, save, save," I notice that he's been saying that himself quite often.

Live And Learn - I see that you are FI and targeting retirement in two months! Congratulations! That is AWESOME!
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Old 06-17-2013, 01:12 AM   #5
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Originally Posted by SVHoper View Post
Congratulations on an impressive rate of Saving/NW increase.

Absolutely agree about finding the balance that suits your personal circumstances. We are at a much later stage in life and have only recently increased the vacation/indulgence/discretionary spending.

Thank you! I'm glad to hear that you are treating yourselves to some additional discretionary spending. After seeing the declining health of our parents in recent years and the untimely passing of a few relatives at very young ages, I've definitely come to appreciate the preciousness of life. We remain steadfastly dedicated to our FIRE dreams, but I try to remind myself everyday of the importance of balance!
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Old 04-22-2015, 06:55 PM   #6
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It’s been almost two years since my last update, so I wanted to write in with our latest progress. Back in June 2013, our net worth was approximately $775,000 excluding home equity of approximately $275,000. Now, our combined net worth is up to $1,450,000 (plus another $285,000 of home equity). This consists of approximately $625K in taxable investments, $550K in retirement accounts, and large cash reserves.

When I first discovered the forum, retirement was just a twinkle in the distant horizon. But given the dramatic increase in our net worth over the past four years, I’m now thinking that being FIREd isn’t that far off. Depending on how conservative we are, our magic number is anywhere from $3 - $5 million. At our current rate of savings, investment and progress, we’ll get there in the next 5-10 years.

Ironically, though, as we move ever closer to our financial goals, the desperate urge to retire has waned. Four years ago, my partner and I were both overworked and unhappy with our jobs, and we weren’t sure how long we would last. After big career changes (for both of us!), we’ve become much happier and less stressed, with a higher household income to boot. I’d still love the freedom of being financially independent, but I really like what I do now and can see myself doing it for many more years.

Life is good these days. We work fewer hours, enjoy our weekends more, and take lots of international trips. Even though we spend freely and give generously, we still save approximately 65% of our post-tax income. And now that our investment accounts and asset allocation are all set, it’s just a matter of enjoying the ride for the next several years. In the meanwhile, I’ll continue to lurk the boards, learn more, and be inspired by all the success stories.
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Old 04-22-2015, 07:59 PM   #7
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What an awesome update.
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 7%, rental income 18%
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Old 04-22-2015, 09:59 PM   #8
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Norcal, I am curious what you guys do if you don't mind in general terms ha? I would like to bring home that kind of bacon so to speak. I have only been able to save about 50k in the last year!!!! lol
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Old 04-23-2015, 07:22 AM   #9
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Trueace, you say "only" 50k?? That's 3/4 of my salary! ! I often wonder if boards like this and bogleheads contain folks who are well above middle class. Everyone seems to make 6 figures and all the 20 something's have half a million saved by the time they are 25.
Anyhoo, thanks for the update Op

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Old 04-23-2015, 01:18 PM   #10
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I resonate with norcaldreamer's positive change of outlook as various thresholds are crossed toward FIRE. I was having a bad time at work six months ago and in reaction, as a self-protective act, determined a scenario wherein work is actually optional right now if I really, really wanted it. It would involve my wife still working and both of us sacrificing and, no, I did not say it was a popular scenario on the home front. Lately, I've been thinking of these thresholds as a progression of countries and martial arts belts. For example, if we both retired today at ages 49 and 52 (we have no kids), we could live well in the Philippines or Nicaragua. In a couple of years from now, we ought to earn a solid Colombia or Mexico Belt. In 7.5 years, when we can tap the first IRA when the first of us hits age 59.5, it is the USA FIRE Black Belt, if our plan and 50%+ savings rate continue on course. Even well short of a solid FIRE achievement, breaking through these levels along the way gives a certain confidence and bullet-proof feeling when the baloney at work starts flying, because we can smile confidently inside knowing that we have precious OPTIONS. Not many posters comment on this phenomena or other strategies (like part time work) in-between full career and full retirement, so I was encouraged to see norcaldreamer mention their own improvement in career and FIRE mindset, if not total retirement yet. I'm glad you are finding work enjoyable!

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