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My path to FI
Old 06-06-2017, 02:32 PM   #1
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My path to FI

Hi All,

Long-time lurker here. This isn't meant to be a journal so I stuck it in this forum. Just hoping to give back to the community with my experiences to FI (for me).

I recently deposited a check that put me over $1M NW. Other than the DW, nobody else knows so I wanted to share anonymously on the internet like so many before me! Also, like many others have stated, it's a bit anticlimactic. However, life is much better being FI and in control of my work situation. I feel more free than I ever have before in my own life and that's about the best thing one can buy I think.

I thought I'd offer how my path went in case it's helpful to others and just to think on it myself a bit today. There are many roads and mine had some setbacks, but keeping focus seems to be working.

Age 25 / 2007: Graduated with a engineering MS degree, found and took a job in a different field for a relatively lower paying 55k / year. Started with -20k NW due to student loans. Very glad I didn't have the burden some kids have even 10 years later as grad school paid me for what has to be the worst work ever done in exchange for tuition.

Age 26 / 2008: Still lived like grad student, raises to 65k. Coworkers' broker dad promises 35% gains. He convinced me to take out 20k in personal loans, which he then invested on margin in 2x leveraged emerging market funds....astonishingly stupid of me to do it and he ends up ruined evidently. Luckily, I only lost a few grand overall, but what a roller-coaster! No idea on NW.

27 / 2009: Day trading my way into the crash. Ended up with 40k in carry-forward losses. Stopped contributions to 401k. I literally sold everything left within one week of the bottom! Took what meager savings I had left outside the 401k and bought a 40 year old 35 foot sailboat (in cash at least) to live on! Terrible financial choice obviously, but I'm super happy I did this as I think it saved my sanity. Would go on to sell and buy a few more over the years, always downsizing each time until I ended up with a 15' trailer sailboat. Survived about 6 layoff rounds at tech company this year. Just a terrible year for the most part. NW probably about 50k at year end.

28 / 2010: Put everything I owned into a 50 acre piece of land in a LCOL area. Still own it, currently beginning to build own cabin on land now with DW. Glad I bought it as it ended up being a very good investment accidentally. Maxed out 401k, but with too conservative 50/50 index approach. Finally become something like a "boglehead" investor. Started reading a ton on investing. NW about 75k. Smartest thing I do here is start tracking my NW in excel.

29 / 2011: Got married (still happily with her). Frugal wedding (we paid). Met a 82 year old, multi-millionaire Chinese woman on honeymoon cruise that told me about real estate investing. 6 months later I bought the worst 6 unit on the planet! (still have it, turned out OK, but it's been for sale forever now). What a nightmare that building was the first year! NW around 150k at end of year as income rises to about 85k.

30 / 2012. Still with same tech company, breaking into 6 figure income as they have the impression I do my job well enough. Really buckling down on savings ratio, but wife's doctorate tuition is a killer. NW ends up at about 200k. Seriously hating my job now and about 4 more layoff rounds survived.

31/ 2013: Work is better (remote now at least), move across country for wife's work. Buy a few rental houses (none of them great deals) in cash. NW ends up year at 310k somehow (almost entirely just crazy savings ratio of like 80%).

32 / 2014: Wife's work is soul-crushing with 80 hour weeks and pays terrible. Mine is soul-crushing, but pay gets up to around 120k. Bought a few rental houses (again, nothing great). We end up the year around 500k NW. 500k really let me start relaxing about money. 12 total layoff rounds with tech company really wound me tight.

33 / 2015: Work life is decent, new role and I really enjoy it for once. Company culture is all yes-men like so many other tech companies in the bay area. Still remote, but moved back to East-coast. Wife takes job she enjoys that pays living wage. We almost bought a few different houses, but keep getting outbid over asking price (never did buy anything for ourselves). I invest with a partner in some rentals that we later sell for a fair profit. This was a much happier year. NW of 640k at the end of the year.

34 / 2016: Soul-destroying tech company goes into massive bankruptcy. Looks like maybe Enron-level fraud. I quit in May and start a 50/50 engineering consulting company with long-time coworker. We take advantage of having known all the vendors in our field for 8 years and land some good work. We knock it out of the ballpark on 2 big projects and pay for 2016 ends up around 300k each all said and done. Sell off most of the rental properties and start doing private mortgages / hard money instead. NW ends up at 820k.

35 / 2017 (today): Company invented a thing that we sold, so technically NW is around 1.2M or so if you count the future invoices, but just crossed over 1M so far. About 90% of it is in various investments. VSMGX is about 1/2 of those, real estate and private mortgages the other half. DW and I still live somewhat like grad students (never owned a car worth more than $4k), but are slowly spending more on ourselves as we relax. We are FI, but not RE, and no plans to really retire before 40ish.

So, the thing is, I never found any super investments (I definitely found some of the worst!), but my income really helped carry the load. That, and crazy LBYM is the main driver of how we got here. We never spent more than about 35k a year I think (don't track this well, just both frugal folk). No kids, but I don't think that would have derailed us really.

I also will offer that I never really enjoyed my job until I got "FU money" and could just say / do whatever I felt was the right thing in a sea of debt-drowning yes-men. That was always fun and ultimately was part of how I built a reputation of integrity in my small field. That reputation was also critical to the small-biz success we've had.

Thank you all to the regular posters here that's I've learned from over the years and I hope my little tale helps others see that you can screw things up and still end up OK with some luck.
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Old 06-06-2017, 02:44 PM   #2
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Welcome! Your path sounds similar to mine (and a few others here). Except I didn't have the company success

Being FI is a game changer. I started relaxing around 500k (EUR). Maybe a bit too much, accumulation slowed down a bunch since
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Old 06-06-2017, 03:44 PM   #3
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i enjoyed reading your bio. Im very happy for you. Im so impressed you shared with us the lows of your investing as well as the highs. we lived on 35k or less till 2008. Its amazing what you can amass over a long term by not spending everything you make. Keep up the great work
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Old 06-06-2017, 08:16 PM   #4
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I agree. DH and I also had some investing mistakes, losing six figures on a few real estate investments and some poorly chosen financial investments. Very important message that even with some mistakes, LBYM makes a huge difference. Thanks for sharing.
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Old 06-07-2017, 06:09 AM   #5
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Since when is 1M net worth FU money?
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Old 06-07-2017, 06:29 AM   #6
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Originally Posted by ponyboy View Post
Since when is 1M net worth FU money?
Seems to me, if it can be accessed, it could reasonably be expected to cover all spending if spending is low enough.

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We never spent more than about 35k a year
And if spending is that low, it's quite possible it could be considered FU money (would only be a 3.5% withdrawal rate if that $1M was invested).
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Old 06-07-2017, 06:30 AM   #7
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Since when is 1M net worth FU money?
Depends on spend level. In my case, it is. For many, it isn't.

Also, define FU money. The ability to walk away from any job is already a decent definition, don't even need to be fully FI.
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Old 06-09-2017, 10:23 AM   #8
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Depends on spend level. In my case, it is. For many, it isn't.

Also, define FU money. The ability to walk away from any job is already a decent definition, don't even need to be fully FI.
Especially at age 35! Lots of time left to find something more suitable - doesn't even have to be for fantastic money with 1mil already working for you and low expenses. A case could be made - though I wouldn't make it - that FIRE is now possible. Very much a YMMV situation.
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Old 04-24-2019, 12:05 PM   #9
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OP here. Figured I'd update just to share some thoughts.

It's been quite a ride in past ~2 years. My little consulting company went silent revenue-wise in 2018 due to USA tariff impacts on my industry. Basically took a year off and wife and I built a house with our own hands! About 1500 hours total labor and mostly fun the whole way. We actually ended up selling it shortly after (got the money back, but like $5/hr for labor, haha), but that's one bucket-list item off my list! Looking forward to checking off more. Life is starting to feel short and the list is long.

2019 is shaping up to be a healthy income year so I'm back at the work bit and mostly having fun. We politely avoid the bummer clients now. We also moved internationally to a place I never imagined I'd be for DW's career.

Agreed 2017 was borderline FI. It's been an interesting experience rushing up in NW close to that point and then just sorta sitting stagnant in 2018. As many before me have written, perspectives really change around money, work, and just what matters in life once you have "enough".

To me, "FU money" is a bigger deal than "FI". That FU money definition of course varies by person, but for me having ~10 years expenses covered was where I felt it

The point of this post is really to say that I believe my mentality around money has completely shifted from where I was 10 years ago. I'm not too proud to admit 2009 me related to money in some pretty poor ways. Fear / greed, lack of a long-term plan, even feeling out of control of my life. Now, earned income just seems like validation of value brought to others through my work. Passive income / NW has sort of drifted into background noise as a separate thing. Nothing is worth buying over buying a feeling of financial independence.
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Old 04-24-2019, 05:36 PM   #10
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Looks like you're looking to get rich quick. Its a marathon. Pace yourself. You're making a lot of mistakes.
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Old 04-25-2019, 06:48 AM   #11
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Looks like you're looking to get rich quick. Its a marathon. Pace yourself. You're making a lot of mistakes.
Yeah, I think that's fair up to 2014 or so. Like I said, lots of investing mistakes and pulled through only by an average ~75% savings ratio.

Now, 85% of net worth is in a 60/40 AA (loving the new VTWAX!) and no emphasis on getting rich quick. Emphasis is on living the best life we can.
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Old 04-25-2019, 08:15 PM   #12
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Yeah, I think that's fair up to 2014 or so. Like I said, lots of investing mistakes and pulled through only by an average ~75% savings ratio.

Now, 85% of net worth is in a 60/40 AA (loving the new VTWAX!) and no emphasis on getting rich quick. Emphasis is on living the best life we can.

I enjoyed reading your original post. Hopefully others will read it and get inspired.

None of us start off making the right financial moves. It takes some trial and error to get it right. You've lived and learned and that's what is important. Sounds like you've got a handle on things now.
Good luck at ER.
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