Optimism meets reality. That’s a concise statement of where I am in the grand scheme to reach financial independence. Back in 2009, when I first started thinking about FIRE, I figured I would need about $750K to reach financial independence. I was desperate to get out of the law game back then. My desperation manifested itself in very physical ways like a constant feeling of stress, discomfort, and uneasiness. Well, we’re almost at $1M so I’m now way past the initial target I set for myself. But I’m still at my job. Why didn’t I leave yet? Well, I still don’t know what I’d do with myself. Still trying to figure that one out. Also, I’m married now so I have another mouth to feed so even $1M won’t go as far as $750K would for one person. Finally, my job isn’t as bad these days. Not that it was bad before, but I just didn’t adjust well. I’ve now hit my stride at work where I don’t have to work too hard to reap the rewards. I still recognize that there is much more to life than shuffling papers as an attorney. But now I’m worried I’ll be too complacent to leave, forcing myself to linger in a self-imposed purgatory for who knows how long.
So I’ve already moved the goal posts once, due to getting married. Now I need to sustain $45K of spending every year so we are planning to save $1.5M for a 3% withdrawal rate. Will the goal posts move each time a life event manifests itself? I can already think of many life events that could cause us to move the goal posts.
- We could have kids. Kids cost a lot of money and I would want to help them pay for college, like my parents did.
- Our parents might need help. While my parents are frugal and saved enough for their retirement, my in-laws are completely dependent on government programs to get through retirement. And likely will try to rely on us as well. I will resist, but when it hits the fan, I may lose that battle.
- Within the last 12 months, I overcame my fear of the markets. Mostly, I forced myself to automatically invest a certain amount every month. As such, we are still plowing money into the markets, which are priced pretty darned high. But we have enough invested that even minor gyrations could offset the amount we save every month.
Let’s say we hit our savings target. What would our life look like then? We could move to a cheaper area and free up enough assets to buy a house and support our parents/kids. Or we could travel internationally for an extended period of time. I could work part-time for relatively tiny income (compared to BigLaw compensation) to cover any overage in our spending (boy is that a contradiction of FIRE). But we’d be pretty limited to our budget. Even though I am tied to my job now, I feel financially free in that I can splurge on basically whatever I want without denting our finances. Get a last minute reservation at a Michelin 3-star restaurant? Go for it! But I won’t have that luxury when I’m financially free. We’ll have to budget and shit.
Does the stress of having to spend within a fixed budget outweigh the freedom from having to work? This takes me back to my original point — maybe I should just work a while longer to give us more breathing room. Who knows. This is where my prior optimism hits the wall of reality.
P.S. I hope you all like the site redesign. I think the new page design is more readable, although I did like the header image in the old version of the site that invoked a melancholy yearning for freedom.