Where We Are on the Path to FI
The story of how I discovered the FIRE movement is one for another day. (Stay tuned- it starts on a weekend trip to the mountains after passing the most racist series of flags we have ever seen in one place… and that’s saying something as we live in the South, friends.)
Today I want to share some high-level info for you spreadsheet nerds (read: badass queens) on where we stand currently on the path to financial independence, how far we’ve come and how far we have left to go as of the time of this post, January 2025. The latter part is a bit of a guessing game, but we are narrowing in and certainly have a date circled on the calendar.
At the time of writing this post we just hit our 6 year anniversary of being on the path to FI.
In the past five years:
I started & shuttered a travel company (thanks, Covid!)
We purchased & sold two short term rentals
I went back to teaching in March 2023 after five years away, and started maxing out both the 457 & 401k offered
I left teaching in November of 2024 without securing another job first due to high levels of stress/anxiety (THIS is the real power of being on the path to FI!)
We started tracking our spending using Mint (defunct) and now Monarch (referral link)
We started using Ramit Sethi’s Conscious Spending Plan, which helped tremendously with my feelings of scarcity
We started dumping all of our extra money into VTSAX, a fantastic low-cost index fund, a la Simple Path to Wealth
We added an international index fund and bonds to our portfolio for diversification
Ryan started maxing his 401k
We started maxing out both of our Roth IRAs
We consumed a bazillion hours of personal finance related content
We sold our primary home and started renting
Etc etc etc
What we’ve also done, which I’m really proud of, is continue to spend on the things that matter most to us- spending time with family & friends, travel, donating to causes & candidates we believe in and romantic dinners out.
So! After all of that and 6 years in, where are we? Drum roll please…
We are 76% of the way there!
Knowing where we stand now, any guesses about how soon we can retire and start slow traveling & hiking all over creation?
The goal, friends- that shining light at the end of this tunnel is… sometime in 2026.
If you’re wondering how we get from 76% of the way to our financial independence number in just over a year, I get it. It seems impossible. But that’s only because we don’t plan on getting to 100%. We don’t need to.
What we’ll have by that time is an extremely conservatively invested pot o’ money to last us the first nine years of our retirement- until Ryan turns 59.5 and can start pulling from his traditional retirement accounts.
Everything that isn’t in that initial pot? It keeps growing! Through the magic of compounding, we leave it alone (save for a yearly rebalance) and it grows to the number we need it to be by that time (and likely beyond that number).
How do we know? Historically, the S & P 500 has returned an average of 10% per year. Accounting for the average rate of inflation of 3%, we can pretty safely assume that our portfolio will return 7% per year.
Once we know that, we can pop over to a compounding interest calculator and figure out the rest. And you can do this too- it’s pretty fun (and also possibly life-changing) to realize how much you’re likely to have upon retirement. You may just choose to work a bit less or have a bit more fun in the meantime. #winwin
PS: If you enter your info in the calculator and it gives you a scary number instead of a fun one- never fear. There are a gazillion resources to help you get back on track AND it is never too late. Just start today.
What if our accounts don’t grow like we hoped? Well, there are plenty of levers we could pull, friends.
We could:
Snag a part time job doing something fun for awhile
Spend less, using geoarbitrage or simply by cutting expenses
Live for “free” using housesitting in exchange for a free place to stay using a site like Trusted Housesitters
Go back to the workforce full time
Is there a stamped and certified 100% guarantee that this will work? Of course not. But there is an easy (and often free) way to find out just how likely it is to work, using cFIREsim or any other robust retirement calculator you find online. (That’s your challenge for today! How far away are you from FI? Put it in the comments below!)