Big news today!
I am super excited to announce that I am pulling in my FIRE date, blog name be damned. I am thrilled and terrified, and so happy that I have you to share this with.
A History Lesson
A quick recap for those of you that haven’t been around since the beginning of Bayalis time.
When we first discovered FIRE, our finances were not in the best shape. We were making good money but we had never tracked how much we spent. Having no freaking clue what our expenses looked like made it a trifle tricky to nail down our FIRE target number for our planned withdrawal rate of ~3.5%.
FIRE target number = 28 * Annual expenses
You can see how not knowing our annual expenses made solving that equation a bit awkward.
If that wasn’t challenging enough, we also didn’t know where we wanted to live. We knew that we had no intention of growing old in the Bay Area. So we had ruled out one city, leaving us with only a few thousand to choose from.
Beset as we were with uncertainty, we still wanted a target to chase. One needs a target if one is to streak off like a bullet. Sans target one is more likely to dawdle about and twiddle one’s thumbs.
So we set ourselves a made up target (read plucked a large number right out of thin air) and started to run towards it. Our initial plan looked like this:
2016: Add another $20,000 to the stash before the end of this year.
2017 – 2020: Save at least $120,000 a year.
2021: I become financially independent at the grand old age of 42. Celebrations ensue. Mad rejoicing in the streets as I sail away into the sunset.
2022: We sell our house, add a nice chunk of change to the stash and move to some yet to be determined place in the world that has the following properties:
- The cost of living is lower than where we currently reside. This one is easy. Almost anywhere else in the world qualifies.
- Our new location must have an excellent walk score.
- Mr. BITA can continue to work there and make enough money to keep us from withdrawing from our stash. We don’t need to save any more, but we aren’t allowed to touch the stash just yet.
- Our daughter has access to good public schooling
- Our family must have access to healthcare that does not require us to hand over a kidney and our first born child in order to have a wisdom tooth removed.
2026: Mr. BITA is 42 years old and our Stash has come of age. Jubilation in the streets. We start living off our Stash.
(Notice all those 42s in there? That is what gave this blog its name).
We started tracking our expenses and figuring out where we felt comfortable cutting back. We also started earnestly trying to figure out where we wanted to live once we had a large enough stash.
The first thing we learned as we journeyed towards FIRE was that we were capable of saving way more than $120,000 a year. That was a most pleasant surprise. We are going to close out this year with annual savings north of a quarter of a million dollars.
The next big step was reducing the world of possibilities for our new home to a few practical options. We accomplished this, and I wrote about it on the blog. TL;DR? We are considering Amsterdam, Spain, Boulder and India. At this point Amsterdam is the clear front runner.
Given what we’ve learned about our own spending habits and what our research has shown us about our target destinations, we now know that we will need less than we had originally envisioned.
The cherry on the cake? This beautiful bull market has propelled us further faster than we had imagined.
The New Plan
Of our four new possible homes Amsterdam is, apart from being our favourite, also the most expensive of the lot, so we’re planning for Amsterdam. That way, if we change our minds, we will have more than we need.
This is what our new plan looks like:
If you are curious about the wealth tax in the Netherlands, you can read about it in this post.
Phase 2 in the diagram is reduced or eliminated entirely if we choose a destination that is not Amsterdam. Even if we don’t need more money in the Stash, Mr. BITA might still need to work to secure residency in another country, depending on which destination we choose.
The size of the Stash at the end of phase 1 does not include the equity we have in our current home, nor does it include the money in a 529 plan earmarked for Toddler BITA’s education.
And finally, after stringing you along for the length of this post, I give to you our new FIRE dates:
Instead of Jan 2021, I expect to be able to quit my job in Jan 2019. I will be 40 years old.
At a market growth rate of 5% a year, Mr. BITA will be in a position to retire by the second quarter of 2022. He will be 38 years old.
Jan 2019 is a mere 443 days away. This is getting real. I can see the finish line and I am walking around with a big goofy grin.