I’ve Moved the Finish Line

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.

 

What Changed

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.

new FIRE date

 

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:

New FIRE date

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.

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38 thoughts on “I’ve Moved the Finish Line”

  1. That’s excellent news! The market certainly has been on a tear lately. This last quarter my investments went up by over twice my income over the same timeframe. Coming as an active investor through the dot-com crash and the Great Recession, it does make me a bit nervous, but I’ll take it. I’ll start getting more concerned about the market when I hear more people bragging about all the money they’ve made. That’s usually a sign of a bubble.

    1. It does feel pretty good when your money is working at least as hard as you are. I’ve never weathered a recession – I was invested in 2008, but I was in the phase of my life where I completely ignored my money, and that happened to serve me well.

  2. DAYUM, those are amazing annual savings!

    And, actually, December 2018 is our currently projected “soft FIRE” date (4% withdrawal). FIRE twins! ^_^

  3. Wahhhooooo!!!! So happy for you! Also I’m for sure coming to visit you when you make The Big Move. It’s been a year since I was there and I want to go back!

    1. Thanks Gwen!

      I’m excited to be visiting again in November – we’ll be there over Thanksgiving. And we will be happy to host you – as long as being covered in much fuzziness is your thing. Dog BITA is _very_ generous with his fur.

    1. Thank you Vicki – I can’t wait to become a part of the group that you are happily already a member of.

  4. Sweet!! Same thing happened for us. Our original target date was 2020, but then things snowballed on us, and I left a few years early. We did have some good saving years, but never quite hit a quarter million year over year, congratulations on kicking ass!

    Spain would be an awesome retirement spot! I haven’t been to Amsterdam yet, but would love to check it out. Can we visit when you get there?

    Cheers to your new finish line 🙂

    1. It feels surreal – the idea that in just over a year (markets willing and the creek don’t rise) I’ll be joining the likes of you – folks whose lives turned me an ugly shade of Hulk when I read about them on their blogs.

      And yes, we will be happy to host you should you decide to wander our way (that offer stands now too, while we are still in California).

  5. I love Amsterdam. Great pic and definitely the city that’s top on my list if I were to relocate to Europe. It is awesome. However, I didn’t go in the winter where it is freezing!

    How much cheaper do you think Amsterdam is if SF Bay Area is a 100 out of 100 on the cost index?

    The only thing that bums me out is that your husband needs to work for three years after you retire! Any chance of tightening that gap? I guess he is younger, so all is fair.

    Sam

    1. I have visited Amsterdam 6-7 times in the winter – it is cold, but not unbearably so. I worry more about the annoying dripping rain there than about the cold. Overall though I think having some of my favourite family right there will outweigh any weather related annoyances.

      According to Numbeo, Amsterdam is about 86.3% of the cost of San Jose. One big cost that Numbeo does not take into consideration though is that of healthcare, where Amsterdam is way, way cheaper than here.

      About Mr. BITA working longer – it bums me out a little but bothers him not at all. He loves his work, and I doubt that he will actually retire even once we hit our ‘number’. The age difference certainly helps it feel ‘fairer’. Also, depending on the circumstance of our relocation, one of us may need to hold a job to secure residency abroad, irrespective of whether or not we need it from a money perspective.

  6. Good job bringing down the “cubicle prison” sentence! Way to go, Mrs. BITA. How does Amsterdam fare for American retirees from income tax perspective on dividends and interest? Also, how’s the health care situation for foreigners in Netherlands – do you get same benefits as the Dutch once you pay into their system?

    1. The Netherlands has no taxes on capital gains or dividends, because it has a wealth tax instead. I’ve included a link in the article above to how the wealth tax is calculated – the short answer is that if you assume that you have $2 million USD invested, and ~30% of that is in your 401ks (which are exempt from wealth tax), you will end up paying ~$16,800 in wealth tax for the year (or about .84% of your taxable investments).

      And yes, expats get the same benefits as soon as you start paying into the system. For the nice low cost of somewhere between 200 to 300 euros a month our whole family will be insured and our assets will not be depleted even if all 3 of us are struck down by cancer.

  7. That’s incredible! One of the main items for me is to secure a pension from this soul sucking job. That happens in 7/2021. So the earliest I would be vested in said pension is that date. I’m curious that once I get there, if I won’t get that “one more year” syndrome (at least to pad the first quarter of 2022 with HSA and 403b to the max before riding into the sunset. The pension is a key and a guaranteed additional check along with social security and a 3.5% withdrawal rate. I’ve calculated that I’d need a job that paid about $40K more a year for 4 years to make up for the pension which begins at 65 and is a lifetime benefit.

    I dream of Latin America daily and “know” that unless drastic change occurred, I could live off much less, but humans as a whole, completely suck at predicting what will make them happy. I just don’t want to be trapped by my own delusions of future jubilance at this point. So, sucky job at 4 days a week until 7/2021 for me.

    I’m so so so happy for you, though! Awesome job! Amsterdam’s gain would the USA’s loss but I get it.

    1. Ah, a unicorn! One of those rare and special beasts that can still get their hands on a pension. Is your pension COLA adjusted? Waiting for it certainly sounds like the right decision for you.

      “I just don’t want to be trapped by my own delusions of future jubilance at this point.” So much wisdom right here.

      Thank you for your wishes Bucket Babe!

      1. NOT COLA adjusted – lifetime and it’s enough to wait for although I run scenarios all the times which guarantee success without it….just seems silly to leave money on the table, you know?

    1. Boulder is on our list, so you never know – if something goes awry with our Amsterdam plan, that is where we may end up!

  8. That is amazing! So happy for you guys! What I was doing at 40 was starting a family – lol, 15 years and 5 kids later I am nowhere near FIRE and am ok with that. But I love following along on your, and other, journeys like this. It is my hope that I can inspire my kids to do what you and so many others do. Congrats. Can’t wait to see where you finally choose to live 🙂

    1. 5 kids! Starting at 40! We have the one, and I had her when I was 35 years old. The thought of having another makes me want to go and have a quick lie down. Your kids are lucky to have a parent who is able to show them the way financially. So many of us (myself included) had to stumble upon it much later in life after we had already wasted so many precious compounding years.

  9. Congrats and welcome to 2019!!

    Our date started off like yours, further away due to planning for needing more $$ than we realized. After 3+ years of tweaking, adjusting and being practical about it, our date moved up to 2017. However, with Mrs. SSC losing $100k in income due to taking the teaching gig, we got knocked back to 2019. It’s kind of like a slower, duller, version of soccer – the date moves up, it moves back, it moves up again, back to the middle, it moves to the outside… Well, you get the idea. 🙂

    Barring any craziness between now and then, well and keeping the home construction costs in line, we’re pretty well set for 2019 after bonuses and stocks vest. Yeah, free money! 🙂

    1. So pleased to be joining your most estimable cohort good sir. 2019, here we come! I hope that we’re going to be meeting in Dallas later this month.

  10. Congratulations! I hope the remaining 443 days go faster though I suspect it will feel excruciatingly slow! Will you be buying a home in Amsterdam?

    1. Thank you!

      We will eventually buy, but probably not as soon as we move. We’ll want to rent for at least a year to make sure that living there does actually make us happy. We have not yet decided if for that year we should rent out our current place and sell only when we are ready to buy there, or whether we should sell before we move. Decisions, decisions!

  11. Oh, man, that is uber-exciting news! Congratulations on moving up your date! (Just out of curiosity, what would the blog’s name be if you had chosen 40 originally?) Holy cow, less than a year and a half for you! 2019…ahh, the year when I’m slated to return to the workforce after SAHM-ing for three years. Amsterdam is definitely on my “short” list to visit (if “short” can include about 60 different cities)!

    1. Good question. Chalis (challis?) is the word for 40, but that would not have even occurred to me to use that as a name. 42 has a magic and meaning all it’s own (Thank you, Mr. Adams, may you RIP).

      Oh that is a long gap. Are you nervous about jumping back in? Excited? Perhaps both?

      1. I’m a huge HHGTTG fan (see my email name) and love the 42 ref, but gotta say… if chalis is pronounced with the ‘ch’ sound, Mrs. CITA would be a Cheetah…which seems suitable given your speed to FI!

  12. I knew it! After reading your posts about the awesome progress you’ll were making all through 2017, I remember thinking that “these two should just quit the rat race, dates be damned”. And then when I read your post about Amsterdam this summer, it was very very clear where you were gonna end up!

    So yeah – 2019, here come the BITAs!

    1. : )
      The numbers have been clear for a little while now, so you absolutely read the tea leaves right on this one. It took me a little while to make an announcement on the blog – almost as if saying it out loud would jinx it somehow. Fingers, toes and various other body parts crossed that 2019 it will be.

  13. Great work Bayalis is the Answer. Look forward to reading about the rest of the journey and the future move. You provide inspiration to the rest of us.

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