July 2021

Two thirds of summer is now gone! That should be enough to light a fire (pun intended) under anyone who values …you know, life.

A very busy July for us. Sporting activities continued in full swing for the first three weeks of July and then started to wrap up for the early summer (Spring/Summer) season and the pace will pick up back again after the second week of August. We took a long – over 2,000 miles – road trip for a week and then chilled out the last week in July. Temperatures have somewhat returned to their averages and we’re enjoying probably the perfect time right now.

Oh, and the valuation of our assets crossed $1.5M and Net Worth rose by almost $23k.

Here is our spending for July. This is on the higher end of variable/discretionary spending for any given month.

The biggest category of expense was our vehicles, where the mid-year insurance premium was due. We also had to renew the tabs on one of the cars. Because of the road trip, gas expenses was almost double the monthly average; as was eating out. When compared to our May expenses, which was one of the lowest, July was almost $2k more. August should be somewhere in between.

But all’s well. Most of these expenses were anticipated. And we do have close to a $100k just laying around 🙂

Here’s wishing all of you have a splendid August to close out the summer. Live life. Cheers!

Vanguard opining on the FIRE fun

Earlier this month, Vanguard published this report on FIRE and set some anti-FIRE cats amongst the proverbial pigeons. You know, pigeons like us who have bought into the “idealogy” that you really can’t afford to be chained to a job for a paycheck for decades and decades. You need to get out of the rat race as soon as you can, as if your life depended on it.

The article, bullet-wise (as all good articles should have), talks about:

  • the dangers of blindly following the 4% withdrawal rate (given how the market is expected to perform poorly over the next decade),
  • using appropriate retirement horizons,
  • the effect of the cost to invest,
  • the importance of having a diversified portfolio, and lastly,
  • the need to have a dynamic spending strategy

All true. And most rational people pursuing/in FIRE would say so. These factors are nothing new. The 4% SWR is not gospel, the recent returns of stocks is the outlier than the norm, investing costs are to be merciless slashes, diversifying, and having a spending strategy – and even an earning strategy in FIRE – that is flexible, are all built into the plan!

Here is the real, inflation adjusted, historical return YoY (CAGR) of the stock market since 1871. Yes, over 150 years worth of data. It stands at 7.06%, adjusting for inflation and reinvesting dividends, for over a century and half. You can select the time period you want – MoneyChimp Market CAGR.

Here are two simulator applications, that runs multiple iterations (hundreds) of how a portfolio performs over extended draw down periods. I’ve run 3 simulations on each. (there are some underlying assumptions, such as stock/bonds allocation, expected inflation, etc. I encourage you to explore and play with the tools):

  1. Portfolio of $1.5M, expected spending of $50k/year, inflation adjusted, to last for 50 years, withdrawal rate of 3.33%
  2. Portfolio of $1.36M, expected spending of $50k/year, inflation adjusted, to last for 50 years, withdrawal rate of 3.67%
  3. Portfolio of $1.25M, expected spending of $50k/year, inflation adjusted, to last for 50 years, withdrawal rate of 4%

cFIREsim

Scenario 1 – Success rate of 99%

Scenario 2 – Success rate of 93%

Scenario 3 – Success rate of 84%

firecalc (running the same 3 scenarios)

Scenario 1 – Success rate of 96%

Scenario 2 – Success rate of 91%

Scenario 3 – Success rate of 77%


If someone told me that I’d have between 77% and 84% success rate of an endeavor that I was about to embark on, I’d take those risks. But we are almost hard wired to be extra cautious about money. Especially our own money. So I understand if the 4% rule is bent into the 3.33% rule to get into the the 90% certainty range.

And, Vanguard keep those costs low. We’re all good here.

June 2021

June was hot. The weather, I mean 🥵 We scored the hottest start – first 11 days – to June, since temperatures started being recorded, over a hundred years ago.

The markets weren’t bad. We tacked on over $25k to our NW. The next milestone is to see our retirement accounts, in aggregate, cross the million-dollar mark threshold.

We’re not publishing spending report for this month but it was over $2.6k, almost a full $1k more than May. The report for July will be interesting – stay tuned.

Summer is going well. Sporting activities from spring and early summer are wrapping up. We are reclaiming some of the evenings of the week, a great many of which were spent on the fields 🙂

So long, cheers!

May 2021

A tepid May, in terms of the markets, the weather, and most things going on. And that is absolutely fine!

Our NW increased by over $12k. Cash balance is inching towards the red line of $100k.

One slight change we’ve incorporated into our monthly posts is to do away with anything after the decimal. A simple format change in Excel and I don’t know why we didn’t do this earlier! The tables looks way cleaner now.

Last month we also tracked ALL of our variable spending, to the last penny. We know on average how much we spend and we are both very conscious about discretionary expenses but this was the first month we tracked and consolidated the outflow. This is how it looks like. We won’t be posting this information every month but rather show some extraordinarily high or low months. May was probably lower than average.

Summer is here! Hope all of you reading this will get to enjoy the next few glorious months. Cheers!

April 2021

$53k increase in net worth in April. Nice.

Cash balance has increased to almost $94k, which is I N S A N E! Two major influx of funds: tax refund of about $3.2k and the third stimulus check. We will not let this go over $100k!

Major expenses for the month was $3.8k we had to fork out for some long awaited dental work for M. We also paid about $850 extra towards our mortgage this month.

We are dutifully enjoying the weather – highs of 60s and lows of 40s make for wonderful time to spend and sweat out in the sun. We will continue this trend, even when the temps rises, in May.

The pandemic, here in the US, seems to be drawing towards a close. In other parts of the world, its rearing his ugly monstrous head in painful fashion. Our hearts go out to those in the front line of the attacks.

March 2021

Another month, another $45k increase in net worth. This is getting boring. Yawn … 😀

On a serious note, I’ll take this nicely purring along markets any day. Or month. We’ll make hay while the sun shines. And when the inevitable correction does come – in a week/month/year – we will take advantage of that too and throw more of the stockpiled cash at it.

Cash reserve increased further as W’s sizeable annual bonus came through. Quite soon we’ll be sitting on a pile of doing-no-good $100k. That’s ok. This would more than carry us for a year if all our sources of active income stopped suddenly one day. Some of it is earmarked for vacations (that we didn’t take in 2020, and some that we will take in ’21 and beyond), some for taxes (that we thought we’d owe; but no, for the first time since we got married, we’ll get a refund!), some for property taxes (escrow that has been decoupled from our mortgage, and we pay directly to the county twice a year).

Another milestone: FI funds for the first time crossed the million dollar mark. This is funds that we can literally live off. I’ll have to sit down and do an analysis on what is the optimal value of this metric for us, but I have a feeling that $1.5M should be sufficient.

Spring is here. Green is sprouting from the depths of the grey and brown. Just two more months till school wraps up and summer starts. Life is – to borrow a mechanical analogy already used in this post – purring along nicely. Cheers!

February 2021

Almost $31k rise in net worth in February.

Markets swing in the right direction was the main cause of the increase.

February, as mentioned in the last post, was a deep freeze. Spring, though, has come early here in March. There have been already 60°F days! We’ve started taking walks and bike rides. Vaccines are around the corner. Life is good.

January 2021

The last week of January, with the Game Stop fiasco, kinda spoiled the month for us. We eked out a meager $1,900 of growth.

As mentioned in December we’re debuting a new look in our monthly reporting. Hope this is easier on the eyes. (To us, in our Excel doc this looks pretty good. The jpg version on here might not be the most fresh-est)!

We’ve introduced a sub group in the Assets class. This is the combined value of our retirement, brokerage, and cash. Basically all that is fairly liquid and will grow – in other words, our FI (Financial Independence) or FU money.

Net worth is good to track but if both of us ever decided to call it total quit from any kind of money making endeavor, the FI value will be the true determining factor.

Major expense in January included $837 for the semi-annual insurance premium for our two vehicles and $200 for M’s yearly Mint Mobile charge. That amounts to $16.67 monthly charge for 4GB of 4G LTE. Hard to beat!

As I type this out on Feb 13, we’re in the middle of a deeeeeep freeeeeeze. We’re talking about sub 0 temps, with wind chills reaching -30° F!

All’s well though. Life goes on.

2020 in review and looking forward to 2021

A pretty good year for us, at least financially! After various ups and downs over the course of the year, Net Worth increased (net) by over $179k for the year, and in July for the first time ever, we *officially* became millionaires 😀

This increase is lower than the increase of $231k in 2019 but a lot was different.

Like a godforsaken pandemic different.

We effectively going to a single income family different.

Since we started tracking and documenting our financial journey from beginning of 2017, we’re amazed how far we’ve come. In January 2017, our net worth stood at $458k. In 4 full years, we are at $1.135m. Incredible!

We made contributions to the following accounts:

  • 401(k) – $19.5k (only for W)
  • IRAs – $6.5k
  • Brokerage: $2.6k
  • 529: $2.15k

Liabilities rose due to us purchasing a car, financed at 0%, after selling off one of our old vehicles.

This year we also refinanced our old 30-year 3.875% fixed mortgage (which we were in year 5), to a 15-year 2.625% fixed. In the process, we decoupled the escrow for property tax, and our monthly mortgage payments now go only towards principal and interest, with the payment amount remaining almost same as before the refinance. To give you an idea of how much interest we were paying on the 30-year note: only 52% of the monthly PI payment was going towards principal, whereas now 68% of the monthly payment go towards principal.


Goals for 2021 will be soft. After the year that was 2020 we need a *normal* year – plain, old fashioned, boring – to calm things down.

We obviously have no control over how the markets behave. What we do have control over is how we invest our money and how disciplined we stay. To that end, these are the numbers we hope to hit (contributions to different accounts):

  • 401(k) – About $15k
  • IRA’s – $12k (this might be the stretch goal)
  • Taxable brokerage – $3k
  • 529: $2k

Non-financially, here are the few things we’d like to do this year.

  • Meet up with friends and family!
  • Go on at least one long road trip of 7 to 10 days
    • Have couple of more shorter ones
  • Enjoy the summer
    • Hopefully have a number of cookouts at our place and few more at friends’ places
    • Kayaking
  • Maybe one trip involving air travel
    • International perhaps ..

Here’s hoping to an amazing 2021 everyone! May your life, and journey towards FIRE, be a glorious one.

December 2020

A good month to wrap up the year. And what a year it was.

After November’s explosion of $91k increase in net worth, this month’s jump was a mere $39k 😀 It happens. Readers will also know that we’ve had months of $53k and $75k loss. We’ll do a yearly review post shortly.

This December was quiet. After some suspenseful days for D, we eventually got enough snow for a white Christmas! We spent socially distanced time for the holidays. Never more than with one other family. Good food was had and time was cherished with loved ones.

Here’s hoping to a better year for everyone, cheers!