In Case You Missed It, I Am Financially Independent.

After my last post went live I got this text from a friend…

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And yesterday morning I received this DM from Mrs.1500

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What??!!

On Wednesday afternoon I finished a 3 day trip with a harried 11 hour day that started in Albany NY at 4:30am.  After 3 flights I landed in Chicago, rushed to my friend’s house to pick up Bubba, drove 1.5 hours home, changed out of my uniform, broiled a quick tray of bean nachos and jammed them down my throat before rushing to a Rover clients house for a meet and greet. From there, fearing the $1 late fee, I drove to return my wifi hotspot before the library closed at 8pm.  As soon as I got home, and with no wifi to distract me, I hurried through my presleep routine like a zombie on cocaine and finally crashed my head into my pillow at 8:11pm.  It wasn’t until morning (and the tweet referenced above) that I realized the Marketwatch story had broke.

Apparently, it’s time to address this…

After 4 years of thinking about it and 3 years writing about it, sometime in the last 6 months, I became financially independent – FI.  

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According to the article/video, using the 4% rule, I have reached my FIRE (Financial Independence/ Retire Early) number of 24k/year.*  This is true.  But not because I have 600k.  I don’t.

You see, the actual numbers of FI are sometimes difficult to pin down particularly when real estate is involved.  I stopped publicly updating my net worth 2 years ago but in an effort for full transparency (and especially because mainstream media loves to pick shit apart), I figured I’d put it out there one last time.  So here is a breakdown of my FI calculation today:

  • 445k in assets (about half is in not yet taxed 401k but all is accessible with a bit of pre-planning ~ explained best by Mad Fientist HERE)
  • 100k Condo**
  • 36k Caboose***

Total assets 581K.  

Not exactly 600k. But who’s counting? The market goes up and down on a day to day basis so a 20k swing isn’t much of an issue. What is more important to me is how much money do my assets make?  That’s a completely different number and the one that I am basing my FIness off of.  The question you have to ask yourself is “Does my investment income cover my expenses?”  For me, that answer is yes.

Here we go:

According to the Mad Fientist’s lab report, my current cash assets are bringing in $1468:

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Above graph based on a 7% growth rate, 4% withdrawal rate, and 2k a month in future expenses.

Not included in those numbers are my properties. 

Though my condo is valued at 100k, I bought it in cash for 64k in October 2014.  In 2017, I started renting the condo for $950/month.  The current lease is $975/month.  This property was making well over the 1% rule (explained best by Paula Pant) from the beginning and I could easily be getting $1100 for it but have chosen to keep the rent low for one single reason – my tenant is a landlord’s DREAM COME TRUE!!  He pays his rent early direct deposited to my account, he never calls to complain, and more importantly, no one calls to complain about him.  He is single, has no pets, and stayed at his last apartment for 6 years.  I won’t be raising the rent for at least another year.  I am keeping him as long as I can.  Anywho, minus taxes, assessments, and any repair work over the past two years, my property nets $700/month.

When adding my assets ($1468) + rental income ($700) together, my total income is $2168/month.

My total expenses for the past 2.5 years (January 2017-June 2019) = $59647.**** It’s amazing how much you can live on once you lower your housing costs. I attribute this to be the sole reason why I hit FI so quickly.

Divide that $59647 by 30 months (or 2.5 years) and my expenses averaged $1988/month.  

I currently have ZERO in liabilities.

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Now, I’ve said it before and will say it again, don’t frugal yourself into a corner.  Do not decide that the lowest possible number you can live on is the number you should settle for the rest of your life.  The scarcity mindset that follows is brutal. I know…

In 2016, my first year of tracking my spending, I went down to bare bones everything.  I wanted to see just how little I could spend and it turns out $1500/month and 18k a year was that number for me.  I could have been FI a few years ago but in order to do that, I would have had to live in my paid for condo in Chicago and really cut back on some of the stuff that I enjoyed doing like dining out, traveling (though I still managed to fit a little of both in that year), and taking chances.  Some may call that LeanFI.  I call it depressing.  Don’t get me wrong, I think it is super helpful to know the smallest amount you can live on for all those Just in Case scenarios like if the markets tank, aliens invade, or the sky falls.  But for a full-time retirement plan, lean anything is a scary place to be.  I prefer to aim for comfy.

24k a year to me is comfy.  I am a 40-year-old single childless frugal spinster badass with a penchant for cheap travel and tiny house living.  That sum of money has allowed me to do some HUGE things in the past 18 months.

Here is a not so conclusive list of joy bringing, money spending things I accomplished within that 24k/yr spend:

  • Lived in Denver for a year despite the HCOL
  • Traveled to Europe (Hungary & Prague in 2017 / France, Netherlands, and Belgium in 2019)
  • Did a cross country road trip in 2018
  • Visited with family and friends in LA, Portland, Denver (before I lived there)
  • Dined at restaurants way too many times to count
  • Drank lattes & ate avocado toast with reckless abandon…sometimes at the same time
  • Traveled to meetup after meetup after meetup
  • Hosted meet up after meetup after meetup after meetup
  • Went to Camp Mustache and FinCon two years in a row (that shit is costly!)
  • Attended multiple concerts and other sorts of pricy entertainment
  • Built, filled, and planted multiple raised garden beds from Denver to Georgia to Wisconsin
  • Replaced my faded/re-dyed black jeans – twice!
  • Bought all sorts of random stuff on Amazon that I didn’t need but just wanted.

I have certainly not been holding back on “Experience Spending” at all.  I also haven’t held back on replacing items that make me happy or, again, comfortable…things I might have done had I stuck to my LeanFI budget.

All of this to say that I am financially independent.  FI.  Not LeanFI, not FatFI, just FI…ComfyFI.

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Back to the Marketwatch story and the title itself.  The title is a bit misleading.  It reads “This flight attendant has enough money saved to retire at 44, but she wants to keep working”.

It should actually read…

“This flight attendant has enough money saved to retire at 40, but she wants to keep working until 44”

Regardless of the title or the accidental miscalculation, the overall story is correct.  I don’t want to quit work at the moment.  After almost 18 years on the job, I have no interest in leaving with the promise of lifetime flight benefits being just within reach.  With 4 years to go, I am perfectly content working part-time, getting super cheap health benefits and figuring out what retirement looks like for me.  And most importantly, what healthcare in the US looks like in 2022.  Maybe I will quit then, maybe I won’t.  The benefit of being FI is that I don’t have to decide.  Not now, anyway.

Until next time…

 

Shit that I didn’t think needed to be said but apparently needs to be said…

*You can read all about the Trinity Study and 4% Rule HERE and HERE.  Whether you believe in it or you believe I should be basing my future retirement off of it is not up for debate.  After having lost my properties a few years back, I am far more conservative and risk-averse than I ever was.  I am continuing to work for the next 4 years to provide a “what if” cushion.  I haven’t accounted for social security at all in my future numbers so if it is still around, it is likely to be a bonus to my nest egg.  I also haven’t accounted for future employment, passion projects that spit out cash, or the $20 my grandma gives me for my birthday every year – all bonus money!!  All I have accounted for is the money currently sitting in the bank, in my well-diversified 401k, my cash cow property in Chicago, and the caboose that I write this note from.  I am likely to add more real estate to my portfolio in the coming years but I have very specific rules I follow for real estate and it’s a slow process to find “The One”.

**I hate real estate estimators but I find Redfin to have the most accurate numbers, Zillow is a joke:

 

 

***My monthly expenses don’t account for two large purchases that I made last year – my new used car, a 2007 Honda CRV (9k), and the caboose I am currently living in/renovating.  Those are once off luxury items not necessary to my overall financial plan going forward.  The caboose brings in a tiny bit of rental income but since it is the first year, I am still not comfortable counting it as an income producing asset.  Being that I am still working, I like to frame those purchases as work paid, not asset paid if that makes sense.  Had I not been working and living primarily off of my investments, chances are I would not have spent 1.5 years of living expenses on a luxury item such as a caboose.  Being that I haven’t retired and my income isn’t “fixed”, I have the option to do just that.  Another benefit of being FI with an income!  Super silly purchases that don’t need to produce anything but fun.

****I refuse to address ridiculous statements saying that you can’t live on 24k/year.  Many people can. I have. And I know plenty of others that have too – even with kids.  Of course, there are extenuating circumstances, but they are not part of the majority debate.  The real question is, do you want to?  If not, move on.  There is nothing more to see here. 🙂

 

26 thoughts on “In Case You Missed It, I Am Financially Independent.

  1. Way to go, Miss M!!!! I am super excited for you! This is truly amazing and worth celebrating!

    We are so fortunate to have the best job in the world. Hans and I have been having a fabulous FI summer thanks to the flexibility afforded us by the contract negotiated by our labor union. We worked last at the beginning of June. With benefits like free flights and free insurance (I’m on the original Regular Plan), there is no need to race to retirement.

    Enjoy your summer! I hope to see you in the skies if you or I decide to pick up a trip here or there this fall. 😘💖

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  2. Congratulations – you have totally earned it. You are an inspiration to the rest of us still on the journey and I hope you hitting FIRE doesn’t mean less blogging 🙂

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    1. Thank you so much for your concern!!

      I don’t believe I am rolling the dice at all. I am very much aware of the shit healthcare system in our country which is why among other reasons I didnt leave my work place the very second I hit my FI number. I’m not sure if you watched the video or read this entire post, but my plan is to stay in my job for the next 4 years. In that time, I won’t be touching this nest egg at all which means it is there to sit and grow for the future. As I near my actual retirement date in 2022, I will shift my focus to whatever health care system is in place at that time. As I am sure you are aware, the Affordable Care Act is under a bit of stres these days. Will it be revised in the coming years? I don’t know. If it isn’t, there will still be some other private insurance I could purchase at that point.

      I would rather take this gamble now when I am young(ish) than stay in my job another 25 years “just in case” I get sick or more likely, hurt. In my line of work the risk of getting hurt is very high and gets higher as I age. Weather patterns have shifted over the past few years causing turbulence-related injuries to increase far more than when I first started flying. In fact, a dear friend of mine is permanently disabled due to the jumpseat collapsing on landing and severing his Achilles. Do you think his insurance worked for him long term?? No. It got him through the surgeries but it wasn’t long before he was forced into retirement and on disability…long before the age that Medicare would kick in. But really, your main concern isn’t insurance, it is the unknown.

      The unknown comes in many different forms. What if the market crashes? What if I get in an accident? What if I get pregnant? What if I get cancer? What if nothing happens to me but it happens to my family members and I need to care for them?? I look at all of these questions and have decided that I don’t want the fear of the unknown to be in the driver’s seat of my life. Some things you can plan for, others you can’t. Regardless, I am in a far better place financially to deal with most of those issues than most of America.

      We are ALL one catastrophic event away from a financial pitfall. Does that mean we should all live in constant fear? We are also one giant meteor away from extinction. When you think about it that way, why bother going to work at all?

      All this to say that I am aware of the risk of not having insurance and I have no intentions of not having it. I also have no intentions of being a flight attendant at 65 years old. I will figure out what exactly it looks like for me in the coming years. I managed to get this far on an hourly job with no college degree. I think I will be able to manage the rest. Oh, but in the meantime, you best take care of yourself!! Statistically women outlive men. I would hate for you not to be around to say “I told you so” if the occasion should arise. 🙂

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      1. A stock market decline is pretty much assured at this point, as the yield curve is almost inverted (the 2-yr vs. the 30-yr yield is the most important metric : https://stockcharts.com/freecharts/yieldcurve.php). I imagine healthcare for a single person right now is $4k/year, so you probably need another $100k in liquid assets to for healthcare for the next 20 years. Also, according to Vanguard’s John Bogle, stocks increase in value due to dividend yields + earnings growth ( https://www.vanguard.com/bogle_site/sp20071114.html ) for a total of 9.5% growth (4.5% dividend + 5% earnings growth). The unsustainable part of stock market returns is price/earnings multiple expansion. Right now p/e is 22x which implies an instantaneous 1/3rd decline in the value of stocks ( https://www.multpl.com/s-p-500-pe-ratio ) since the long-term average is 15x. Also we are starting from 1.86 dividend rate which is a about 2.5% short on stock market growth ( https://www.multpl.com/s-p-500-dividend-yield ). So it’s very high risk to retire now when we are many peaks in the cycle. Try in about 3 years after the Trump bubble is finished.

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        1. Thanks, Don! So it looks like I will be hitting it just right in 4 years. 🙂

          The joy of having cheap air travel and a low col is that I can go ANYWHERE in the world to ride out a downturn. And America is by many standards more expensive than other countries. One of my bucket list items is to learn Spanish fluently. A year in Mexico or even Spain would be far cheaper than a year here. I have many contingencies if I do time the market poorly but these articles only allow for so much detail.

          The point is that it IS possible to retire early and not run out of money. And the purpose in many of us putting our financial plans out there is to get people to understand their own finances better. Start spending intentionally. Retire (at any age) with a good nest egg. That’s it! There always going to be people who doubt possible the things they weren’t able to do or are afraid to do. It isn’t my responsibility to change their minds. I’m only interested in inspiring the ones who want to try.

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  3. Deanna

    “I am a 40-year-old single childless frugal spinster badass with a penchant for cheap travel and tiny house living.” You are my hero. That may be one of the best sentences I’ve read lately.

    A BIG congratulations on what you’ve achieved.

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  4. Lynx

    Congratulations. I read that piece a few days ago (minus the comments) and was like fantastic. Nice to hear you have developed a thicker skin. In my opinion, the internet comments are usually about the person writing the comment and not the actual merit of the story. If you ever fly the SJU route let me know I love the thought of doing meetups.

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    1. Thank you!! The comments are all a part of the equation. I suppose if the idea of FIRE gets introduced to even a small percentage then we’ve all done our job to promote a different (let’s face it, better 😉) lifestyle.

      I will absolutely let you know if I make it to SJU. How are things going down there? Last I visited the hotel strips were up and running but inner island damage was still intense with many people still living without electric and water. How are those resources now?

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      1. Lynx

        Definitely better lifestyle. It is amazing how much easier everything is when you don’t need to worry about money.
        Things are getting better. Still on island time but big difference in comparison to last year. The power situation outside the major areas are still sketchy but that also has to do with the power company was in a sad state even before the hurricane. They are sourcing bids to rebuild so hopefully it will be better soon.

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  5. Sheilaraye

    Good for you! I am also a FI retired flight attendant from the same airline. You’re smart to hang in there for those lifetime flight benefits. My hubs and I use that benefit A LOT! It’s fun to be focused, frugal and free! We didn’t do that as young as you, so “good on you” as our Scottish relatives say.
    When I retired (2015), the company let us trade our sick bank to purchase health insurance post-retirement and pre-Medicare. I saved my sick pay for 10+ years to utilize this benefit. May or may not still be an option or worth it to you.
    I’m happy for you! You go girl!

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    1. Thank you!! It’s always great to hear of another flygirl making it all the way to retirement. It’s a tough gig but if you can hang in there long enough, it is sooooo worth it!!

      I believe my company also allows us to purchase pre Medicare insurance. I haven’t looked into it quite yet but I have started to bank my sick time. Of course, I have to work to earn sick time so I don’t think I’ll have as much as I would need to even be close to bridge the gap. Either way, a little is better than nothing. 👍🏼

      Thanks for taking the time to comment and HAPPY RETIREMENT to you and your hubby!!

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  6. well done. the commentary on that market watch article is sadly hilarious. what a bunch of bozos are on the internet. i think it all started with being able to point and click. bring back DOS where you needed more than 14 brain cells to use a computer.

    i guess we’re in a similar spot. we have this pile of assets and a house with no liabilities but are just staying the course with a couple of pretty easy jobs. my work has good air conditioning and a work gym right across the street. i even found i do less on the weekends right now so until we figure out what we might do with 24×7=168 hours free every week we’ll keep working too. i think i’m gonna fly MSY to ALB labor day weekend. i always use your airline as they’re the only one who hires genuinely nice people.

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    1. It’s hilarious indeed!! I feel like I have grown a lot in the past year or so since the Money article came out. I wasn’t prepared for the idiocy of public comments. It hurt and made me not want to put my self out there or write anymore. This go around I barely feel it. And maybe because of the pure stupidity – how does one comment on the false hourly wage of another with such certainty?? Of all things, why on Earth would I make that up?!! I read a few things and want to object but decided not to…I did throw a few asterisks their way though. 😉

      I think it is good to keep some kind of work going if you haven’t figured out what else you want to do. Having the choice to do so it the best part of FI.

      I am not sure if I will be flying that route that week but I am sure at some point our paths will cross! Make sure to keep an eye out for me. 🙂

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      1. Brian

        I read the Marketwatch comments. Seems like many didn’t read the article or listen to the video before posting. I think the 4% rule has merit for most normal circumstances and over a long enough period for market extremes to balance out. I’m curious have you had a financial advisor do a Monte Carlo simulation of your assets and retirement plans?

        A female 40yo has a life expectancy of 82.5 years. That means you’ll need to live on the income from your assets for quite sometime. (22 to 28 years before you get Social Security) In reading some of your entries I don’t see a lot related to taxes however, including the required minimum distributions at age 70 and the tax increase that comes with it. In my own financial planning I have a spreadsheet that separates my post tax assets from my pre-tax assets and includes the appreciation of those assets separately as well as the draw down separately. The post tax dollars will be liquidated first as we don’t want to touch the tax-deferred stuff until the RMD requires us to. And then I also factor in the jump in taxes when we do tap into the tax deferred stuff. But it’s critical for us to know how quickly the post tax assets can hold out.

        Also the factors I use to determine the appreciation of the post tax and deferred assets are also different. The post tax assets I assume have a lower ROI because I need them to be more liquid. The deferred assets can seek a higher ROI because they don’t need that level of liquidity.

        In any event I am enjoying your blog and it’s making me examine aspects of my own retirement planning. My wife and I are FI and like you are addicted to travel and have budgeted a great deal of future expense for that purpose.

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  7. I had to learn (the hard way) this week that Zillow’s Zestimate is waayyyy off! Working on refinancing my mortgage, and the appraisal came back at $103k vs the $125k that Zillow was showing. $22k is a big difference when we’re talking low-low-low-six-figures! Like 21.36% off the mark!
    Congrats on reaching FI, having all sorts of fun along the way, and on much continued success that I am certain is on the way for you! And I’m super happy you’ve been blogging a bit more regularly lately 😁 Can’t wait to hang out with you next month!

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    1. Right?! I truly feel bad for the people who go on there and think that is what their home is worth. It is really hard to reframe your expectations when you have to come down 20% right off the bat! Sorry you learned the hard way. 🙂

      Thanks for the encouragement. The caboose is a very friendly and serene writing environment so maybe that is what is helping my creative brain these days. Either way, it feels good to be back!! See you next month!!

      Like

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