A technology consultant living in Washington, DC and FI/RE-ing in 8 years with $760k

Occupation: Technology Consultant

Industry: Financial Services

Location: Washington, DC

Age: 27

Salary: 95K/year with bonus averaging around 1.2K

Ethnicity: White

Education: Masters

Current financial situation: Single, living with two roommates

What was your first job? Why did you get it? How much did you get paid?

Babysitting, I was getting paid $16/hr and loved working with kids

Growing up how did you learn about personal finance? Was money talked about openly? How did it make you feel?

One reason I've been motived to reach FI is that my parents really didn't teach me much about personal finance. I once asked my dad how to make a budget, and he told me he didn't know because they never had one. I personally don't feel my parents make the best choices with their money (or at least, they do not make the choices I would).

What was the moment or event that made you realize you needed to start getting your money together?

Probably at some point later in high school; I knew by then that I did not want to worry about money as often as my parents did (or keeping up with appearances), so I chose to get a business degree rather than to pursue and English or art degree in order to obtain a more stable, secure income post-college.

Let’s Talk Money

Current Net Worth: $238,175

HSA: $4,275

Investments: $89,400

Vested 401k: $78,000 (about $5,000 unvested in 401k)

Pension: $6,700

High Yield Savings: $20,000

Checking: $700

Roth IRA: $39,100

Debt: No debt, but ~$5,000 of my 401k is unvested, so if I leave my job before the vesting date, I will have to give that amount back. The ~$5,000 includes contributions and earnings from my 401k match.

Expenses:

Rent: $952

Internet & Phone: $0 (covered by my employer)

Electric: ~$40

Water & Trash: $120 every 3 months

Spotify: $9.99

Libro.FM: $14.99

Club Membership: $12

Donations: $52

Computer & Phone Security Software: $39.99/year

Savings Rate: 59% after tax

Investing strategy: Max out all tax-efficient accounts (HSA, IRA, 401k) and invest the rest in my brokerage account up to 55%. Last year I saved/invested more than normal because I wasn't traveling, but this year I decided to begin a sinking fund where I will put 5% of my paycheck each month to save for large purchases/luxury items (future trips, spa visits, art classes, etc.).

Your FI/RE Story

FI/RE number: FI : $762,000 ; Fat FI $1,070,000

FI/RE type: My Fat FI number is less than $100,000/yr, but I really only spend about $25,000 of my pay check per year and do not feel limited in anyway, so I felt that $40,000/year was a realistic FAT FI number for me. I'm also planning to eventually move to a lower COL area once I retire (DC is considered VHCOL).

Years until FI/RE: ~8.4, but I may work a little longer to reach my FAT FI number

FI/RE location: Ideally Richmond or Charlottesville, but I'm open to other areas. I've considered the Great Lakes region due to global warming, as I believe that area will be best prepared, and current COL expenses there are so cheap compared to the rest of the country.

How did you first hear about FI/RE?

My ex-boyfriend, he sucked and gave terrible FI/RE advice, but at least I gained knowledge of this movement from that relationship and was able to do my own research to make better choices

Why do you want to reach Financial Independence/Retire Early? What keeps you motivated on this long journey?

I have a few friends who are significantly older than I am, and they've all had a story about a friend who lost his/her/their job after age 40 and was unable to find a new one. To me, achieving FI would provide security, should this situation ever happen to me, or should I face unexpected retirement. Additionally, I like the idea of FI/RE because I believe it will give me more time to pursue my many hobbies (reading, hiking, volunteering), most of which are difficult to fit in during the week while I have a full time job.

In what ways have you cut back your spending? In what ways have you started mindfully spending more?

I was already naturally frugal before finding out about FI/RE, but I definitely contribute a larger % of my income to my retirement accounts than before. Additionally, I think I'm a pretty mindful spender by nature, but typically I don't buy anything unless my mind keeps going back to it. For example, if I go into a store and look at their clothes, I will never buy an item the first time I see it. Instead, I'll typically leave and wait to see if I develop a craving for that item, where I find myself thinking about the item a lot. Then I'll come back for it. I do the same thing with restaurant food; if I find I'm still craving pasta or a burrito after a few days, I'll go ahead and treat myself.

What do friends and family have to say when you tell them your plan to achieve FI/RE? Are they supportive?

FI/RE isn't something I talk about with a lot of people. I try not to talk about money with my friends, as most work as artists, researchers, or academics, but there's definitely an unspoken understanding that I am making more than they are. No one seems bitter about this though.

My parents think my goals are admirable but unrealistic if I plan to have a house or children some day (I have already decided that I don't want either if I have to compromise the security of FI, but my parents think I will change my mind).

Are you doing anything to achieve FI/RE faster?

I definitely do not need to live with roommates and could afford my own place if I wanted, but one-bedroom apartments in this area cost an average of $2,200/month (at the low end, they are still $1,700/month). By living with roommates, I am able to put $1,000/month towards savings and investments. Additionally, I take advantage of all the benefits my company offers.

What does retiring early (or financial independence) mean to you? What will you do once you FI/RE?

Write a book, go on long multi-day hikes, volunteer, get a dog, cook more, workout more, relax.

FI/RE Advice

Any advice you'd give to someone who wants to pursue FI/RE, especially if it seemed hard or unattainable?

Really think about what you actually need to be happy. Realize that material things, like hardwoods floors and marble countertops, or that pair of $100 sunglasses you bought for yourself in the moment may spark joy initially, but won't in the long term. Think about what provides you happiness again and again.

What is the biggest thing you learned about money on this journey?

It's important to be thoughtful and purposeful with your money.

Have you made any money mistakes or learned any lessons on the way that you wish you knew before?

Not maxing out my 401K each year, and believing there was such a thing as putting too much money in your 401K.

What are your favorite FI/RE resources that you'd recommend to someone just getting started?

Quit Like a Millionaire is a great book! The author really simplifies the process, and does so in a funny way.

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Disclosure: Some links are affiliate links, meaning, at no additional cost to you, I may earn some compensation. All opinions are 100% my own! I truly appreciate you and your support. :)

A 31 year-old (former) small business marketer living in Florida and currently on FI/RE

Occupation: I graduated with my BS in journalism back in 2012, but I quickly pivoted to marketing shortly thereafter. Because I worked mostly for small businesses throughout my career, I had to wear a lot of hats — designer, photographer, social media manager, communications specialist, networker, etc.

Industry: Marketing

Location: Florida

Age: 31

Salary: I'm currently retired, although I do a few freelance projects I enjoy. My peak salary was probably close to $80,000 though.

Ethnicity: White

Education: Bachelors

Current financial situation: I worked toward FIRE with my husband. I left full-time work at the end of 2019, and he stepped away from full-time work at the end of 2020.

What was your first job? Why did you get it? How much did you get paid?

My first job in high school was at Sears Portrait Studio. I think I started at $6.67 an hour, and I was able to increase that to $7.50 an hour before leaving there to become a waitress, which paid way more. I waited tables through college making over $20 an hour including tips and transitioned into freelance journalism halfway through my education. The hourly pay on that was lower, but I knew I needed to make $300 a week to pay my bills, and my boss helped make sure I had enough gigs to meet that requirement. My first full-time job out of college paid $18 an hour, and then I moved into a salaried position making about $37,000 per year soon after. These all kind of fit the bill as "first jobs" to me.

Growing up how did you learn about personal finance? Was money talked about openly? How did it make you feel?

My family did not hide the fact that money was tight. I knew going to college was going to be a solo venture. My original goal as a young adult was just to be financially solvent enough that I didn't have to worry about the price of a new tube of lipstick at the drugstore.

What was the moment or event that made you realize you needed to start getting your money together?

There was no one specific moment. I've always been frugal, which probably has a lot to do with my upbringing. I would say once I had more income at my first full-time job, and my then-boyfriend (now husband) started working full-time too, we had a surplus we felt we needed to put to use. So we learned as much as we could about personal finance, came across the idea of FIRE, and put most of our excess money into stock market index funds soon after.

Let’s Talk Money

Net Worth: My combined net worth with my husband is more than 25 times our annual expenses, but we haven't disclosed a number publicly yet.

Debt: I've never had debt of any kind, beyond credit cards which are paid in full monthly. My husband has also never had any debt.

Monthly Expenses: Health insurance, condo association dues, food, transportation, and utilities are our biggest bills. Everything else combined is pretty insignificant in comparison. We don't pay for any kind of television or streaming services, and most of our entertainment comes from free outdoor activities and hanging out with friends.

Savings Rate: When working full-time, our savings rate floated between 60-85%.

Investing strategy: Total stock and bond market index funds have always been our go-to investments, but we do own a single rental unit now (it's the condo we used to live in ourselves).

Your FI/RE Story

FI/RE number: We could do a lean FIRE on less than $500k invested, or a fatter FIRE on more like $750-800k. Truthfully, we don't pay much attention to these numbers any more because we still have a tiny amount of freelance work that pays more than all of our bills.

FI/RE type: We already made it to FIRE, but we still do a few hours a week of freelance work that we enjoy, which in turn allows us to cashflow our life without drawing down our portfolio at all.

Years until FI/RE: We're FI now, but we have a few freelance gigs we've continued to spend a few hours on each week because we like them. Plus, that little freelance work actually covers more than all of our expenses, allowing us to let our investments continue to grow untouched.

FI/RE location: My husband and I were both born and raised in Florida (we're high school sweethearts), and we currently own two condos in the state (one in our college town and one on the beach).

How did you first hear about FI/RE?

When first learning about investing, the 4% rule made sense, but it wasn't until I saw a news article about Mr. Money Mustache that everything really clicked. He was a few years ahead of us, and he made a lot more money than we did at the time. But his story kinda proved the concept for us. I sent my husband that news article from my work email with something like, "This sounds like what we've been talking about." The rest is history.

Why do you want to reach Financial Independence/Retire Early? What keeps you motivated on this long journey?

As I said, my first financial goal was not having to worry about small "just because" purchases, like a new lipstick. Growing up, those kinds of things were a big deal. But I didn't realize just how low that bar was, honestly. Learning about investing and compound interest gave saving money more meaning, and it changed my outlook on personal finance. We started tracking our net worth almost immediately after discovering FIRE, and seeing that number increase each month was motivation enough. I went from wanting the freedom from worrying about money to wanting to be free to do whatever I wanted in life. That was powerful.

In what ways have you cut back your spending? In what ways have you started mindfully spending more?

I've always been frugal, and it has a lot to do with growing up on less. It hasn't been difficult for me to keep our expenses low, and that's where a lot of our saving power came from. More recently, we moved to the beach, which was an unnecessary but worthwhile additional expense.

What do friends and family have to say when you tell them your plan to achieve FI/RE? Are they supportive?

I don't think most people understood what we were doing or believed it would work during the 8 years we were working toward FIRE. That's not to say anyone was UNSUPPORTIVE, but it was just a totally new concept that was hard for others to fully grasp. I will say that the tone definitely shifted once we quit our jobs and start living each day for ourselves. It's led to a lot more honest money conversations and helping friends and family chase down their own goals more efficiently. That's also why we started our blog.

Are you doing anything to achieve FI/RE faster?

At one point, I think I was working three different gigs: my full-time job, waitressing on the weekends, and doing some freelance social media work. We also have run a photography business as a side hustle throughout college and even now, but most of our business is just word of mouth. Any time we were working full-time, we were also doing photography occasionally on the weekends and flipping random finds (like electronics or furniture) to increase our income and therefore what we were able to save that month.

What does retiring early (or financial independence) mean to you? What will you do once you FI/RE?

Reaching financial independence allows us to travel more (although not as much since COVID hit), and that was one thing we were really looking forward to. We started our blog during our last big road trip, visiting every National Park in the US during 2019, and we've been pouring a lot of time and love into that during the last year and a half. Our goal is to help educate younger folks, who have the most to gain from learning about FIRE so early, because we saw what a difference that made in our own lives. We did move to the beach last year so we could feel like we're somewhere exotic without traveling. Now, our daily walks are much more picaresque, and we have lots of fun, free, outdoor activities to enjoy.

FI/RE Advice

Any advice you'd give to someone who wants to pursue FI/RE, especially if it seemed hard or unattainable?

Recognize that the biggest wins are going to come from cuts to the biggest spending categories, things like housing and transportation, and less so from the occasional latte (which might be worth cutting, but it's less impactful). Also, realize that you can be really dedicated about cutting all excess spending for just a couple years to stack up cash super fast, and then let off the gas a little if you feel like you need to. The choices you make don't have to be permanent. Life is fluid.

What is the biggest thing you learned about money on this journey?

All money is money. The imaginary savings "buckets" -- for vacation money, fun money, gift-giving money, retirement money, etc. -- are just that, imaginary. That's what I like about tracking net worth, all assets minus all liabilities. Your net worth is a holistic view of ALL your money, and knowing that number is empowering. You may find that you're more financially solvent than you thought, which could help you leave a toxic workplace or launch a side hustle sooner.

Have you made any money mistakes or learned any lessons on the way that you wish you knew before?

The first step we took into investing was to visit a financial advisor at our local bank. He was super helpful and friendly, but he also sold us into an actively managed bond fund with a ridiculous load fee because it got him a big commission. We were like 22 and didn't know how terrible that advice was until we read about index funds. Big "d'oh" moment. That's not to say that every financial advisor is going to give you bad advice, but you should always do your own research too.

What are your favorite FI/RE resources that you'd recommend to someone just getting started?

JL Collins' The Simple Path to Wealth is an amazing book, and all the content is also on his site for free, which is great for beginners.

Shameless plug: Our Financial Roadmap is just six steps to FIRE, which can be done in as little as 10 years (we did it in 8), and focuses on finding ways to enjoy the journey. We actually include taking travel sabbaticals in our roadmap because going hard toward FIRE can often lead to burnout, and sabbaticals are a way to reset, clear your mind, and demonstrate what early retirement can look like for you. All of our resources are free.

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Disclosure: Some links are affiliate links, meaning, at no additional cost to you, I may earn some compensation. All opinions are 100% my own! I truly appreciate you and your support. :)

FI/RE Diaries: A speech language pathologist living in Los Angeles, CA and FI/RE-ing in 15 years with $1.5M

Occupation: I'm a Speech Language Pathologist working in special education. I also have a part time job doing speech therapy.

Industry: Education

Location: Los Angeles, CA

Salary: $107k/year

FI/RE Number: $1.5M

Years Until FI/RE: 15-20 depending on extra income/investments

Current financial situation: SINK, paying off mortgage

Ethnicity: Asian/Pacific Islander

How did you first hear about FI/RE?

Instagram!

Why do you want to reach Financial Independence/Retire Early?

When I was diagnosed with Rheumatoid Arthritis I was scared of "What ifs" if it progressed to affect my ability to work. While it's very well managed now, I want to know I'll be safe financially. Now my focus for FI is to be work optional to be able to have a flexible work schedule to spend more time with family and to travel or just do whatever I feel like doing!

What does FI/RE mean to you?

I think my life would be pretty similar but I would have less work, more sleep, and less stress. More time to live and enjoy the moment and again, more time with family and friends.

How much do you spend per month? Save per month?

Spend $3,700/month, Invest $2,125/month

What is your % savings rate?

My income fluctuates but approximately 20-25%

Are you doing anything to achieve FI/RE faster?

Working part time on top of my full time job

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Disclosure: Some links are affiliate links, meaning, at no additional cost to you, I may earn some compensation. All opinions are 100% my own! I truly appreciate you and your support. :)

FI/RE Diaries: A teacher living in South Texas and FI/RE-ing by 50 with $1M

Occupation: I am a teacher looking to pivot into a different career

Industry: Education

Location: South Texas

Salary: $50k/year

FI/RE Number: $1M (or less)

Years Until FI/RE: My goal is to reach this by the time I am 50

Current financial situation: SINK. I have about $11,000 in debt. This includes student loans as well. I used to pay minimum on my credit cards not realizing how much interest was adding up.

Ethnicity: Hispanic/Latinx

How did you first hear about FI/RE?

I first heard about FIRE through Yo Quiero Dinero Podcast

Why do you want to reach Financial Independence/Retire Early?

I want work to be optional and be able to travel any time of the year. I also want to help out my family financially.

What does FI/RE mean to you?

FI/RE means the option to work or not. I have had jobs the left me mentally and emotionally exhausted. Working until 65 for someone else is not a way to live. My life would change by having more freedom to live my most authentic life.

How much do you spend per month? Save per month?

I spend about $2,400 per month and save $400/month.

Are you doing anything to achieve FI/RE faster? If yes, what?

I’m cutting spending, budgeting, minimalism, learning new skills to increase my income either through side hustles or a new job.

Any advice you'd give to someone who has a similar FI/RE lifestyle as you, especially if it seemed hard or unattainable?

I would say to look for ways to increase income while minimizing how much you spend per month. Making a solid plan and making connections with others in this community also helps.

Favorite FI/RE resources you’d like to share?

Our Rich Journey

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Disclosure: Some links are affiliate links, meaning, at no additional cost to you, I may earn some compensation. All opinions are 100% my own! I truly appreciate you and your support. :)

How to Retire Early: Track your expenses, calculate your savings rate, and cut back spending

Spend on what you love and forget about the rest! Today we’re talking all about tracking your spending and understanding how you spend your money. 

If you haven't seen my post on what to do to start your journey to FIRE and really solidify what your dream retirement life looks, be sure to go check out my last post before diving into the numbers. Once you do that let's talk.

Track your spending

I started my journey to FIRE in December of 2019 after I read Mr. Money Mustache's blog. Prior to that I had no idea what my money was doing, how much I was making, and how much I was spending every single month. If you have an app like Mint or YNAB (You Need a Budget), then you probably already know the ballpark of what you make and what you spend every month. That is great, you can skip ahead and calculate your savings rate.

However if you're like me and you had no idea where to start I have a free downloadable template for you to start tracking your money and it's really, really simple. I bucket my money into income, savings, and expenses so you know what is coming in and what is going out. It’s important to track your spending for ~3 months to get an accurate look into how much money you're spending per month.

This will give you a more accurate number when calculating your savings rate. So if you don't know where to start, go make a copy of my free spreadsheet that I still use to this day to use to track my money. I don't look at it too frequently, I try and only go in to capture all of my expenses once a week. I’ll go back into my credit cards and look at all my different statements and capture what I did so I'm not obsessively checking my spreadsheet. 

Once the FIRE is lit underneath you it's really easy to get lost in the spreadsheets and become so absorbed with them. I will be honest, that was me in early 2020. I was obsessed. It's taken a while to stop that habit and is still work in progress to becoming more chill about it. I get it, it’s so exciting once you find FIRE, but I really try to only open my spreadsheet once a week and do a weekly money date with yourself.

Calculate your savings rate

Once you have your system of tracking your money set up, you can calculate your savings rate. Savings rate is your income minus your expenses divided by your income, i.e. your savings divided by your income.

Say for example my income is $7,000  and I am spending $2,000 between rent, utilities, all of my bills, and shopping. So that would be $7,000 - $2,000 = $5,000. So $5,000 of savings divided by $7,000 = 0.71. Then multiply that times 100 to turn that into a percent.  So you would be at a 71% savings rate. 

Then using this graph by Mr. Money Mustache, you will be able to estimate when you are able to retire. Based on the simple math above with a 70% savings rate, I would be able to retire in approximately 8.5 years, which is amazing! 

The math is as Mr. Money Mustache says, “shockingly simple,” and I agree it is shockingly simple, but there are a bit more nuances and things that are subject to change. I will get into that later. It's just exciting to know about how long it may take you to retire early.

Cut back spending

Now that you know your average savings rate, it’s time to evaluate spending. I go through an exercise of value-based spending. Since you’ve tracked your money for at least 3 months, you’re now able to see categories that are really high in spending and where you can cut back on.

It is important to go through a value-based spending exercise to see where you can cut back and this is the exciting part to see where you can save even more money to ultimately lower your costs and expenses for good and reach early retirement even faster. 

As an example, I love coffee. I love a good latte. I'm really on a Starbucks honey oat milk latte kick right now. However I really do not get coffee just to get coffee. I have my Oatly oat milk at home and I have my Trader Joe's instant cold brew powder that I really love. Honestly, for an everyday thing, it makes a delicious drink. I never mindlessly go get a fancy overpriced latte. 

For me it's when my friends want to meet up and grab a drink, then I will of course go get coffee with them. I'm sharing time with them and it's less about the latte, it's more about the experience of being with another person. Or if I'm going on a long walk by  myself, my Starbucks is half a mile away, then I can go sit in the park and journal. That is a very intentional act of going to go get a Starbucks latte.

Although I do also have my video on how to stop shopping which was really helpful for me to actually before I even began my FIRE journey reevaluate all of my spending but I'm not saying you have to scrimp. You don't have to live like you're back in college eating Top Ramen, I mean unless you enjoy that, which TBH I do. When I say to evaluate your spending, I really don't mean to cut back on everything.

Spend on what you love.

You can take yourself out to sushi to celebrate your wins, if that all aligns with your core values. I'm all about celebrating wins and not depriving myself of that. Life is meant to be lived. It is a whole journey and you want to look back at your life and have enjoyed that time. Becoming financially independent won’t suddenly change your happiness. You need to learn to be happy and find happiness on the journey. 

Figuring out what you love spending on will ultimately help you increase your savings rate and even retire early. If you cut out the things that you don't love and spend on things you do, it will bring down the price you need to become financially independent.

Start tracking your monthly spending, if you’re not already, and figure out your expenses. Keep track of all of your money—know where it’s going and what it's doing. Then calculate your savings rate. Get excited about finding out when you can retire early! 

If you’re also on your journey to financial freedom, go figure out your average savings rate and leave it in the comments below! And keep spreading the FIRE so we get other people turned onto the idea of early retirement.

Subscribe to my Youtube channel by clicking the button below and hit the notification bell to get notified when my next video drops. 

Let's retire early together!

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Disclosure: Some links are affiliate links, meaning, at no additional cost to you, I may earn some compensation. All opinions are 100% my own! I truly appreciate you and your support. :)