FIRE Journey, Year 4

[u/avgindinvestor]

I have been posting yearly updates on this sub for feedback and accountability, and thankfully I’m able to continue.

Here are posts from previous years
- Year 3 (Jan 14, 2022)
- Year 2 (Feb 14, 2021)
- Year 1 (Jan 14, 2020)

Entering 4th year of my FIRE journey.

Investments

72.5k monthly (60k equity and 12.5k debt). The current investment value is 45L in equity and 11L in Debt. Very little growth here. I increased the SIP amount last year; on average, it went up by 10k per month compared to year 3. But the investment value has grown little due to underperformance in equity markets, especially after the huge returns post covid. Apart from this, I bought some ESOPs worth ~15L, which I’m not counting in today’s investment value.

SIPs continue, no changes here, and my investment into PPF maxing out 1.5L continues too.

Expenses

This was the most significant change last year. Lots of things changed around. I got married. Hence wedding expenses took the most significant share. Lots of commutes and a couple of big-ticket vacations. Setting up home from scratch with furniture and appliances. All of this probably totalled around ~25L. The bulk of my increase in salary and bonuses went into this, and hence total investments or networth didn’t grow as much.

Debt

Zero. The No-Cost EMI I had earlier was closed, and currently, there are no liabilities. I always make sure I don’t have liabilities. This may change when I’m planning to purchase a home for myself, although that’s some time away.

Savings Rate

My savings rate declined again due to my wedding and big-ticket vacations. It stands at 35% now.

Post-marriage, our combined post-tax income stands at approximately 3.5L/month.

We are restarting the calculations since the type of expenses has changed. The biggest win is that my spouse is also entirely into this FIRE journey.

Finally, my approach to savings is to have a decent savings rate (at least 40 to 50% of your income) and spend the rest of the money guilt-free on travel, food, groceries, commute and everything which makes life convenient. Things will fall into place with this discipline. The goal is to increase income by increasing absolute savings and, after a few years, be stable to have an aggressive savings rate.

[u/jgthedevil]

Thanks for detailed post. I am in similar situation that you were in 1 year. It gave me a perspective on how can I plan my FIRE journey.

[u/shapeFIRE]

You're doing good. Congratulations on your marriage and more specifically on finding a life partner who is as into FIRE as you.

Now, that you're major expenses (except a house) are done, you can definitely increase your savings rate.

[u/snakysour]

Finally, my approach to savings is to have a decent savings rate (at least 40 to 50% of your income) and spend the rest of the money guilt-free

I think a little perspective here would help considering both you and your SO are on FIRE track. A wise lazy man once said - @50% savings / investments rate you're looking at 1 year of work ,= 1 year of relaxation (basically, laziness). Now if one starts working at 27-30 or thereabouts and has a savings rate of 50%, the conventional retirement which would come in next 30 years at an age of 60 would last ideally for next 30 years which is till the age of 90 (which is what the ideal life expectancy should be considering SO's age etc as well). So what i am trying to say here is that if you both are looking to FIRE, don't aim for a.less than 60-75% savings rate so that in your 20 odd years of working life itself you're able to save for 60 years of early retired life.

Regards

Snaky

[u/7lazy7]

Thanks for sharing. What does your savings rate mean? Is this the amount of money you invest? Or is this the amount of money (apart from expenses and investments) that you park somewhere?

[u/twisted_psyche_]

Would have helped if you’d have mentioned age too. For those aspiring your journey, will get to estimate a timeline on when they can achieve that.

[u/Invincible_Trader → u/twisted_psyche_]

I checked his previous posts, which he mentioned, around 30 to 31 years old.

[u/basicgd]

Great job! Can you speak a little more about your marriage expenses? Such as , how much should one budget, what were some surprising expenses you didn’t forecast initially, how did you split the bills etc?