When you plan to become Financially independent, you need a plan. Our plan is simple: life below our means and invest the rest. These monthly Amber index posts provide a follow up of the plan. I check if we are on track for FIRE in 2029.
From the graph above, it surly looks we are on track. Both YTD savings rates are above their target. The past 2 months, we were below target. This is a similar pattern from last year. Next to our monthly automated saving, we depend a lot on uneven distributed events like tax refunds and bonuses. The timing of these is unpredictable. This are the items that will create the occasional peak like they did in January. More to come later this year.
Does this means we have no fun? We have tons of fun. Not all fun costs money. And we both have fun money we can use on discretionary spending. Just like we did lately. We took the kids to the K3 shows (worldfamous in Flandres an Holland, a lot less outside this area). After the show, there was priceless fun on the beach with first toe dip. We have brave kids, the outside temperature was ony 11°Celcius. I kept my feet dry.
This index tracks the overall progress towards the 2029 FIRE goal. What do you see?
Progress is not looking good. We are approx 1pct below target. So what? Well as the 4pct SWR is the basis behind the index, 1 pct represents about 3 months of expenses ( that is 1 pct of 300 time your expenses). And that is quite a lot to me. Do we panic? not yet!
- We have reached the point where the markets decide if we go up or down. Our monthly investments are needed but do not decide on the final outcome. The contributions are still there (see the SR above) According to the plan, we need a decent market return. The past 4 months, we have not seen these returns. That explains one part.
- The goal line also assumes that the money inflow is evenly. We know this is not the case. We still expect some extra cash to invest later this year. This should give a boost.
- Some holdings we have only provide a yearly update of their value. I am too lazy to calculate pro rata what they would be worth now.
All in all, we do not need to worry now. There will always be blips in the graph. This is just a blip en cours du route.. It is the overall trend that matters most. The trend is positive, so am I!
How is your progress?