Beat the FIRE Joneses!

The FIRE community is great source for both technical investment advice and life improvement. Plenty of excellent sources out there. It is also a community where people FI early: mid thirties, early forties…. Where people share a lot of damn good numbers. Could it be that we now want to keep up with a new set of Joneses? Albeit, somehow a good version of them? The kind of Joneses that you beat and life will be good?

Being part of this, means you want to compare with the others in the community. There are (too) many metrics you can use for that. The savings rate is one of these. Your actual FIRE date being another, not to forget the age at which you will be FIRE. Being and option trader, my monthly option income is yet another metric.

Let’s look at some metrics

Savings rate

Our savings rate this year will be down from last year. Last year we had a whopping 56Pct (including mortgage payment). That is not bad! Actually, it puts is quite high on the Blogger Savings Rate Index. And compared to the average Belgian Family, we must be sky high. Even with the lower income this year and the fact that we decided to invest less and spend more on travel.

And yet, there are people out there that do better, that save 60pct, 70 pct of their income. Where do we go wrong? Do we need to side hustle more? Do we need to cut more expenses? No more cable, a shabby car, downsize to a cheaper area?

FIRE Age

We plan be FI by the age of 53. What, that is not early!!  Look at the community.  A lot of people stop sooner. In extreme cases, you can read stories at age 32, or older at age 34 or really old, at age 37! They retire 18 years before us! Looks like we are some loosers.

53, that is actually not that far form the current Belgian average. In 2014, the Belgian average for a man was 59,6. So, I gain about 7 years. That is already a better perspective! still, not early

Option income

This year, my first trading year, I expect to end around 2,5K in option premium income. Not bad. Comparing to others, It is nice, not outrageous. There is more, there is less.

What is there to learn?

• In life, there wil always be people that have more than you. More money, more cars, a higher savings rate. There will be always people that be FI sooner. Trying to be nr 1 might not be the best approach in life. Changes to succeed are low… That does not mean you should not try. Just have the perspective on your probabilities. Try to come up with achievable goals and wins that matter to you, given your situation.

 

• When looking at numbers, the only thing you see are numbers. There is no background, no idea on starting point, sacrifices made to reach a goal. People that retire sooner might have worked double your hours in a more stress full and demanding job. They might live on half your budget.

 

• Take things in perspective. The 2,5K option income is in fact enormous. It is money I would otherwise not have. At the current interest rate (let’s be optimistic: a  1pct on an internet saving account), this represents 250K that would be parked there or 82,5K worth of a dividend stocks, assuming a 3 PCT net yield (Living in Belgium, with a 30pct tax rate and some foreign tax, that is easily 5 pct gross dividend… where can I find that?)

How to move forward?

Focusing on your own plan and your own life is the solution. What is it that makes you happy. That should be the driver in life. That is personal for each and every one and for each couple. As a family of 4, we need to find out that target. We realise also that it is a moving target. We get new insights, gain new experiences,we have live events that push us in another direction.

I have to admit, it is not easy to find out what we want, what our target is. It has changed quite a lot and there are conflicting items. Finding the balance is hard. I am sure a lot of others, even reference points we have, struggle with the same doubts.

Also, the focus on a goal might not be the best thing. You reach your goal. What is next? Go after a new goal…? We came to realise that we prefer to have an intentional way of living that makes us feel good.