I’ve got to break free….
I want to break free, yeah….
I want, I want, I want, I want to break free. (Queen)
Don’t we all want to be free?
One way to be free is to embark on the journey to Financial Independence and while on the journey, you have all the time to define what it means for you. Once in a while, it is best to stop and look on the map to see where you are.
So, where are we? We track our progress with the Amberindex. Once this is at 100pct, we have reached FI. This will be the first destination in this journey: be free.
We are ate 27, 4 pct of the target, and exactly on track with our plan to be FI by 2029. Great news just before the year end. Time for celebration!
A lot happened this year: volatile markets, great paper profit in gold and the far less profit in gold, a paycheck cut when changing to a job that increases satisfaction and happiness (the true goal in life?), deciding to spend more on travel, extra income via options… A lot of unplanned events, events that are not in 2029 plan… Be flexible…!
On of the key elements to this progress is the system we have in place wherby we have predifined and priority investment transfers! Highly recommended.
Mr RIP actually asked an interesting question in a comment: how can it be that FIRE is still so long away with a Savings Rate close to 50pct? Good question.
Let me try to answer:
- The SR of 50 pct includes our mortgage payments. The one that only shows money that goes to investments is closer to 30 pct. That makes a big difference. Using the mother of calculators, the difference between 30 pct and 50 pct is no less than 11 years when you would start from 0.
- The plan we have to retire in 2029 is based on a custom spreadsheet that has some inputs. One of these inputs are one off costs that I guesstimate to happen in the future. Think bathroom and kitchen renewals. I prefer to factor in these elements in the plan.
- The plan excludes the house equity and money for travel. These are not assets that we can sell little by little to pay the day-2-day bills. There are people that add the equity in the main house… We do not do that.
Those 3 elements combined are the main reason why we still have 13 years to go. It beats the official age of the Belgian state by 14 years…
amber tree leaves 
Nice up-tick in the Amber Index. Glad to see it is following along with the target line, despite the drop in income from the new job. Good for you!
As to your final bullets; this is also why, in order to make FI less affected by large housing related expenses, we will likely be moving to a rental place once we reach FI. All our real estate, including our current house, will be rented out.
We are really focusing on making cash-flow requirements as consistent and predictable as possible during FI. The alternative is an additional slash fund/larger net worth, which means we would have to continue to work longer.
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Nice update ATL, you’re right on track 🙂
You’ve made great progress in your lifestyle, which is your life right now, so you should be happy with that! I think it’s reasonable to include your house payments in the savings rate, as long as that’s how you want to calculate if you’re getting closer to FI.
Sounds awesome to retire 13 years early!!
Tristan
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Beating the average retirement age by 14 years is awesome!!! 13 years definitely sounds doable and you’ve done an excellent job so far. Keep up the awesome job!!!
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Hi ATL, thanks for your explanations 🙂
My opinion is that your house should be in your NW. Ok, you can’t sell it piece by piece to pay daily bills, but it’s not a problem. It’s still an asset. You can sell it (when your cash is lower than 1 year of expenses for example) and get its value in cash. you can downsize to a smaller home and generate cash from the difference. You can rent it and generate cash. It’s an asset and it deserves to be in your NW 🙂
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Agreed it is An Asset. The Amberindex tracks how far I am in reaching enough investable assets to be FI. For now, I keep my main house outside of this.
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Hi ATL,
Just came from the mustachian post to check out your 50%+ savings rate to find you’re including mortgage payments in that! I feel cheated as have entered only 34% but didn’t include mortgage payments!
Haha only joking of course 😉
Just out of interest tho do you include the whole payment, interest plus principle? Or only the principle part?
Cheers and good luck in 2017 mate
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Haha…
I include principal and interest out of simplicity. In our case, interest is less than 10 pct of the monthly payment.
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Wow! That is a good mortgage!
I think ours is currently about 50/50 interest to principal and we’re not on a high rate by any means.
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Our rate is close to one and we are in the last 8 years of payment… It used to be different.
Personally I track SR without mortgage and publish both. Mustachian post picked the higher one… 😎
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Haha I might do the same for next year then 😉
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You will get a nice upgrade in badge then!
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