So every now and then all my ruminating actually works itself into a solution. So we know by now that I sometimes follow the wrong road to the end just to avoid having to make another decision. I am a set-it-and-forget-it extremist.
I spent the better part of the afternoon just calculating and recalculating FIRE numbers. Just trying to figure out if I can squeeze any more days out of my FIRE timeline. I study A Purple Life's trajectory again and again to see what I can do to replicate her success.
I couldn't figure out how she so confidently believed she could retire in 2 years after reaching $300k. One of her posts led me to Mr. 1500's blog. And he essentially doubled his net worth from $500k to nearly a million in 4 years. The thing I learned today is they both did projections based on 8-10% return. I've been using the standard 6%. I still don't know how Purple is able to calculate the exact day, but that's a problem for another day.
Anyway, after clicking around and around, it finally occurred to me that..uhh.. COVID is really happening. Your budget is based on normal life and occurrences. Granted I still did spend $30k last year even though it was COVID, but I also bought a house and sent $5k overseas.
One of the things Purple wasn't afraid to do was 1) declare her goals publicly. I'm way too unlucky to make my wishes public. The Devil has a strong foothold in my life so I know he will pounce on every dream as he has my whole life. But 2) she's not afraid to account for the best case scenario. She was always just so confident that her numbers would work and that she would get a raise or a bonus. So each time her income increased, she adjusted her numbers.
I still don't account for that in any of my projections.
I would be afraid to do that because I would be convinced it wouldn't last or happen and if it did, it would get snatched away from me. Case in point - last employer stopped matching 401k contributions part way through the year- good thing I never accounted for that match.
But to get myself over this latest anxious hump, I dared to dream what it would look like if everything went to plan. AND I'm actually factoring in COVID. Basically, I'm trying to figure out the best case scenario of investing every extra dollar. My student loans are officially postponed until Sept. That's an extra $400/ mon.
Here's a snapshot of the 2021 Budget Projections I posted earlier:
I totally had no plans to do anything with that extra $400 I won't have to spend. At first I took it a little to the left and thought...hmmm can I even adjust my Everyday Expenses to $200 just for food. But I know from past experience, when I get too tight on the budget bad things happen. So that will stay as is. But I do love a good background money challenge.
Housing: $700/mon = $8400
Everyday Expenses: $400/mon = $4800
Known one time expenses: ~$2,000/yr (car insurance, HOA fees, professional license, etc.)
Total Known for the year: $15,200, I'm just going to round to $15k!
That's half of the $30k I anticipated for the year!!
That's $15k closer to my FIRE goal this year!
My original savings goal was $50k/yr now I can add $15k = $65k/yr!
This is from studying her articles. I just never thought to go back and account for saved savings and make my goals even more aggressive. I think part of me is scared of my progress. I don't like looking at it too long because I have mixed feelings. In fact let's stop thinking about it and move on to the action plan.
So new spending target: $15k for the year!
New Savings Target: $65k/year
Action Item
- Well first adjust how much I was sending monthly to my checking account for recurring bills.
- Next I think I'm going to start auto-investing that extra $500/mon in the next day or two.
I was thinking of increasing my spillover election by $500 directly from my paycheck, but you know I'm too fearful to do that. Just in case something bad happens I'd rather have the extra money have a layover in my savings account before it gets invested. So I'll just add the extra deposit to my individual brokerage account instead.
I am going to be a bit miserly this year, though. I will just use gift cards and service for tithing. I do still want to send money overseas, but we'll see. Might just try to squeeze out $1200 in bank bonuses for that.
But that extra $15k really should mean I'm investing $1250 extra/mon... but I'm not ready! Maybe I'll sweep the extras at my quarterly check-in, but for now I think I'll just stick to adding an extra $500 to auto-invest. March will be here soon enough anyway.
So this extra bit of hope actually helped me feel better about my job. Using Purple's success for a brief daydream. I thought how would my life look different if I could FIRE in 2 years?
- Would I stay at my current company? Yes
- Would I actively pursue internal roles? The jury's still out, maybe not with such angst, but I think if I stumbled upon a role that seemed like a really good fit rather than a way out, then I'm leaning closer to Yes. But active to me was doing things to stand out, making intentional connections, checking in regularly with people that might help me. So maybe more casually. I don't think I'll ever really be able to stop wanting to see how much I can earn and how much I can learn.
- What to do between now and Bonus Day - churn or coast? I choose Churn. I just want to have this little window of really giving 210% just to see if my boss rewards me for it.
- Find other opportunities to make money throughout the year? Yes! Every few months or so I get an email from a recruiter (from back when I was desperately job seeking), and it occurred to me, I wonder if I could get away with having two remote jobs??? There's an email in my inbox I'm contemplating calling back just to see. But otherwise, maybe churning more bank bonuses. I've already gotten $800 paid out this year so far. These are all churns that started in 2020 though. I was kind of falling out of the habit.
- Move? Well, if the hypothesis is that COVID quarantine is at least until Dec 2021, then I would really only need to "commute" for 2022, so the answer is Yes. I would commute 4 states away for the short-term.
- How to approach work after Bonus Day? Coast and be likeable! The being likeable is both for maximum enjoyment on my part and a back-up plan if things don't go to plan (which for a girl like me is equally likely).
- What if you never make the big, positive, sustainable impact you hoped for? If I can keep a good attitude about pursuing FIRE so aggressively this year without getting discouraged, that will have to be enough.
- Do I still ask about getting reimbursed for taking the promotional review class? Yes! I mean as much as I want to fully commit to this new FIRE plan, I know unfortunate things happen to me all the time. So I can't fully relax until I reach my FIRE number.
To summarize:
- New Spending Target: $15k/yr
- New Savings Target: $65k/yr
- To do: Start auto-investing an additional $500/mon beginning now.
Other: new attitude and approach to work (after Bonus day and a bit before is okay, I guess) - it's like the difference between broke and being frugal. Room to fail and a soft place to land!
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