Friday, February 11, 2011

Turning 30

Tomorrow is my thirtieth birthday.

Somehow, amazingly, I think I'm still on track. Well, not for 35, at least not without some significant lifestyle changes. But for being able to mostly retire sometime in the next decade.

Last year DH and I spent about $24,000. That makes our target for financial independence, using a quick-and-dirty calculation of annual expenses times twenty five, $600,000.

Right now, our net worth is about $150,000. In a few weeks, I should be getting another $30,000, the first "withdrawal" from my trust fund. So we're a little more than 25% of the way there.

Tonight, it feels very possible. 25% is a real number. I have a $2000 check for freelancing that came yesterday. If I liquidate my (excess) life insurance policy, that's a couple thousand more. If I sell my silver, another thousand or thousand and a half. (Both of those are things I've been wanting to do for over a year--geez, I need to get moving on those.)

I haven't made any progress on Being More Frugal in a long time--at some point a year or two ago I pretty much stopped buying books and clothes, but we're still spending the same on groceries and (more than I'd like) on eating out. And I wish our apartment was cheaper. And I wish I was hard-core enough to keep the heat down and the A/C off. But in spite of this, the money is starting to add up. And I could keep doing what I'm doing financially indefinitely--well, eventually I'll have to buy more clothes, but it takes those buggers forever to actually wear out.

I have everything--more--than I need materially: an excess of food, reading material, an Internet connection, transportation, warmth and shelter.

And by being content with that and having some fairly good luck, I guess I'm slowly getting rich.


laura said...

Hi Rachel and Happy Birthday for tomorrow!

It sounds like you're doing really well and have found a level that you're comfortable with, at the same time as being on track for your early retirement goals.

My hubby is 32 this year and we hope to have reached our target when he is 41. A lot depends on how our move affects us, but like you we're happy with our lifestyle as it is now so I can't see that changing.

Working Rachel said...

Hi, Laura,

Thanks! Good luck with your early retirement goals. It's hard to predict what's going to happen in the future but as long as we keep going I figure we'll get there eventually.

- Rachel

Anonymous said...

Hi Rachel,

Not to discourage you, but 600k simply will not be enough. Shoot for 800K to 1M in 10 years, and even then you may have to work part time.

4-5% is the safe withdrawal rate and that's based on market returns which have been much better than we are getting now.

If 24K gets you by now it will be 30K in 10 years with inflation...

I'm 42 and wife is 41, we're going to do a semi retirement hopefully in 2 years (or less) and slowly work ourselves into full retirement.

We missed our goal, but with the 2008 crash and now this year's markets, its like taking 1 step forward and 2 steps back.

Hang in there, its worth it, even if you just build up the security of not being in debt and worrying about paying your bills.