Category Archives: Financial Independence

Why I Don’t Follow My Passion Full-Time

I wrote a post a while back about my Golden Handcuffs. I went into detail about how I’m not in love with my job but it offers some decent pay and flexibility, I don’t actually hate it, and it’s most likely my fastest way to financial independence, so I stick with it. I’ve been on a podcast listening spree lately and was listening to an interview with Kevin Kelly (I recommend checking this guy out – he is extremely interesting to say the least) and he mentioned following a path for something you are good at instead of going full bore into a passion which you may not be. He used the fact that he enjoys singing, but couldn’t carry a tune to save his life. Our ERE friend Jacob has said something similar as well in his book, “…pursue something you’re good at rather than something you’re passionate about.”

Now it may come as a surprise to some but my day job, which is accounting, is not my passion. Freshman accounting class came extremely easy to me. I aced it actually, with little effort, and couldn’t believe that others struggled with it. Debits have to equal credits, and assets have to equal liabilities plus equity – how hard is that?? It clicked after some research about the profession and discussions with a professor that it would most likely be a good fit for me. Numbers, decent pay, defined career progression, low cyclicality, etc., all seemed like a “smart” profession to get into.

Fast forward to now, and 27 year old me is still in the same profession. Has it evolved into a passion? Hell no! But I don’t hate it. It more than pays the bills, and is helping me reach my biggest goal of financial independence.

Personally, there are four main reasons why I don’t follow my passion full-time:

  1. Passions can change. When I was 16 years old my passion was girls and cars. At 18 it was girls, guitar, and poker. At 21 it was beer, partying, and money. Now it’s traveling, lifting, and financial independence. I think I’d be a pretty pissed off today if I had tried to make a living following around girls, while drinking beer. Maybe for others they have been passionate about the piano since age 5, and still til this day play at least an hour a day. But that’s just not me, and I’m okay with that. I like trying new things, and once I discover a new hobby I like, I dive into it head first and research it as much as possible (hello lifting and financial independence). Maybe once I become financially independent my new passion will be woodworking, or guitar again, or helping people get their financial lives in order. I don’t know, and that’s what makes the future exciting.
  2. Passion doesn’t always pay the bills. I’m pretty sure I couldn’t make a living drinking beer, or even playing guitar. Poker pays the bills for some, but seems like you have to be the best of the best to support yourself on that career path. Living in NYC I can only imagine how many struggling entertainers, artists, musicians, etc., there are that have tried to make their passions into a career, and are just coming up short. I’d rather go down the accounting path, something I’m really good at and build up a nice nest egg that can finance my passions in the future, and not at the expense of my retirement or a future family that may depend on me.
  3. Relying on your passion to make a living may lead to losing that passion. If you do anything full-time, it can get old after a while. Especially relying on a passion that might not pay well. You’re going to have to do whatever that passion is, A LOT, and it might not bear the fruits you have expected it to. Do I love ice cream? Hell yes. But would I still love it as much as I do if I ate a pint of Ben and Jerry’s every night? I don’t think so. Moderation is key. I believe we enjoy many things in life because we aren’t privy to them 24/7. Your brain becomes unphased by the constant interaction with that food or passion, and it might lose its luster. I love reading and blogging about financial independence, but if I had to consult with others for 40 or 50 hours a week on their financial lives, and then at night blog and research the topic, maybe I would run out of steam and get bored with financial independence – nah.. I don’t think I would either.
  4. You might not be good at it. Just because I loved playing the guitar when I was 18, does NOT mean I was good at it. Like I mentioned above, Kevin Kelly loves singing but doesn’t really think he would get paid to do it. Coming to terms with this early is important, before you quit it all to follow that passion, when in reality you stink at it and no one has told you yet (or you ignore them). I was not fooling myself at all with the guitar, I knew I’d never be the next Eddie Van Halen.
  5. I just don’t actual know what my passion is! In all honesty, if my passion changes – do I really know what my passion is? Or even have one? Maybe these are just things I enjoy. The dictionary definition of passion is “an intense desire or enthusiasm for something.” Maybe I just haven’t found my passion yet, or maybe I don’t have one. But I know the things I enjoy, and I’m more than happy to use my free time to explore those things.

Now I’m not saying this is the right path for everyone. I don’t doubt that some people have a deep fire burning inside them for something, and are willing to exert all their effort and give all their time for that one thing. But personally for me, I think I’ve made the right decision to apply my time to something I’m good at, and explore my “passions” in my free time.

Are you able to follow your passion full-time? Would you advise someone to follow their passion, or do something they’re good at which pays the bills and follow their passion in their free time?

Moved to Manhattan to Make More, Save More, and Speed Up FI

Everyone’s path to financial independence is different. One of the big differences is where people choose to live while on their journey. I have seen blog comments and articles about how it is impossible to save any money while living in Manhattan, or how much harder it is to reach financial independence in a big city with the associated high cost of living. So instead of just telling people that it has benefited me financially and sped up my path to financial independence, I figured I’d be more transparent about how it has helped me specifically. There are always pros and cons to any situation, but it seems that the pros have been making their presence known more than the cons since I made the move to Manhattan.

Below I’ll explain how it has directly affected my personal income statement:

Income: Now this one is very dependent on personal situations, industries, performance, economy, career trajectory, employer, etc. My employer gave me a 12% raise for the move along with a one-time bonus. The also paid for all moving costs. These benefits made the move very affordable, and in actuality instantly increased my income and net worth. The move and job switch has also given me other opportunities to increase my pay, which I would not of specifically had if I remained in my other role in a smaller city. Over the course of an 18 month period my income increased a total of approximately 50% from my previous income before the move.

Own downside is that NYC also charges you another ~3.5% on your income for the honor of living here, in addition to New York state income tax.

Housing: My rent has increased approximately 90% or $600. I previously rented a three bedroom house in New England, and now rent a somewhat small Manhattan apartment within walking distance to work, and share it with two roommates. My roommates are my friends, and although I’d like my own place from time to time, I enjoy living with them for the most part, and would rather lower my cost of living with roommates than rent my own place. (Increase of ~$600 or $7,200 per annum)

Utilities: Have gone from about $300 a month to $100 a month. It costs a lot of money to heat a three bedroom house. It costs a lot less money to heat an small apartment, especially when heat and hot water are included in rent. (Savings of ~$200 per month or $2,400 per annum)

Transportation: Has gone from $400 a month to $50. I owned a car before the move, which was fully paid off. Including insurance, property tax, maintenance, and gas, it easily cost me about $400 a month. Right now I walk to work and for most of my errands. I take the subway from time to time at $2.75 a ride. If I want to visit the family or friends I take the commuter rail or Amtrak to their vicinity, and then usually someone is nice enough to swing by the train station to get me. (Savings of ~$350 per month or $4,200 per annum)

I sold my car for $6,500 when I moved to Manhattan. My savings ignores the fact that I had this money tied up in a depreciating asset. I used these proceeds to pay down student loans.

Another saving I didn’t include above comes from the fact that I have three huge airports within my reach where I can shop for killer personal flight deals, and never really have to worry about layovers since I can fly direct almost anywhere. This is a big plus for me since I fly a decent amount for personal travel.

Groceries: Food in the city costs more, and if you shop at the local grocery store prices are probably 25 to 50% higher than what I was used to. But then I found a hidden gem when it comes to grocery shopping in Manhattan – Trader Joe’s. TJ’s has been a life saver. For those who know TJ’s know they eliminate the middle man, and go straight to the source (i.e. farmers, producers, etc.). Therefore their prices are much better than the local corner grocery store. (Increase of $100 per month or $1,200 per annum)

Eating out / Restaurants: This expense can literally eat you alive in the city. In my new role between fancy work dinners for the hell of it, travel work dinners, counseling lunches, late work nights, work drinks, etc., I get my fare share of fancy restaurant food in Manhattan and around the US. This definitely helps curb my appetite to go out and drop my own cash on a fancy dinner. Therefore there has been no incremental costs for me, so I’ll call it a wash (when in reality this has actually been a savings for me since I used to go out more than I’d like to admit to my wonderful readers).

Gym: My only requirement for a gym is decent hours and a squat rack. When I first got to NYC I found an independent gym, within walking distance to my apartment, which was actually cheaper than my gym previous to the move (due to my negotiations). They have become more popular so now the price is pretty similar to what I paid before the move. Avoid the fancy box gyms, which include laundry service and hotel amenities, and gym memberships are pretty reasonable in the city. (No increase or savings)

Clothes, toiletries, home goods, etc.: I buy all this stuff on Amazon, minus clothing. Therefore this is a wash for me and doesn’t really matter where I live since I purchase online.

For those keeping track, my expenses have conservatively increased by approximately $150 per month or $1,800 per year. My cost of living adjustment alone when I first moved here outweighed this cost increase, along with covering the added NYC income tax. Therefore every raise and bonus thereafter has been icing on the cake, and padding on the investment accounts.

Now as a reminder, this is my personal experience moving to Manhattan for work. Others may have lifestyle creep, a job that doesn’t give them a COL adjustment, a family of their own which would cost more for housing, etc.

Now living in Manhattan hasn’t been all peaches and cream, and of course there are some negatives for me. For me personally not having a car to be able to hop in and visit friends and family on a whim, not having a yard, and the increased cost of living have been a pain at one time or another.

Have you sped up your path to FI by making a physical move? Would you give NYC a shot if it sped up your path to FI? Feel free to ask any questions if you’re thinking about a move.

Financial Independence Stealth Mode

As people on the path to financial independence know, it can sometimes be hard to stay true to your financial goals while still being very involved socially with your friends, family, and coworkers.

I learned this lesson this past weekend. I was asked to go to a dinner that was $50 prix fixe. Add in NYC sales tax of 8.875% and 18% gratuity and you’re looking at about $64. Plus subway there and back, and I would have been down 70 bucks for a dinner. So I commented back “that’s out of my price range.” Boy did I regret that. The person who invited me responded with “what do you need to save for? YOLO. A ring only costs $10 grand.” Next time I’ll just say I’m busy.

For reasons similar this, I’m in what I like to call “Financial Independence Stealth Mode.” Sounds pretty bad ass if you ask me, but in actuality it is more of a pain in the ass than anything. I really got excited the other day when a coworker told me about a new fancy Starbucks coffee machine that was installed at work. He told me it’s a life saver since the coffee tastes good, and he spends too much on coffee and is trying to lower his expenses. I really wanted to blurt out “I know exactly how much money I waste on coffee, and I’m currently trying to cut this expense out to speed up my financial independence date.” But in reality I just ended up saying “you and me brother.”

I’ve noticed in life you are always going to have friends and family that never really take charge of their finances and will live paycheck to paycheck for their foreseeable future, and not ever set financial goals or plan accordingly. The last thing these type of people want to hear about is how you are contemplating your domestic/international mutual fund allocation in your brokerage account or how you are struggling to decide how to deploy your capital since you’ve already maxed out your 401k, IRA, and HSA for the year. It’s tough to know when to share your experiences and personal finance advice, and when to shut up. With close friends and family, I’ll usually just say “If you want to get to X financial goal, I’ve done a lot of research and here is how you should approach it.” But with coworkers and friends who aren’t that close, I usually just keep my mouth shut.

Decisions about who you surround yourself with on this journey have to be made and those decisions can be tough. True friends and family will understand your goals, and be accommodating. Those that are spendy-pants and aren’t willing to take charge of their personal finances are people I’ve been removing from my circle over the past year or two.

Sadly, in “real life” only four people know about my goal to retire in my 30’s. It’s sometimes tough to differentiate between my personal life and Fervent Finance who is allowed to speak his mind freely about financial independence without any repercussions. Therefore I’ve realized it is great to have some outlets to be able to share your goals and discuss financial independence. Personally this blog has been great for this. I can share my ideas with like-minded individuals, learn about what has worked and not worked for others, and spread the financial independence gospel. Also I’ve learned, as Justin at RoG wrote about, optimal spousal selection is key. I’ve been very lucky to have a girlfriend who is sipping the financial independence Kool-Aid with me. It’s so much easier to be on this journey when you have a partner in crime who shares similar goals. She’s great when I want complain about how bad some people are with their finances, as I know readers don’t want to hear about that all the time.

While it may be a pain to be in Financial Independence Stealth Mode, I’ve found it works best for me. If someone wants to talk personal finance with me and is open and willing to listen without judgment, I’ll be happy to share my story. In the meantime I’ll confide in this amazing online community and bug my girlfriend every time I get excited when I make a deposit to Vanguard.

P.S. – The picture in this post is of the hyped up Super Blood Moon from Sunday night, from a midtown Manhattan vantage point. More like super disappointing if you ask me.

Are you in Financial Independence Stealth Mode? Have you had to make some tough decisions lately to keep your life and goals in line?

The Golden Handcuffs

I’ve been meaning to write this post for a while now. The topic is a very difficult one for me, and one I’ve been struggling with consistently for the past year.

Throughout the course of my life, certain “life rules” have been instilled in me. These guidelines are supposed to lead to a “successful” life. Your parents, aunts, uncles, etc. all say work hard in school, get good grades, get into a decent school, graduate and get a good job. Then work hard to move up the ranks. Someday you’ll be able to buy a big house, and maybe a second house on the water where you keep your boat. And then finally, once you reach your 60’s, you’ll retire from a fruit-bearing 40 year career, and retire to golf and your grandkids.

Coming out of college I figured this would be my life. I started working in accounting at 21 and set a goal to get my CPA and then get a promotion every few years to make sure I was making six figures by 30. Then I’d make partner in my mid-thirties and be earning multiple hundreds of thousands of dollars by 40, easily on my way to a large home, a second house, and a boat.

I realized pretty early on that this was not going to be for me. I was 21, working all sorts of crazy hours in my first busy season, and realized that this was not for me, especially for the next 40 years. For this reason I told my mother facetiously that I was going to retire at 28.

Two years later, I was 23 and still not happy. I was working in a job that didn’t really interest or challenge me, and I didn’t really feel like it was a great springboard to a career I could enjoy and would perhaps bear the fruits I figured I would want/need. So I jumped ship. Went to a much bigger, internationally recognized firm where I’ve been for almost four years now.

Things seem great from the outside. I mention where I work and what I do and I get lots of “ooohs and aaahs” from family, friends, and strangers. I’m 27, live in Manhattan, have a somewhat fancy job title, make a six figure income, and get to travel for work, life must be great! Well life is great to an extent, but what people don’t see are the parts that suck.

Last week I posted about my recent vacation. On the Friday at the end of that vacation I got an email from my boss that read something like this: “Hope you’re enjoying vaca, you’re flying to XYZ on the 6am flight Monday morning.” Ugh, what a way to ruin a vacation. This isn’t an every week occurrence, but it does happen occasionally. Then there is the 24/7 emails flowing in, the expected ASAP response times, and the ridiculous deadlines that require night and weekend work. Very rarely am I ever allowed to really “sign-off” and get away from work. Work pays for my cellphone and therefore expects me to respond at all hours. I hear things like: “I’m sorry you’re going to have to work this weekend, but hey, it’s the name of the game with what we do.”

This is where the handcuffs come in. People from the outside may say “tough it out, you can’t complain, you’re in a great situation” or “well just quit then and get another job you’ll enjoy.” I agree, many people have it worse. I have thought about getting another job. But what I’ve realized after six years in the working world is I don’t think I’ll ever be happy working for someone else. Maybe if I could find a job that I only required me to work 40 hours a week, didn’t make me subconsciously think about it outside of 9-5, and didn’t derail my financial Independence plans then that may increase my happiness, but most likely not to a level where I’d think “yeah I want to do this for another twenty plus years.”

So far I’ve decided to put my head down and work. I just finished Early Retirement Extreme by Jacob Lund Fisker, one of the godfathers of financial independence. In chapter 7 he says “…salaried work is the preferred method for accumulating a fund for financial independence” and then goes on to say that on the path to FI “…pursue something you’re good at rather than something you’re passionate about.” Personally this is the trajectory I’ve taken, and I try to fit my passions in where I can, and I rationalize that there will be plenty more time for them once I reach the big goal of financial independence.

The golden handcuffs have kept me from exploring other work or entrepreneurial activities. Earlier this year I calculated I could become financially independent in September of 2026. That’s only 11 years away!  It was a conservative estimate as well. Most people don’t retire until their sixties, and I’m in a position to speed that up by almost 30 years. I’m in a place where I know, to an extent, how much I’ll make over that time. My income, while not being the highest it could be, is decent for my field. I’ve established a name for myself in my firm. I get to travel for work, and sometimes parlay those trips into personal trips. The work I do can be fun at times… but not as much as I’d like of course.

Staying put is the easy thing for me to do right now, but outside factors are encouraging me to jump ship and do my own thing. Failing or making significantly less money than what I am now scares the shit out of me. But then there are people out there, especially in this community, that have made the jump and have become very successful in their endeavors they are passionate about.

Who knows – maybe in six months I’ll say I’ve had enough. Or maybe in 10 years I’ll be handing in my resignation to my current employer as I’ve reached FI. I think if I was truly unhappy with my career path, this would be a much easier decision. But in the end, I’ve realized there is no right answer and I just have to suck it up, weigh the pros and cons, and make a decision that I’ll be happy to live with.

Are you putting your head down to reach your financial goals ASAP? Or are you taking detours which may prolong your goals, to incorporate some of your wants and passions in the meantime?

The First $100k is the Hardest!

Jason from Dividend Mantra recently asked “Is The First $100k The Hardest?” I can officially answer that question with a resounding “YES!” as I just crossed that barrier last week. Woo hoo!

Man was I ecstatic! It’s hard to believe that I just started on this journey to financial independence last year, and really didn’t get serious until the end of 2014. In the past 365 days I have been able to increase my net worth approximately 67% to over $100,000! And that was without any windfalls, just hard work and dedication.

Last year I was already somewhat “decent” with money, but I could have been a lot better. I was contributing over 10% to my 401k. I had sold my car as soon as I moved to NYC. I was paying down my high interest rate student loans first. I was never someone to just shop for the hell of it. I had a decent job. So I’m not going to deny, that the cards were already stacked in my favor. It just took one conscious decision to knock it out of the park and really pursue financial independence to really get the ball rolling.

To get to where I am, the first thing I did was take a look at my retirement savings. I didn’t have an IRA and I wasn’t maxing out my 401k. So I logged onto my retirement account website and reset my 401k contribution rate to a percentage that I knew would get me to the IRS contribution limit.

The second thing I did was look at my expenses. I canceled the stupid $60 a month clothing subscription service I was a part of. I reduced the amount I was going out to bars and clubs in NYC, and “but everyone else is doing it” was NOT going to be an excuse anymore. I began to cut down on meals out, and began shopping more at the grocery store.

Fall of 2014 rolled around which is open enrollment season at work. I selected the HSA medical plan option and set my contributions to max out for 2015. I then opened up a Roth IRA with Vanguard and basically threw all this “new” money from cutting expenses straight into my Roth IRA. Anything left over goes into an after-tax brokerage account with Vanguard.

That’s the quick and dirty of how I got here, now onto the good stuff. What are my numbers?

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Cash – Checking account, plus money market account, minus outstanding credit card balances.
Post-tax investments – Mix of individual stocks and cheap Vanguard index funds in brokerage accounts.
Tax advantaged accounts – Pre-tax and Roth 401k, Roth IRA, and HSA. The Roth 401k is from previous years, I know better than to contribute to something other than pre-tax now!
Cash-balance pension – I have a cash balance pension plan with my current employer that I’m fully vested in. I believe if the balance remains small I can roll into an IRA when I leave, but if it gets higher I unfortunately would have to leave it alone until standard retirement age.
Student loans – These puppies are at 3% and I’m not really in a hurry to pay them off.

Man it’s been a wild ride, and it hasn’t even been that long! I’m just excited for what’s next. When I calculated my financial independence day I thought I would get to $110k by the end of the year, but as long as the market cooperates I should be able to beat that.

I definitely want to thank this whole personal finance community that doesn’t shy away from taking time to share their stories and best practices to help others like myself achieve their goals!

Is your net worth progressing as you planned? Have you crossed any milestones lately?

2015 Mid-Year Goals Review

Back in April I set my Millionaire To-Do List which was a list of goals that would help me become a millionaire someday, preferably sooner than later. Even though I did not get that post published until April, most of the goals had been in my mind since the end of 2014. I thought it would fun to do a half year update to see how far I had progressed in 2015. Below were my seven goals and my progress against them thus far.

  1. Max out pre-tax 401k – Contributions through June 30th are $10,200 ($8,800 of my own contributions + $1,400 of employer match). Employer contributions don’t count to the $18,000 2015 IRS limit, so I have about $9,200 left to go. With my set contribution percentage I should get there sometime in November. PASS
  2. Max out Roth IRA – Contributions through June 30th are $8,000 ($5,500 for 2014 year + $2,500 for 2015 year). The IRS lets you contribute to an IRA up until April 15th of the following year. I did not contribute to an IRA in 2014, so I had three and a half months to max out my 2014 IRA, which I did by March (woo-hoo!). So far I have contributed $2,500 towards my 2015 limit, and therefore have $3,000 left to contribute before it is maxed out. According to my calculations, I’ll get there in September. PASS
  3. Max out my HSA – Contributions through June 30th are $1,550 ($1,300 of my own contributions + $250 employer). My employer chips in $500 a year spread out over my 26 paychecks, and employer contributions do count towards the IRS limit of $3,350 for 2015. According to my calculations I’ll wind up $250 short of maxing this account out in 2015, unless I’m able to change my contribution at the end of the year. TBD
  4. Pay off my student loans – I’ve cut back on my student loan pay-down this year since I’m only left with loans at 3%. I’ve concentrated more on getting my Roth IRA maxed out this year. Paying off my student loans is one goal I’m not sure I’ll succeed with this year. My loans used to give me agita, but that was when the interest rates of my loans were higher. I’m fine paying these down slowly, and padding my investments in the meantime. FAIL, but on purpose 🙂
  5. Never finance a car again – Well I’m still living in Manhattan, and still car-less so this one is a big, fat PASS.
  6. Save at least 75% of every raise and bonus – No raise or bonus so far this year, those are due in September. But this is definitely still the plan. I’m actually going to shoot for 90% at least this year. TBD
  7. Once all tax advantaged accounts are maxed out for the year, begin funneling all savings into my after-tax brokerage account – Well unfortunately I haven’t maxed out all my tax advantaged accounts yet, so this takes a back seat to that. I have started selling some of my individual stock holdings, as long as it won’t penalize me from a tax perspective and moving the money over into my Vanguard account, but this is just a wash on the net worth statement. TBD

So far 2015 has been great. I’ve done a ton of traveling for work and personal, while still hitting my savings goals. Hopefully the second half of 2015 will be just as great. With all the traveling I’ve been doing I haven’t had as much time as I’d like to write for the blog, but I am hopeful this will change once summer comes to a close.

In the past six months my net worth has grown almost $20k and I plan on beating that in the second half of the year (as long as Mr. Market is nice to FF). I also feel a big personal finance milestone coming up in the next few months, so be on a lookout for a post about that!

How has 2015 treated your bottom line so far? How are you tracking against your goals? Anything happened along the way to cause revisions?

Asset Allocation – Part One

I’ve been thinking a lot lately about asset allocation. I know… I’m a wild and crazy guy. This financial independence community agrees on many things including cutting expenses, increasing income, reduction of taxes, and usually on some type of method for accessing capital (i.e. safe withdrawal rate). One thing I’ve noticed is the disparity in the community among the proper asset allocation.

There are many blogs focusing on different methods to achieve financial independence. One size definitely does not fit all. There are paths to financial independence through real estate investing, dividend investing, low cost index funds, etc.

One of the crowd favorites Mr. Money Mustache utilizes real estate and diversified low cost index funds. Dividend Mantra goes the individual dividend growth stock route and recently published a book. Go Curry Cracker and jlcollinsnh keep it simple with low cost index funds.

There are many ways to get to the goal, but no one has the answer of the best way to get there. This is because there is no best way. I have debated with myself over and over again the best way to achieve my goal of achieving financial independence. Do I buy a bunch of diversified dividend growth stocks? Do I buy rental real estate? Do I buy low cost index funds? I won’t lie, those questions played on repeat for a while.

In the past year, I have definitely settled on the low cost index fund method of getting there. The more I keep it simple, the less I have to stress about which is important to me emotionally. I still have some individual stocks that I have picked up over the years. I check my brokerage account daily, sometimes multiple times to see how my little portfolio is doing. If I stress about it that much now, who knows how bad I’d be in 10 years when I’d have a significant chunk of change in individual stocks in my brokerage account. Like I described in my last post, people like Mr. Money Mustache, jlcollinsnh, Rick Ferri, Jack Bogle, etc. have shown me that low cost index funds are definitely the way to go for me personally.

I also would love to add real estate to my assets (physical real estate, not REITs) but my current situation does not lend itself to being the right time to get involved in this investment arena. I’m quite handy and wouldn’t mind having one or two investment properties churning some passive income my way in the future, but not right now.

Are you planning on achieving financial independence through real estate, index funds, or dividend stock investing? How did you decide on your method? Does emotions play a part, in addition to the numbers?

Financial Independence Day – September 2026

Our friend Even Steven has convinced me to to dig a little deeper into my financial independence day (“FI day”). In previous posts I had estimated that I would become financially independent by age 40 which would be in year 2028. I had run the numbers quickly in the past and realized that this was probably a conservative and achievable goal. The reason I had not sit down and actually crunched the numbers is because of how many variables could actually affect the outcome. Even the slightest change in my assumptions could throw off my calculation by years. Therefore I did not want to set myself up for disappointment. But then I sat back and thought, why not set a goal and then try to beat it! Below is my calculation, along with explanations of my assumptions.

FI Day

 

 

 

 

 

 

 

 

Rate of return – I used 7% as my annual rate of return on my investments. The S&P 500 has returned approximately 11 to 12 percent annualized for the past 30 years including dividends, but historical returns do not dictate future returns so I went a little more conservative on this. In other financial independence day calculations I’ve seen anywhere from 5 to 9 percent used, so I settled in the middle. I like to keep it simple, stupid – so a large majority of my net worth will be in broad market low-cost index funds (thanks Mr. Bogle).

Spend inflation – I expect my annual expenses to increase with inflation at about 3 percent.

Safe withdrawal rate (“SWR”) – I will use the common 4 percent safe withdrawal rate to calculate when my investments alone can support my spending. For more information on the SWR, I’d start with jlcollinsnh’s stock series.

Assumed savings increase – I think I can add $5k a year to my annual savings which is a combination of raises, bonuses, side income, etc.

Year & Age – Self explanatory… I’m getting old. No longer “just graduated” from college.

Annual Savings – I should be able to save around $40k this year which includes pre-tax 401k, HSA, Roth IRA, student loan debt pay down, and savings to after-tax accounts.

Net Worth at End of Year – The calculation of this column is net worth at end of prior year times 7 percent plus the annual savings.

Annual Spend – I assumed $3k a month for expenses. I spend a little less than that a month right now but I do plan on traveling more in the future, and I currently share living expenses (apartment and utilities) with two roommates which I don’t plan to do for too much longer. This amount just increases with inflation at 3 percent a year in my calculation.

This is definitely a category that can fluctuate greatly going forward as I don’t plan on living and renting in Manhattan forever, especially after financial independence.

FI? – This is a simple calculation to see if 4 percent of my net worth will cover my annual spend.

As you can see by my calculation I project my FI day to occur in 2026 when I am 38 years old. According to my calculation, I’ll actually get there a few months before December 2026, so my FI day goal is officially September 2026. I’m going to do everything in my power to get there before then, but as we know a million different things can occur between today and September 2026, and therefore I’m going to keep an open mind to any of the changes that may come.

I think one of the most important parts to this financial independence journey is staying flexible and being able to adapt to changes. If the S&P 500 drops 10 percent tomorrow, I would not think of it as detrimental to my goal, but a great opportunity! I am currently saving more than I ever have and I would use it as a great buying opportunity. Same goes for if I decide to strike out on my own entrepreneurial endeavor. This new career path may pay less and postpone my FI date, but if it offers me more flexibility and more happiness, then this would also not be a disappointment at all.

Did I miss anything that you have included in your FI day calculations? Does this seem like a good FI day calculation that I can use and update every year? When is your projected FI day?

Dream Job

In the financial independence community, I think we sometimes get stuck on reaching financial independence and the long-term goals of how we’re going to get to our “FI date.” But what happens if you didn’t have to escape the “real world” and your career that you disliked. What if the path to financial independence wasn’t such a rush, and you did not want to leave your career with its associated paycheck? Do these dream jobs you hear people talk about actually exist?

You know these people I’m talking about… “I’m a teacher (replace teacher with nurse, physical trainer, writer, counselor, etc.), it’s my DREAM job, it’s my passion! I would do it even if I didn’t need to work.” Are they for real? Do they really enjoy their job that much? I’m sure you’ve met these people before. I can’t decide if they’re being honest, or they are just trying to justify their career path to others. I’m sure many of these people are honest, and for that I am very happy for them. Not everyone can find a career they are passionate about and enjoy doing day-in and day-out, while earning a paycheck.

So I started to think, what would be my dream job? I have not figured it out yet (or at least have not found the cahones to quit my career to figure it out), so I came up with a few ideas of what my dream job may be:

1) Maintenance at an RV Campground

Pros: I had this job about 15 to 19 years old, and I loved it. I was making $12.50/hour by the time I was 19, which wasn’t bad. I got to hang out with my friends all day, do some manual labor like weed whacking, and every weekend there was a bevy of teenage girls who were dragged there by their parents because they weren’t allowed to stay home alone while the parents went away.

Cons: No health insurance, pay probably wouldn’t go up much from there, seasonal job in nature, and I won’t even comment on the teenage girls.

2) Certified Financial Planner

Pros: I have always been interested in becoming a CFP. When I had interned at a regional accounting firm during college, I shadowed some people in the wealth management division. I got to sit in on an financial assessment of a woman who wanted to know how her family was doing financially. I loved the meeting, and even 20 year old me came out of the meeting with a whole list of things her and her husband could be doing better. I would really be able to help people out with their personal finances if this was my career (and if they took my advice).

Cons: I would definitely not work for an affiliated adviser as I would refuse to push investment products and strategies on my clients. I would have to work for an independent adviser, and then still I would be reporting to a higher-up and perhaps all my ideas wouldn’t reach my clients. To make this career work I would have to work for myself, but it would be a long road of trying to build up my client base. And I don’t know if I would like taking calls from certain clients every time the S&P dipped a couple percentage points.

3) Carpenter

Pros: My father has always been a DIYer and performed all the electrical, carpentry, and plumbing repairs at our house growing up and I would be his assistant. I’ve assisted in the building of porches, wiring houses, plumbing for hot water heaters, etc. I always liked this work because I was learning something new, hanging out with my dad, and building something tangible that served a purpose when it was completed. My favorite of these tasks was definitely carpentry because I liked using the saws, drills, and hammers.

Cons: A lot of these jobs are unionized and I would have to go through a whole apprenticeship period which would take years. I’ve worked in a lot of these settings when I was in HS and college, and I don’t know how well I would get along with my coworkers and bosses due to different interests. So if I was a carpenter, I’d want to work for myself, but then I’d have to find all my clients with currently no referrals or real experience.

4) Farmer

Pros: My grandparents owned and operated a dairy farm down the street from me when I was a child. I would ride my bike down to their house after school, on the weekends, and all summer long to help out my grandfather. I’d help milk the cows, hay the fields, pick vegetables, and anything else that arose. It was nice to be outside (if the weather was nice) learning about farming and obviously every boy loves hanging out with their grandfather.

Cons: This career is requires some extreme manual labor which can take a toll on the body. Also if you are starting a new farm, there can be huge capital outlays for land and equipment. This career requires your attention 24/7 and wouldn’t have much time to pursue other hobbies or interests.

5) University Professor

Pros: After obtaining my masters in accounting, I somewhat seriously considered getting my PhD and becoming a professor. Accounting professors were in high demand, and if you got into a decent program they would PAY you to obtain your PhD. And then starting salaries at universities after the 4 or 5 years it took to obtain your PhD averaged about $150k a year! Plus think of the pension, time off, and other paid for benefits!

Cons: A big part of being a professor at a university is publishing your work. I don’t know how excited I could get about coming up with ideas to regularly write about in the accounting field. These blog style posts on topics that interest me are way better.

6) Personal Finance Writer

Pros: While I’ve only been writing posts on this blog for a couple months, I thoroughly enjoy getting my thoughts and ideas down on paper. Personal finance is obviously a subject I’m passionate about, and I would love to spread any knowledge I’ve accumulated over the years to anyone willing to listen. So many great writers ahead of me have taken their time to teach others like myself, and I would love to return the favor to the next batch of personal finance students with posts like Post College Finance Guide or Keeping up with the Joneses.

Cons: I have no formal journalist background whatsoever, and my blog is a baby and therefore I don’t have much experience in the field and it may be quite hard to convince someone to pay me to write about personal finance or my other interests.

7) The Suze Orman Show (or better yet The Fervent Finance Show)

Pros: Please don’t laugh! But one of my guilty pleasures is watching The Suze Orman Show. I don’t know why I still put myself through the torment of watching it and cringing every time someone calls and asks a ridiculous question. It usually goes something like:

I make $50k a year. I have $7k in credit card debt, $45k in student loans, and $4k in my retirement account. Can I buy a $40k convertible?

Even though I do not agree with all the advice she gives, she does give great advice to personal finance novices that are clue-less about where to begin or how to get themselves out of debt, and she definitely does not hold back! She does not seem biased as it she tells people when their financials advisers are trying to take advantage of them and that whole life insurance policies are crap. She also usually recommends low cost index funds which I like. If I had her job, I would get to give advice that I felt would actually help the listeners and I wouldn’t have to charge them for it because I would be earning my income from the advertisement revenues.

Cons: Yelling at all the people calling up asking me if they can fund their large purchase by putting it all on their interesting bearing credit card.

In all honesty I think #6 takes the cake! If I had a career that I was exited to show up to, was passionate about, and provided me with a paycheck, it would make reaching financial independence that much easier! Now I just need to convince CNBC to let me take over when Suze retires from the program. Shouldn’t be too hard…

What is your dream job? Are you currently living it? If not, what is stopping you?

About Fervent Finance

Let the fun begin! I am a 26 year old accountant* by trade, currently living in Manhattan. I moved here from not far away New England at the beginning of 2014 to take on a new role at my current employer. In my earlier posts, such as Starting the Path to FI/RE and Rich Uncle Pennybags, I explain how I have always been interested in personal finance and investing since a very young age, but I did not think financial independence was attainable for me until I found this great online community.

Growing up I always wanted to be a stockbroker which started in 5th grade where we participated in a stock market project and visited the NYSE on a field trip. The following year my 6th grade teacher told us a story of his friend who lived in Manhattan, would get picked up every morning in a limousine and get driven down to his highfalutin job on Wall Street. From then on I was mesmerized by anything involving the stock market.

I had always been a fan of making money as well, as I knew I needed income to build my nest egg. It started with helping the grandparents with chores and projects, then babysitting, then manual labor jobs during high school and college, and side projects for a local electrician and contractor in town.

I opened up an online brokerage account shortly after my 18th birthday with my own earnings from work during high school. During that time the U.S. was experiencing a strong bull market and I could not lose a trade which added fuel to the fire. It took a couple of bad investments during college to right the stock trading ship. I knew that the path to long term gains and building my nest egg was stock trading, but then again I was young and naive and wanted money faster.

I majored in accounting because I wanted a career with a secure job market, while still somewhat appeasing to my financial interests. After graduation I lived at home for a year, paid down some student loans, bought a used car (with a loan), began contributing to retirement, and built up an emergency fund. According to all the “experts” I was reading about online, I was doing everything right. But it didn’t feel right. This was not getting me ahead. I would still have to work until at least 60 years old in a career I didn’t really find fulfilling before I could retire. The last thing I wanted to be was one of my miserable superiors 20 to 30 years down road. There had to be a better way!

That is when I stumbled upon Financial Samurai and from there my eyes were opened to Mr. MMM, 1500 Days to Freedom, madFIentist, Lacking Ambition, Root of Good, Frugalwoods, LivingaFIjlcollinsnh, and many more. My income was higher than some of the bloggers I was reading about, and they were well on their way to financial freedom. That alone kicked my financial independence butt into overdrive. I reevaluated my spending, savings, and lifestyle overall. What I think also helps is that I was already transitioning to the mindset where I wanted to do things that made me happy instead of conforming to what others were doing around me.

Therefore I decided to start to put pen to paper and document my journey for three main reasons:

  1. To hold myself accountable. The first reasons is quite selfish and I’m not afraid to admit it. It’s real easy to say I’m going to spend less, save more, invest in index funds, max out my retirement accounts, etc., but if I don’t put these goals out in the open, the harder they are to follow.
  2. Share my story. While I am only 26, I believe I have experiences that are different from many telling their personal finance stories. For one I do not have a career in the tech industry (you know who you are), I was the first in my immediate family to graduate from college, and I currently live in one of the highest cost of living areas in all of the U.S. – Manhattan.
  3. Learn from and be among other like-minded individuals. Working in business and living in Manhattan does not lend itself to meeting people with like-minded personal finance goals. It seems like everyone is trying to cram in as many boozy brunches as physically possible (my fellow New Yorkers will understand this), while breaking records on how many Uber rides they can go on.

I will do my best to share interesting stories, be open-minded, and hopefully teach and learn something along the way. I hope you enjoy the journey!

Thanks for stopping by,

-FF

* Although I am an accountant by trade, this site is for entertainment purposes only. Ideas and comments are my own and are not intended for others’ situations. Please do your own research and/or consult a professional before making your own personal finance decisions.