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When Mr. FAF was still in school, our biggest hope and goal back then was for him to get a full-time job with benefits.
After Mr. FAF started working, I have found ourselves talking about early retirement more often.
We like our current jobs and want to climb up the career ladders. However, we also want to relax and have fun.
Most importantly, it is great to know that we are working hard to achieve a goal other than making more money.
Maybe it’s just the excitement of finally being a dual-income family.
But we have been discussing our plans when we are financially free on a weekly, if not daily, basis.
We want to be able to retire when we are 50.
Mr. FAF’s goal is to have a net worth of $5 million by then. I’m not sure if we will reach the $5 million status.
But I believe that life would be no meaningless without hopes and dreams.
And the best part is that hopes and dreams are free. No one charges us for having a plan for our future.
Most importantly, we need to take action to make our dreams come true.
That’s the beauty of life and hard work.
If we don’t do anything, we will never get close to even the $1 million milestone.
Related: What If Everything I Ever Wanted Became A Reality
Our FIRE financials
The net worth will consist mostly of the following:
1. Our maxed out 401(k) and 403(b)
Mr. FAF and I started maxing out our 401(k) and 403(b) in September and October of 2017 respectively. After plugging in the numbers, I realized that we will each become a millionaire in 25 years.
Our combined retirement investment is estimated to be $1,715,650 when we are 55 (in 19 years for Mr. FAF and 14 years for me). We are currently not investing in our IRA accounts since Mr. FAF wants to save cash for our other investments and expenses.
He unwillingly agreed to max out his 401(k) at my suggestion, so I will let him have his way with the IRAs.
Related: How We Discovered We Will Be Millionaires By Doing One Thing
2. Our real estate (primary resident & future rental property)
We are aggressively trying to pay off the mortgage on our primary residence.
I know this point is controversial since some argue that we could invest the cash in a high yield index fund instead.
But for Mr. FAF and I, we hate the idea of having debt and don’t want the huge mortgage dangling over our head every single day.
It’s a personal preference. The math might not make sense, but our emotions and risk consideration do.
After paying off our primary residence, we will move up to another property or acquire a rental property which might very well become our home when we retire (aka empty nesters).
Related: Why We Feel Under Pressure To Buy Another House
3. Mr. FAF’s company stocks
As part of his benefit package, Mr. FAF got a certain number of stocks from his employer. The stocks won’t be fully vested until after 4 years. But the company has done amazingly well. Even if Mr. FAF changes jobs, he will still get stocks from his future employer(s).
Mr. FAF wants to sell the portion of the stocks that have been vested. But based on the company’s performance, I insist we keep those stocks to wait for further price increases and diversify our investment. We haven’t reached a decision on this yet.
Related: How To Be Frugal, Lazy, and Happy
4. Cash savings
We strongly believe in the power of cash. Cash is king in our family.
Although investment is important, we want to have liquidity to cover unexpected expenses (i.e. medical bills, family members’ needs) or to pursue any hobbies that may not be cheap (traveling to different countries, starting a new business).
There’s a tradeoff between having cash in hand and forgoing investment gains with such cash.
6 months of expenses seem to be a good bench mark for an emergency fund. When we retire, our expenses will go down, so we will keep that number in mind.
Our FIRE plan
Below is what we plan to do when we reach early retirement:
1. Travel to different countries
Our family lives in Vietnam and China, so traveling internationally every few years is a must for us. Maybe that’s why don’t have the travel bug gnawing at us yet. But Mr. FAF and I do dream about traveling to different places such as Europe.
We also want to explore different tourist attractions in Vietnam, China, and other countries in Asia as our hearts desire. I grew up watching a lot of Chinese drama set in the ancient time. I really want to visit the Forbidden City where most of those movies were shot.
However, we don’t plan to travel full-time. Sitting on a plane for more than 20 hours every so often to fly to Asia is a good reminder to us that traveling can be exhausting and is not always fun.
We plan to travel a lot right after we reach FIRE to let off steam and explore the world for a month or so. After that, we will head back home and continue our our lives in a different way.
Related: 7 Reasons Why Traveling Isn’t Always Fun
2. Move to an inexpensive state in the US or to Asia
We currently live in the DC area, and it’s an expensive city. Mr. FAF and I have talked about moving to North Carolina, Texas, and other less expensive states in the future.
We haven’t decided yet. But it’s good to make lots of money in one city and make the dollar go a long way in another.
Mr. and Mrs. Groovy can attest to the power of geogroarbitrage: choosing to live in a low-cost area when we retire.
Related: Our $387 Trip To Raleigh
3. Mr. FAF to become a historian
Mr. FAF once wanted to study History in college. However, after realizing the limited earning power of the field, he decided to go with Computer Science without having much passion for it.
Fortunately, over the years, Mr. FAF has been able to cultivate an affinity for the field and currently works as a Software Engineer.
Yet, his calling for History has never ceased. After we retire, Mr. FAF wants to either take History courses or read more history books to become more knowledgeable and well-versed about the field.
His dream is to be able to teach History to college students. According to Mr. FAF, there’s nothing more powerful and fulfilling than being able to influence the young minds.
Another fun activity Mr. FAF plans to do is playing video games every day.
Related: An Interview with Husband of A Personal Finance Blogger
4. Me to become a blogger
Sometimes I’m still not sure what I’m passionate about and want to do every day for the rest of my life. At one point, I thought it was blogging.
But after getting a blogger burnout, I feel like I don’t know anymore. I might try out different YouTube lifestyles I always dream about, such as:
— Vlogging about me traveling and eating out
— Doing Mukbang (eating shows where I eat delicious food at a table in front of a camera)
— Living in a tiny house
Related: 3 YouTube Lifestyles I Want To Pursue When Financially Free
5. Pick up new hobbies
We also plan to pick up some inexpensive hobbies such as dancing.
I’m thinking about waltz, but it could be salsa or chachacha, depending on our moods and health at the time.
Mr. FAF has hip pain, so doing salsa for hours when he’s 50 might not be a good idea.
Taking dance lessons could be a good workout and an opportunity for us to meet new people and make new friends.
I didn’t do so well in my art classes in elementary school. But I want to try my luck at painting again. Maybe my talent will blossom when I’m older (or not).
Having watched too many classic Chinese dramas growing up (i.e. Journey To the West, Dream of the Red Chamber, Princess Pearl), I have developed a strong interest in playing the guzheng (Chinese zither) and calligraphy.
I can start those hobbies now, but I want to spend my free time making money and being with family instead.
Related: What A Luxurious Life Looks Like To Us
6. Continue to work full-time
We haven’t decided if we want to quit our full-time jobs when we reach FIRE. After all, we don’t plan to travel full-time, and I’m sure I don’t want to play the Chinese zither or write Chinese characters the whole day every day.
We might take a month or two off to travel and resume our work afterwards while pursuing our hobbies. But work won’t be as stressful anymore since we won’t be so worried out about money. We might even go part-time. Only time will tell.
Related: Do We Want To Retire Early?
7. Take care of our grandchildren
Our parents have graciously helped us take care of our son. When we become grandparents, I want to do the same thing for our grandchildren.
Mr. FAF keeps saying that he wants our kids to be independent and not rely on us. But I’m sure he will change his mind once he sees our cute grandsons and granddaughters.
Related: The Pros & Cons Of Living With The In-laws
Conclusion
It’s such a great feeling to be able to put down in words all the floating ideas and plans we have for our early retirement.
We could be over the moon in the beginning and become deflated afterwards. But it’s ok. As long as we have a goal to work towards, Mr. FAF and I feel confident that we will get there some day.
FIRE is just a means. Our end is to live a fulfilling life without worrying about money and everything else that has to do with money. That’s what financial independence is about.
Related:
3 Reasons Why 401(k) Is Not A Sexy Investment
How Hubby & I Discovered We Will Be Millionaires By Doing One Thing
Retirement Investment for Newbies
Our Pledge For The Million Dollar Club
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I didn’t know Mr. Faf wanted to be a historian, like what kind of history? Earth? Human? Which country? What era? Such a far cry from Comp Sci!
He likes reading history books and watching history documentaries. His latest obsession is Mongolia. Sometimes I tell him one of his ancestors might be from Mongolia and he might be part Mongolian 😀
Yes, yes, YES to the dancing hobby! Dance is such an incredible way to spend some time together, engage both your mental and physical health, and make new friends. I can see this as a great social outlet for you guys, especially if you choose to live in the woods, haha.
We’re kind of like you in that we probably hold onto too much cash for the comfort of many PF bloggers. I know we could be making more money if we invested it, but for us, the flexibility that cash offers us in this stage of our lives is worth it.
Great post!
I will try to find a frugal way to learn how to dance too. I mean, it’s fun to go to dance classes with other people. But if it’s too expensive, we will resort to Youtube videos and look up dance groups on Meetup 😀
That is awesome, you guys are doing so well…. and really seem to have that plan well laid out. I really wish you guys all the best.
I am already planning geoarbitrage as soon as we hit FI…. i have a couple US states in mind, so yeah… just counting down the days lol
Wishing you guys all the best. Cheers!
Thank you! I wish you all the best with your FI journey as well! 🙂
Sounds like a great plan! I will say that kids can be a very big expense depending on their interests, and especially when they get a bit older, so besides cash, saving in an IRA or 529 will allow you to save for those future expenses, since you won’t be able to touch your retirement funds without penalty.
For international travel to Asia (or anywhere far away for that matter), we plan to pick a spot as a home/hub and then do small regional trips from there, and stay/visit for an extended time, so we can take our time seeing everything, to alleviate the travel exhaustion.
We picked Florida as the state to reduce our expenses in FIRE, and we make that move next year!
Wow Florida sounds like a great place for FIRE! I need to look into that as well. I like your plan for the Asia trip. That sounds really efficient. Hope you’ll have a great trip! 🙂
Keeping company stock for even a single day pay your first opportunity to sell it is not smart. Listen to Mr. Fa FAF on this one. I kept stock one month longer than I had to for tax reasons and lost $60,000. When it comes to vested benefits take the money and run!
I sold stock over the years that if held until today, would be worth $300 million. It goes both ways, just depends on your company performance. Missing out on gains is just as painful as watching a stock go down.
Oh wow! I’ll keep your advice in mind and discuss with Mr. FAF. Thanks for sharing!
Thanks for the shout out, Mrs. FAF. You’re too kind! Lot of wisdom in this post. Dreams are free. And habits are free. No one is stopping anyone from having dreams, and no one is stopping anyone from embracing the habits that are most likely to turn dreams into reality. And you are so right about the power of geoarbitrage. Taking the savings and home equity you’ve built up in a high-cost-of-living city to a low-cost-of-living city is a great way to turbocharge your drive to financial independence. Great freakin’ post, Mrs. FAF.
Thank you, Mr. Groovy! I think a lot of us got the geoarbitrage inspiration from you 😉
Love reading this post. Dreams are free and it’s fun / educational to read your FIRE plan.
Thank you for your kind words, Pratheeba! 🙂
I like your plan. It’s going to change, but you need something to shoot for. I know what you mean about blogging. Everyone gets burned out sometime. I’m having a hard time this summer. Hopefully, I’ll get back into the groove once school starts.
My future goals – take up fishing, run a nice Airbnb, travel more. 🙂 See even a retired guy needs goals.
It’s hard to imagine you getting blogger burnout, Joe. You seem to always put out great content that is relevant and helpful.
I look forward to your future posts about AirBnB, Joe!
A thought on the Roth IRA vs. 401k – my understanding is that when you reach a certain age you are forced to take a percentage of the 401k out every year. This is not true for a Roth IRA. So if you put too much money in the 401k you will be eventually withdrawing a lot more money than you need each year and it will put you in a higher tax bracket than you should be in. Some places offer a Roth 401k now which doesn’t require a minimum withdrawal. This is something complicated to keep in mind when you are talking about building up millions of dollars in net worth that you don’t have to consider otherwise. Note- I am not a financial advisor, just a mom interested in saving money.
Great point, Sharon! I’ve never thought about the tax implication of the 401k that way before. I’ll keep that in mind. Thanks for your great advice!
Those are great goals. Just like Mr. FAF, I wanted to be a historian too. When I was little, I wanted to be like Indiana Jones. Be a professor, travel the world, fight bad guys. LOL.
I love history, sociology, ethnic/cultural studies. And I like watching history documentaries too.
I really like the vlogging idea. I think me and my wife would love to vlog about traveling the world and eating vegan food. Or do vegan mukbang like Mommy Tang. That would be so fun!
I like watching Mommy Tang’s YouTube channel too! Too bad she hasn’t posted in a while 🙁
You need to let us know when you start a YT channel so that we can follow you!