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.
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.
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).
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.
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.
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.
— 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
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.
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.
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.