When I first started this blog and began writing about my progress to financial independence (FI), I put a lot of thought into my goal net worth amount. That goal amount combined with my current savings rate, monthly expenses, and estimated investment returns are what I’ve been using to track my progress to FI each month. The problem is that over the past 14 months, since I started documenting my progress, my ideas about what financial independence is and what I plan to do when I get there have changed. Initially, I took my current yearly expenses, added a 40% buffer due to uncertainty in the future (likely kids at some point), and then multiplied that amount by 25 (based on the 4% rule) to figure out the amount that would be my target.
After reevaluating, I believe the 40% buffer is very conservative and probably not realistic. My initial reasoning was that my yearly expenses will inevitably increase once I finish traveling and settle into more permanent housing and will also increase once I have children. While I still believe that my expenses will increase, I have decided that a 25% buffer is probably more realistic especially when considering the fact that I will likely still have some sort of income after financial independence, although I’m still not sure what I plan to do exactly. In addition, I plan to spend at least a portion of each year living outside of the United States (at least in the beginning) in lower cost of living areas such as southeast Asia. Traveling and living abroad should be a great way to broaden my worldview while simultaneously decreasing my expenses.
I have now adjusted my spreadsheet to reflect the decrease in my spending cushion from 40% down to 25% and the result is pretty cool. All of a sudden my FI date is about 8 months closer, and I’m almost exactly halfway there after only working for two years. Seeing this result made me reconsider my goal. When I started this blog my plan was to reach financial independence with only a five year working career which would have been right around my 32nd birthday. After steadily saving more and more each month over the past year, the estimated date got closer, and now after this adjustment and a change to my estimated monthly savings last month, I have a new target in mind.
My new goal is to reach financial independence at the age of 30 after only a 4 year full time working career. I define financial independence as my current yearly expenses plus a 25% buffer being 4% or less of my total net worth. Although this goal may seem lofty, I am 100% certain that I can achieve it with higher paying travel jobs, working as much overtime as possible, working PRN jobs when available, and continuing to hustle with bank account and credit card sign up bonuses. I also plan to begin seeking out opportunities to make extra money by writing posts for other blogs and continue to earn referral bonuses for matching other travel therapists with a couple of my favorite and best recruiters.
It always feels great to put my goals out there for you guys to hold me accountable and follow along. The blog has grown a lot lately, and I sincerely appreciate everyone that reads my posts. I want to encourage everyone reading this to create your own financial goals and share them publicly for critique and to create accountability. I welcome any comments or questions in the comments section below! What are your goals for the next two years??