In 2015 when I graduated physical therapy school, my main focus was to reach financial independence as quickly as possible. At that time, I calculated my annual spending amount, added a buffer of 40%, and used that to determine my goal net worth to “retire.” In 2017, I updated those numbers and reduced the buffer above my spending level to 25% because that seemed to be much more in line with what my realistic spending would be like in the future. Well, here we are 8 years after that update, and my life looks much different than I ever imagined it would. I left full time work in 2018 to semi-retire after hitting my financial independence number, traveled all around the country and the world, built a business that earns more than I thought possible with only minimal effort, got married, and had a baby. I’ve worked less than 1,000 hours total in the clinic over the past 7 years, and I haven’t worked at all as a PT in almost a year and a half now. Some of these things I planned on but many things that have happened I couldn’t have predicted.
As of my last update in July, my assets were equal to 146 times my average yearly spending, which is obviously a little absurd. I’ve gradually spent a little more each year as my net worth has grown, but my spending hasn’t come close to keeping up with my asset growth despite no longer working as a physical therapist. Whitney is also well past her financial independence number, and we continue to have way more money coming in each month than we spend. After having our baby last year, we have had a lot of discussions about what this next chapter of life will look like for us, and it has become clear that we have no reason to not spend more to have a life more in line with what we want. Basically being frugal was needed to get to where we are, but we now have our business and our assets working for us to a degree that will allow us to spend multiples of what we were in the past without any financial strain at all. Getting out of the frugal mindset has been difficult for me, but I’m actively working on it and doing my best to spend money on things that improve our quality of life or decrease our stress.
In August, we moved from our townhouse we paid cash for in 2020 in order to rent a much nicer and bigger house in one of the best neighborhoods in our area (you can check out the video we just did talking more about these decisions). I’m now spending about 6 times more on housing than I have over the past five years, but it’s still well within our means, and the upgrade has been wonderful for our quality of life. Eventually we plan to buy a house in this area, but right now it’s significantly cheaper to rent than to buy. For our move, we paid movers to move our furniture instead of doing it ourselves and risking injury (something we’ve never paid for in the past). We also decided to pay for landscaping instead of me doing it myself, which would have been an unthinkable expense for me in the past, but now it’s not a big deal and it saves me time and headache. We’re also in the process of looking at new cars to replace our ~10 year old used cars to have less worry about safety and reliability. For trips we’ve taken with Aria this year, we’ve spent extra to have nicer and bigger places to stay so that we’re all able to sleep better. We’ve also paid for our moms to go on some of those trips with us to help with watching her.
All of this additional spending along with other things we plan to do in the future means that I’ll be nowhere near my projected yearly budget back in 2017. I don’t track my expenses nearly as closely as I used to, but I’m estimating that I’ll now be spending about 4 times more than in prior years, and that could increase further in the future. With that in mind, it seemed like a good time to update all of my spreadsheets and graphs to reflect this new reality. Going forward on these monthly financial independence updates, the higher spending will be factored in to all of the multiples I use.
Income
Income from our business (FifthWheelPT and Travel Therapy Mentor) for August was our lowest of the year at just over half of what we earned in July. This wasn’t much of a surprise though because we were busy packing, moving, and getting our townhouse ready to sell, which put the business on the back burner temporarily. September will be better once we close on selling our townhouse, get settled into our rental house, and get caught back up.
Expenses
My expenses were way higher in August than in prior months as indicated above. The security deposit and first month’s rent on our new place alone was multiples of what I spent during most months in the past. We also had to pay for some repairs at the townhouse, for movers, and bought some stuff for the new house.
In total, my savings rate for the month was around 30% when all was said and done in August.
Investments
The S&P 500 was up by 1.9% in August. The index continues to climb despite weakening economic data. Inflation remains above target, but the labor market is weakening and so is consumer spending. Since 2020, the economy has become more bifurcated than at any other point in my lifetime. Those with assets feel like things are going great and are spending with impunity, while those without assets have been basically in a depression for a few years and are struggling to survive from month to month. This is a direct result of the monetary and fiscal stimulus after the pandemic inflating the money supply. Asset prices skyrocketed and cost of goods increased, while middle and lower class wages stayed relatively stagnant. In my view, this is why there has been a further rise in populism on both sides in recent years. Everyone in the middle and lower class realizes that there’s a big problem and are looking for scapegoats without understanding the real cause. Unfortunately, I don’t see this improving without a return to a hard money standard because government incentives always point toward printing more money and furthering the divide in a fiat based society.
Bitcoin was down by about 6.5% in August. After four straight positive months with the price going from $74k to $124k, we needed some time for the price to consolidate and for new buyers to come in. I’ve gotten rid of most of my leveraged positions now but I did buy some more Bitcoin in August and again have the most Bitcoin exposure that I’ve ever had. I still anticipate the end of the year being very good for Bitcoin despite the weakening economy and housing market. With that in mind, I’ll be looking for periods when things start feeling overheated or euphoric to gradually sell and probably won’t be buying any more Bitcoin in the near future.
Financial Independence Progress
My net assets decreased by 3.4% in August. This was mostly due to the lower earning month and the drop in the Bitcoin price. Next month earnings should be higher, and I wouldn’t be surprised to see a rebound in the Bitcoin price in September before having a strong Q4. I’m very happy with how my finances have gone this year with my assets up about 10% in total so far.
My assets are now equal to approximately 38.1 times my average annual expenses! This is based on my new spending assumptions going forward.
Next Month
In September we have a wedding to go to at the beach in Hilton Head, SC which we’re going to turn into a vacation by staying a few extra days. We also have the closing on our townhouse. It sold in just a couple of days after listing, and so far everything has gone pretty smoothly. At the end of the month we’re going on an overnight trip a couple of hours away to where we lived on our last travel contract. It should be fun to reminisce there a little back to the time right before Aria was born.
How was August for you financially? Let me know in the comments!
Fifth Wheel Physical Therapist 
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