The Sprint to FI

2021 Q4 Quarterly Report

Here we are at the end of another year, and what a year it has been.  The highlights for me this year have been the continuation of the COVID pandemic with all its new and exciting variants, the decline of my father and my subsequent  move to the UK to help care for him and my mother, and the markets continued climb upwards, with the odd dip here and there to make things interesting.

 

How are we coping with COVID?

As I have mentioned in previous posts, Cat and I have been working from home on and off for years so this permanent work from home is no big deal.  The biggest issue we personally see is the continuation of the pandemic causing travel problems; especially international travel.  Given that I am in the UK and Cat is in the US at the moment, travel is very much an issue for us.  On a larger scale the issue is that it is still killing large numbers of people, even larger numbers getting sick, causing extreme stress on healthcare systems and workers.  I have seen the effects of this first hand, with regards my father and his various hospital visits.

 

Living in Westward Ho!

Living with my parents has been eye opening.  Frankly, you probably don’t appreciate the issues that you will face as you age, until you see how difficult even the basics are for the old and infirm by spending time with them.  I think, because of the young age of the FIRE community, there is a real risk here of early retirees getting caught with not enough resources to cope with aging.  It’s not a joke, and even hourly paid care, is not cheap. If you end up in a situation where long term disability is a concern, it could potentially eat all your investments. If this happens before the age at which you can qualify for benefits like social security, you could be completely fucked.  It is something to consider.

One of the best ways to put off any health issues is to maintain a healthy lifestyle, but no matter how healthy you are or appear to be there are always random events that cause problems like accidents.  I will discuss this in another post I think because there is some depth to this.

 

The Numbers

Despite pulling about $12k out of the investment account to fund the UK trip, purchase a car and get myself set up over here, I have managed to claw back most of that $12k.  My percentage that I put into the 401K was low this year at 6% as I wanted to strengthen my cash position.  I am glad I did that as I used a lot of cash this year.  What this means though is that I need to further focus on that, next year.

The Roth IRA has shown good growth, and the pension has done well considering its a managed fund. It is actually in Pounds Sterling, but I convert to USD to make the charting easier, however this raises valuation issues with it due to exchange rates. Currently it fluctuates around the $100k mark depending on the rate.

I should note that I contribute to my Roth in Q1 to the full amount allowed ($7k) so the growth you see here is all market growth.  I use a single fund in the Roth and that is FXAIX.

And lastly we can see the dip in the cash value in Q3 due to my using some of it for the UK trip.  However we can also see that I have most of that back.  I don’t list my depreciating assets but $8k of that $12K  is now a small blue Citroen C3 so I can reclaim some of that cash if I need to by selling the car.

Our total number if I include Cat’s investments and retirement accounts brings us to $1.05M.  Not quite at our FI number yet but very comfortable.  We could LeanFi on this if we wanted to. We don’t want to.

Plan for 2022

So what’s the plan for next year I hear you say?  Well, I have increased my 401k contribution to 21%, so I should get about the max in there ($27K), and I also plan on fully funding the Roth IRA and HSA again.  I would like to get $10k-$20k into the investment account too.  The goal is to have $100k-120k for bridging retirement to age 62 for my social security payments, and potentially a house deposit. Between Cat and I, that would add up to about 100-200k in cash which we think should be enough.

There is also a possibility of bonus for both of us in Feb/Mar time so that would be very welcome in potentially adding to the cash pot. At the moment my total net worth is $389k.  By Q4 of 2022 I would like to see the total at about $450k with a stretch goal (assuming the market does well for us) of $465k.  This would probably give us a total, including Cat’s investments of about $1.2M, maybe more if we are lucky.  Ideally I think we want to be at about $1.5M before we retire, but this is always up for discussion, as we are not too far away from social security at 62.

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