Financial Freedom Blog Post #11

 Dear Reader!

I know, I know. Back so soon?

I just couldn't stay away.

So, let's revisit our dear friends Millennial Revolution. Remember to buy Kristy's new book, which is amazing!

So, again, we calculated how long it would take to reach our number ( $1,004,955.00 ).

(Note: I realized I calculated this wrong and I'm actually saving even more than this, so please see the updated chart below):

Year	Balance	Savings	ROI	Total	Age
1	$206,281.96	$31,985.88	$12,376.92	$250,644.76	34
2	$250,644.76	$31,985.88	$15,038.69	$297,669.32	35
3	$297,669.32	$31,985.88	$17,860.16	$347,515.36	36
4	$347,515.36	$31,985.88	$20,850.92	$400,352.16	37
5	$400,352.16	$31,985.88	$24,021.13	$456,359.17	38
6	$456,359.17	$31,985.88	$27,381.55	$515,726.60	39
7	$515,726.60	$31,985.88	$30,943.60	$578,656.08	40
8	$578,656.08	$31,985.88	$34,719.36	$645,361.33	41
9	$645,361.33	$31,985.88	$38,721.68	$716,068.89	42
10	$716,068.89	$31,985.88	$42,964.13	$791,018.90	43
11	$791,018.90	$31,985.88	$47,461.13	$870,465.91	44
12	$870,465.91	$31,985.88	$52,227.95	$954,679.75	45
13	$954,679.75	$31,985.88	$57,280.78	$1,043,946.41	46
14	$1,043,946.41	$31,985.88	$62,636.78	$1,138,569.08	47
15	$1,138,569.08	$31,985.88	$68,314.14	$1,238,869.10	48
16	$1,238,869.10	$31,985.88	$74,332.15	$1,345,187.13	49
17	$1,345,187.13	$31,985.88	$80,711.23	$1,457,884.23	50
18	$1,457,884.23	$31,985.88	$87,473.05	$1,577,343.17	51
19	$1,577,343.17	$31,985.88	$94,640.59	$1,703,969.64	52
20	$1,703,969.64	$31,985.88	$102,238.18	$1,838,193.70	53
21	$1,838,193.70	$31,985.88	$110,291.62	$1,980,471.20	54
22	$1,980,471.20	$31,985.88	$118,828.27	$2,131,285.35	55

And you can see we are now between 12 and 13 years (not too shabby if I do say so myself!). Of course, if we have children, this number will only go up. 

To update on Mr. ItF, he has perhaps $1,035,000 now (I suppose he has done much better than I have. While I have increased about $50k, he's over doubled his money. How does he do it? I don't know. S&P 500 I guess).

So even with children I think we could still reach FI within 8 to 9 years. Though once we have children, we will have to decide if I should keep working until 55 or not (a whole 21 more years! The suspense!!).

So let's go back to #4: 

4) What is your annual, monthly, weekly and daily savings goal?

Again, using Grant's calculator, we can see here:

Year	Annual	Monthly	Weekly	Daily
1	$784,233	$63,345	$14,537	$2,076
2	$371,393	$29,999	$6,884	$983
3	$233,989	$18,900	$4,337	$619
4	$165,444	$13,363	$3,067	$438
5	$124,442	$10,052	$2,307	$329
6	$97,211	$7,852	$1,802	$257
7	$77,850	$6,288	$1,443	$206
8	$63,405	$5,121	$1,175	$168
9	$52,239	$4,219	$968	$138
10	$43,366	$3,503	$804	$115
11	$36,162	$2,921	$670	$96
12	$30,208	$2,440	$560	$80
13	$25,215	$2,037	$467	$67
14	$20,977	$1,694	$389	$56
15	$17,343	$1,401	$321	$46
16	$14,199	$1,147	$263	$38
17	$11,457	$925	$212	$30
18	$9,051	$731	$168	$24
19	$6,927	$560	$128	$18
20	$5,042	$407	$93	$13
21	$3,362	$272	$62	$9
22	$1,858	$150	$34	$5
23	$507	$41	$9	$1

(Note: I updated it so the correct year is highlighted - Year #12).

Interestingly enough, if we compare these two charts, they match up. If I save $31,985.88 (and invest it) every year, then I can retire in 12 years, which matches Grant's chart exactly.It is still pretty astonishing to see that if I save just $5 every day I can retire one year earlier.

However, there are other considerations at play which means it may very well be 21 years.

The good news is that if we have a child and I need to contribute less to my 403(b), that I only have to save and invest $3,362 a year to be on track for 21 years. Of course, it may be much nicer to retire early. 

There are actually quite a lot of items you can get for your child free (with swap meets, parents' Facebook groups, etc), so the main cost is really childcare at this point. We actually typed out a budget estimating how much a child would cost, and it comes out to about $3,118.75 a month on top of our existing expenses.

The most costly of these was childcare: roughly $1683 a month. However, if you think about it, quitting your job to raise a child (which somehow just feels different from retiring early to raise a child, though really, it's sort of the same thing), will lead you to lose out on prime years when you could be contributing to your 403(b) or 401(k) as your case may be.

Here is a great article on the topic:

https://money.usnews.com/money/personal-finance/family-finance/articles/2017-10-30/the-high-cost-of-being-a-stay-at-home-parent

One example, taken directly from the article, explains a woman becoming a stay at home mom for five years would lose a whopping $665,445 - this isn't even taking into account how hard it is for women to return to the workforce after they have children! So, if we take that into account, it could be much more than $665,445 - since we should keep in mind that is only for five years.

However, on the flip side, most FIRE'rs usually say that they don't want to miss out on the prime years of raising their children - it's true you will never get those years back, while money is just money, right? And you can always get SOME kind of job, right? Even if that means working at Starbucks or being a Wal-Mart greeter (just some of the jobs I hear getting thrown around for Barista-FI'ers).

Personally, I have a pretty good job right now. It has its ups and downs but I feel quite lucky to have a white-collar job. Once I get older, the chances of me getting this same white-collar job may not materialize.

Thanks for listening to my rambling.

I remain, your,

Into the FIRE