The Feeling of Coasting To FIRE
|FIRE means more penguins.|
Of course, this couldn't be further from the truth. However, it doesn't make it feel less true.
Based on the April 30, 2018 update, we have currently attained 37.8% progress into FIRE (with $700,000 of financial assets as the target). Based on my calculations, assuming our portfolio returns 6% annually and we contribute the maximum allowed to our registered accounts, we're on track to retire in another 9 years. Of course, we haven't had a major stock market crash since 2008, so I expect we're due sometime.
Despite the expectation of a pending stock market crash, our investments are still silently earning distributions. We won't be able to contribute additional funds until 2019 and we still have a mortgage to pay down and that will take at least another 5 years.
So really, there's no shortage of happenings.
So why this feeling?
Some people described the period between starting FIRE and getting closer to FIRE as a lull of excitement.
For me personally, when I first started, it was a lot of work reading about index ETFs and passive investing and opening TD e-series and Questrade accounts. It was a lot of work to cut expenses by cutting the cable bills or phone bills. There was also lowering our life insurance premium by switching to 100% term. Essentially, the first few months of FIRE was busy cutting costs and changing how things were done previously.
After the initial flurry, the next big thing was purchasing ETFs. We had a lot of TFSA and RRSP contribution room, so there was no shortage of ETF purchases. Wifey also had a job where I needed to monitor fund performance and prices so allocations didn't go out of whack.
Four years later, we're maxed out and now there's none of the ETF purchases to look forward to each month. Instead, we've shifted to mortgage paydown, which isn't very exciting.
Despite increasing the amount of cash and investments from $36,000 in April 2014 to $265,000 in April 2018, it's become a little boring doing these things.
That's not to say we're leading a boring life. Aside from work, we've had the birth of our daughter, opening of a RESP and spousal RRSP. We go out on weekends. Either to the park or the library. We use the splash pad or build sand castles. We go on bike rides, weather permitting, and take road trips. We prepare fancy meals and sample unique culinary delights from around the globe. The main thing is our daughter. How your life can get boring with a 20 month old is beyond me. We purchased a zoo membership for our daughter and her favourite animals to see, by far, are the polar bears.
It still feels like we're coasting to FIRE.
And yet... we still have a long way to go.
In the end, you're not really coasting. You're still working towards something. It's just progress doesn't seem like progress as things have essentially become more automated.
Those dollars we cut back on in 2014? Well, they're still off the books and they've carried on into 2018.
Those ETFs that we purchased over the years? Well, looking at distributions alone, the earnings would have covered 10% of our yearly expenses. If you include unrealized gains, our ETFs would have earned enough to cover 40% of our yearly expenses in 2017. That's a hefty weight off our shoulders.
With all this extra money, we don't need to stress the small stuff. This in turn increases our worry free enjoyment of life.
Previously, when we were saving 10% a year and expected to work until the age of 65, that would make life's journey much more daunting.
So, while it feels like we're coasting, I wouldn't trade our current financial situation with our old one. Frankly, both would feel like coasting. Only our current situation, we wouldn't be coasting for as long a time.