Late Starter to FI Series Progress Update 2022 Part 2

golden coins in soil with young plants on a bed of soil
golden coins in soil with young plants on a bed of soil

I started the Late Starter to FI Series to highlight those of us who began our FI(RE) journeys later than the ‘traditional’ FIREes; specifically those who started in our 40s, 50s and 60s.

And if you know my back story, you already know that I started this blog because I didn’t find many late starters when I first discovered FIRE at 47. There were many in their 40s but they had either retired for many years or about to retire. No one was just starting out.

So I am eternally grateful to the 34 Late Starters who have so generously shared their stories. This proves that there are late starters out there. And the more we read each other’s stories, the less alone we feel; the more achievable our goals are when we see others like us accomplishing them.

We are a community and I want to also share our progress. Because being on the path to FI is not a get rich quick scheme 🙂 It really is like a journey – with setbacks, roadblocks and detours along the way. And we want to celebrate any wins along the way too, of course!

The first progress update was published last year (2021).

This year, we’ll divide the progress update into several parts.

Catch up on Part 1 which featured Late Starter to FI #6 – Fire For One, Late Starter to FI #21 – Vinnie and Late Starter to FI #27 – Pursuing Slow FI as a Late Starter

In Part 2, we’ll feature another 3 Late Starters – here are their original stories:

Late Starter to FI #9 – Deanna

Late Starter to FI #20 – Caroline & Scott

Late Starter to FI #32 – Jay

 

Do you have a Late Starter story to share? Please connect with me via email (info@latestarterfire.com), TwitterFacebook or Instagram.

 

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Inflation

My overall strategy is still the same – pump money into the market. However, I have thought about buying some bars of gold as a hedge against inflation but I have not done that yet. I think that will give me some peace so it’s on my radar to do.

Originally, I was a bit riskier in my asset allocation (90% stocks/10% bonds); however, I changed to 80% stocks/20% bonds back in 2019 after reading some stuff from Financial Samurai. I am glad I did!

However, we still need a hedge against inflation. We are not ready to buy a house. Owing real estate is a good hedge against inflation. The housing market is crazy here in the US so we are saving and perhaps in a few years when it calms down, we’ll buy.

Any other strategy changes?

I have had access to a Simple IRA at work and have been able to also contribute to a traditional IRA. In 2020, I switched to a Roth IRA as I feel the tax rates will be higher in the future in the US due to a lot of stimulus money that has been paid out.

A girl writing a book

Major life updates

So I have a BIG change coming up and that is I am “retiring” from full time work, taking a little sabbatical to write a book, and then I will commence working part time in the fall.

Technically it’s not really retirement but rather, a transition from full time work to part time work. Yay! There is no draw down happening yet and my husband and I will continue to invest in his 401k and my Roth IRA.

All of this became possible because we got married. We can afford to do it and I can go on his health insurance. I have a decent chunk saved in my Simple IRA, Traditional IRA, Roth IRA and HSA so they will all continue to grow.

We have plans to start a ministry and felt God moving us in this direction. Plus my full time job was incredibly stressful so this move is good for my health 🙂

On the path to Financial Independence ...

Since I’ll be switching to part time, I’m not in as much of a hurry to fully retire. However, as my husband and I start a ministry and launch my book, we will see where that all takes us …

Inflation

We’re currently in ‘Coast FIRE’ where we’re consulting part time and not drawing down assets regularly, so inflation hasn’t changed our income strategy, just our expenses like everyone else.

Inflation has changed my risk appetite in the sense that I am incentivised to keep consulting and postponing draw down of our assets in order to give them extra time to grow.

Inflation has also changed my timetable for paying off any mortgage debt – at one point we were considering paying down extra principal on our rental properties, but even these interest rates (which are higher than for residential loans) are still lower than inflation.

Any other strategy changes?

We actually sold 3 of our rental properties in the last year.

Two properties were sold to become more liquid as we were 70/30 real estate/paper assets at the peak and we wanted to be closer to 50/50. But one property was sold opportunistically to our tenants, so now our assets are 40/60 real estate/paper.

We use tactical asset allocation for the bulk of our paper assets but also have approximately 20% total invested in private loans, a dividend stock fund, farmland and cryptocurrency.

Lifestyle changes

Travel was supposed to be a big part of how we’d spend our non-work time. But given the pandemic, we have been doing domestic travel almost exclusively and not as much travel as we expected.
 
We have put this time into our consulting and also wellness activities – working out, eating better.
illustration of house with sold sign

On the path to Financial Independence ...

We have reached a basic stage of FI in that we could cover our bare minimum expenses without working. However, our plan has always been and still is to continue working at projects we love, to postpone drawing down our portfolio so we can cover our wants, not just our needs.

Our key ‘want’ was travel, which has slowed down. But we expect that will change in the next few years. In the meantime, we’re looking at this pandemic pause as a time to reflect and explore other interests.

Inflation

We really are not that concerned about inflation as our spending habits and yearly budget is not crazy. Plus we are very flexible with our needs. Hong Kong has been so expensive to live in and feed ourselves over the last eight years that no matter how much inflation has hit the food we buy in the US, we’ll be fine.

Our large expenses such as our car and our bikes were bought last year so we are fortunate to lock in 2021 prices.

We invested a chunk of our investments in a TIPS index fund and we will hold more cash than previously planned.

We feel our plan is pretty recession-proof and rock solid. That psychology, along with mathematics, are the most important things.

Any other strategy changes?

We are keeping way more liquid cash than we thought we would. Fortunately, we need to cash out our retirement accounts in Hong Kong before we leave and we can move that to the US tax free. This will help us buy a ton of bonds (and they are on sale) as well as have three or four years of cash.

Life updates

We will be retiring from our teaching jobs when the school year ends on June 2nd.

Canoe trips, bike touring, backpacking, trail running and skiing will all be part of playtirement.

Our first year, we will head out to Oregon to pick up our touring bicycles and do some outdoor pursuits. We get to reestablish our relationships with our beloved city of Duluth, Minnesota in the best months of August, September and October before we head out to the south western part of the US to do some adventures and allow snow to pile up in the mountains.

Once the white stuff gets deep enough, we will start using our ski passes at several of our favourite resorts that are near relatives so we can barter lodging for cooking and cleaning duties.

After the ski season, we will start our first long haul bike trip and bike across the United States. We are getting pretty stoked!

Illustrations of outdoor activities people with skis, bicycles, walking, running

Side hustles

My best side hustle is not having a side hustle. I have been doing some weekly tutoring here in Hong Kong, which is quite lucrative. And Sara and I will be substitute teachers from time to time when we head back to Minnesota. All of those funds will be used to take a little of the pain away from buying new gear for our adventures.

What can we celebrate?

We turned 50 years old and we will act and play like we are teenagers. I don’t foresee this to ever change.

On the path to Financial Independence ...

We have not stopped our mission of never working full time again but have opened up the possibility of recruiting to teach overseas at another destination after a two or three year hiatus.

After being stuck in Hong Kong due to Covid restrictions we need to recharge our travel and adventure batteries and see family.

It will be fun to see what not teaching will do to our psychology of living and having purpose in our lives. We’re not too worried about this, however.

Our main goal in life is to play hard and give back. We will be able to do this in a lot of different ways.

Peace. And enjoy the adventure!

Back to Latestarterfire

Don’t you just love these updates?

Life may throw us curve balls such as inflation and a pandemic but they are only detours along the way to achieving FIRE.

Inflation has made our Late Starters more cautious and hold more cash than they otherwise would have. The pandemic has allowed them to redirect their energy to other pursuits.

Congratulations, Deanna on writing a book – how exciting! And the possibility of working with your husband to start a ministry, all while on the path to FIRE with a part time job.

And congratulations to Scott and Caroline on reaching Coast FIRE where you can cover the basic living expenses without working. And thus use any income from consulting for your ‘wants’.

Jay and Sara have retired (as it’s after June 2 today!) from teaching full time, woohoo! Congratulations! I feel tired just reading about your future awesome adventures, 🤣

Reading these updates show me that we can be flexible and adaptable while on our path to achieving FIRE despite the setbacks that life sometimes throws at us.

Your stories inspire and motivate me to keep going on my own journey. Thank you very much for sharing your progress.

What are your takeaways from our Late Starters' progress updates?

Late Starter to FI Series Progress Update 2022 Part 1

stacks of golden coins on a bed of soil with seedlings growing on top of each stack

I started the Late Starter to FI Series to highlight those of us who began our FI(RE) journeys later than the ‘traditional’ FIREes; specifically those who started in our 40s, 50s and 60s.

And if you know my back story, you already know that I started this blog because I didn’t find many late starters when I first discovered FIRE at 47. There were many in their 40s but they had either retired for many years or about to retire. No one was just starting out.

So I am eternally grateful to the 34 Late Starters who have so generously shared their stories. This proves that there are late starters out there. And the more we read each other’s stories, the less alone we feel; the more achievable our goals are when we see others like us accomplishing them.

We are a community and I want to also share our progress. Because being on the path to FI is not a get rich quick scheme 🙂 It really is like a journey – with setbacks, roadblocks and detours along the way. And we want to celebrate any wins along the way too, of course!

The first progress update was published last year.

This year, we’ll divide the progress update into several parts. We’ll feature 3 Late Starters in Part 1 – here are their original stories:

Late Starter to FI #6 – Fire For One

Late Starter to FI #21 – Vinnie

Late Starter to FI #27 – Pursuing Slow FI as a Late Starter

Do you have a Late Starter story to share? Please connect with me via email (info@latestarterfire.com), TwitterFacebook or Instagram.

Disclosure: Please note that I may benefit from purchases made through my affiliate links below, at no cost to you. Additionally, as an Amazon Associate, I earn from qualifying purchases. Thank you for your support

getting started checklist

Feeling Overwhelmed?

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Inflation

Inflation hasn’t really affected my strategy, at least not yet. But who knows what will happen?

I do have some concerns about the rising cost of electricity, although a change of provider last year has actually reduced my bills from what they were.

But I do think it might be time to investigate solar options. I’d also like to get rid of my gas hot water and oven – it seems a bit pointless to be paying supply charges for both gas and electricity.

Any strategy changes?

Last year I changed my investment mix in my superannuation (retirement account) from the default settings to an all-equities mix. I just checked my super balance last night to discover it’s dropped by about $15000!

Thanks so much, Vladimir Putin, for your invasion of Ukraine and consequent market upheaval. Luckily I have at least 8 or more years until retirement, so I’m sitting tight for the moment on that.

It’s slightly uncomfortable to see the that drop though, and if I was just about to or had already retired, it would probably bother me more. But all the wonderful blogs I read that show clearly that the market recovers mean that I can watch this development without freaking out.

I suppose the other change I’ve made is that I was originally planning to pay out my home loan as soon as possible. But now that it’s fully offset, I’ve decided to just relax about that and start investing instead.

 

What can we celebrate?

I have been able to start investing in ETFs finally, now that the mortgage is fully offset.

3D of word PAID with pic of house

On the path to Financial Independence ...

I’m still on the path to FI, although admittedly over this current financial year, I’ve been a bit slacker on the savings side and have loosened the purse strings a bit. I probably should rein it in a bit!

I think I got a bit bored and also, because I haven’t had a specific financial challenge for this year it’s also reduced my focus a lot. I do have some repairs that need doing around the house, so I’m focusing a bit more on saving up to have these done.

I’m still working. At this point, I have no idea what I will do in retirement but I’m sure there will be a lot of reading involved.

Any strategy changes?

I have the same strategy ie keep saving as much as possible and continuing to live frugally.

Stock market and housing prices have slumped in New Zealand. I put money in but I’m losing more than I’m putting in. Quite depressing. Having approximate $170-$180k of investments overall (including super) and here’s what has happened per calendar year (investment gains / losses):

Year 2019 $7991.13

Year 2020 $15236.32

Year 2021 $12603.29

Year 2022 -$15053.39

I started investing on April 30th 2018 but didn’t keep the stats at that point.

 

Side hustles

I started a YouTube channel ProjectFrugal on 28/12/20 – 427 subscribers so far with 110+ videos – hard work for no reward!

Also started a blog – Project Frugal a couple of weeks ago to attempt to drive some traffic to the YouTube channel which I’m hoping will eventually get monetised. But early days on that …

What can we celebrate?

Something we could celebrate is that I achieved a net worth of $1M NZD a few months ago. Then it dipped below $1M and is slightly above it again. It includes house value etc – it was a good milestone though.

numerals 100000 candles with sparkles

On the path to Financial Independence ...

I’m still pursuing FIRE, charging ahead as much as possible and still knuckling down despite what’s happening in the market(s).

We were also looking to move to Portugal to hopefully become missionaries or semi retire but due to the recent downturns etc, we have put that on hold until the market recovers. Could be 1 to 3 years away yet.

 

Inflation

To be honest, inflation has not impacted my strategy much. Though I am really surprised by how quickly prices of goods have ballooned. For example, flour used to be RM1 per kg and now it’s RM3! That’s quite an increase! Also, recently the ringgit slid down against the US dollar, so this adds fuel to the fire.

I live a frugal lifestyle – I cook most of my food, bake my own bread and even grow my own leafy greens. I barely take overseas holidays (even local ones lol) and hardly drive (in 2021 I drove a grand total of 3000km), and my hobbies are simple and low cost – reading and gardening. Most importantly, I have no debt to service. So, I’ve not really felt the pinch of inflation nor has my lifestyle been impacted much.

So I’m currently just maintaining the same budget, though I expect my investing dollars to shrink thanks to the weak ringgit. Sniff.

Any strategy changes?

I spent most of Nov 2021 – April 2022 learning about investing. Before, my investing strategy was basically “throwing money at an investment asset and hoping for the best”. Then, frustrated that I kept hitting walls or unexpected pitfalls, I deep dived into every book and YouTube channel I could find on investing. I realised that my foundation was weak, so I was not able to evaluate which investment vehicle was right for me.

Sifting out the weeds was a challenge, however. There’s so much content out there that is written with an angle or ulterior motive, that it’s difficult to decipher what is “truth”. For example, in the Malaysian financial sphere, cryptocurrencies and roboadvisors are heavily promoted. I vaguely realise that there’s more than meets the eye and I don’t have the whole picture nor am I sure if they were right for me.

So I read books like Investing 101, A Random Walk Down Wall Street, The Elements of Investing, The Little Book of Common Sense Investing to finally understand what sound investing principles are about. Then, and only then, could I define my financial goals, investing style and even design my portfolio. I realised I should have done this before investing my money. Still, better late than never!

My current strategy: Besides contributing extra to my retirement accounts (called EPF in Malaysia), I’m also investing abut 30% of my salary each month into total stock market funds using the Boglehead method. As a Boglehead, I believe in low cost, widely diversified index funds. I also favour a passive investing strategy where I stick to a portfolio of 70% equities and 25% bonds (or bond-like instruments) and 5% REITs + stocks. No timing the market for me, though I do buy a selection of stocks and REITs on the side with “fun money”.

I’m currently busy rebalancing my very messy legacy investing portfolio to the new strategy. Untangling my legacy investments is probably going to take me the entire year or more. The process is painful but I’m glad I’m doing it now rather than at 65!

 

Any epiphanies?

Received a big a-ha moment a few months ago that made me realise that I really should stop being so hard on myself in terms of managing my finances. Gaining clarity about why I did what I did was healing, and I realise I’m doing quite well despite the mistakes I made in the past. And although I don’t know what the future has in store for me, I’m confident I can survive and figure out things in the future.

Side hustles

Currently, I have no side hustle, though my blog seems to be attracting attention from surprising places. I think it’ll benefit my career in the long run to be seen as someone who can write about financial topics!

Still, I’m currently hustling, writing numerous personal finance essays for the blog – for free, lol. My journey learning about investing has fuelled my desire to write something that can help people like me to make informed decisions about their finances.

As I said, there’s so much noise out there, and it was super hard for me to educate myself because a lot of content (at least in the Malaysian finance world) has an agenda. It frustrated me how tough it was to get the whole, unbiased picture of sound investing. A lot of times I feel like I’m pushed financial products without a solid reason WHY I should take it up in the first place.

Before this development, my website was just a place to record my financial journey, but now I feel more galvanised to write content that will help people. Wish me luck!

 

What can we celebrate?

I’ve gotten over my fear of investing!! That’s such a big deal for me. The last time you spoke to me, I was largely paralysed by indecision and confusion. Now I feel like I’m heading somewhere.

colouful lines on chart

On the way to Financial Independence ...

I’m definitely still in pursuit of FI. I’m still aiming to retire at 55, which is the old retirement age in Malaysia. (It’s 60 now) I’m more confident, judging from my calculations, that I am on track.

Before, because investing felt like such a weird, complex subject, I felt like I was flailing in the dark and that retiring at 55 is a big “maybe, hopefully”. Now I am more confident of my strategy.

Technically, I’m Coast FIRE but I’d like to add more wood to the FIRE plan for now.

And I also hope to gain clarity on when I can stop worrying that I’m REALLY safe to Coast FIRE.

 

Back to Latestarterfire

Thank you Fire For One, Vinnie and Elizabeth for sharing your progress updates. It’s so exciting to read that you’ve all had wins in the last year from paying off your mortgage, getting to $1 million net worth to conquering the fear of investing.

I love that all our strategies are evolving and we’re all still on the path to Financial Independence even though the markets are volatile and inflation is affecting our cost of living.

It’s going to be an interesting year ahead! Looking forward to next year’s progress updates already, haha 🙂

What is your progress on your FIRE journey? Update us in the comments below!

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