We broke two different records this quarter:
Our net worth increased more over the past three months than in any other quarter ever! This was not an easy task thanks to the turmoil created by Brexit last week, but we stuck to our investment approach and benefited from a market rally in the last few days.
More importantly, we saved 44% of our post-tax income this quarter, which is the highest savings rate we’ve ever had.
That means we have hit back-to-back record breaking quarters!
Through the first six months, we have saved over 90% of what we saved in ALL of last year!!
One driver to this increased savings rate was the fact we reduced our grocery bill by over 55%. I’m preparing more posts in the coming weeks to outline the other large drivers of my budget this year so be sure to subscribe at the bottom of this article or check back in at a later date.
The goal for Q2 was to save $12,168. Excluding the value of my whole life insurance policy being cashed out, we ended up saving $10,717, or about 90% of our goal.
Altogether, we’re still on pace to accomplish our goal set earlier this year and to reach a net worth of zero by Thanksgiving.
Within this quarter, we did hit 100k in assets for the first time! It was quite the accomplishment, but I’m happy to say it was a product of our combined goals and attitude towards personal finance. My girlfriend had an excellent post where she talked about how we’re in it to win it – together.
If you’re doing the math in your head right now, then yes, we do have over 117k in student loan debt. You can read more about our unconventional approach to tackling student loan debt where we are focusing on maximizing our wealth instead of accelerating our debt payments.
As our assets grow, it will become more meaningful to focus on our savings rate as opposed to the fluctuations in our net worth. Our assets might take a hit in the market or be pushed up because of additional global optimism. Either way, we want to hone in on what we CAN control, which is our savings rate.
Forecasting Ahead — WAY Ahead
Based on a conservative 3% withdrawal rate and a few assumptions outlined below, if we kept at our current pace and stayed within our current lifestyle, we can expect to reach FI and “early retirement” by the ages of 33 (me) and 32 (future wife’s age).
Seeing financial independence as only six years away is CRAZY to think about!
I put “early retirement” in quotes because I prefer to view my path as transitioning from employee to investor. I don’t picture myself on the beach sipping on Mai Tais…at least not every week of the year.
So what are some of my assumptions in reaching FI in our early 30s?
I’m assuming we would be able to further reduce our expenses because of all the additional time we’d get back after no longer being tied to a conventional 40-hour work week. We could find more time to cook for example which would further push down our food budget. We wouldn’t need to book expensive flights on the weekend and could opt to travel only when deals become available.
I’m also assuming within the next 6 years my future wife and I will receive at least one promotion each within our career fields.
With all that said, our current goal is still to reach FI by age 35 because we want to increase our lifestyle in a few realms.
Of course, I completely glossed over the topic of kids, which I would expect would push back our FI date by at least 4 years. Based on reading a lot of other personal finance bloggers talk about their experience with kids, it sounds like 4 years might be overly conservative on my end, but that can be a topic for another day.
How was your Q2? Did you hit the goals you set for yourself? Are you starting to see financial independence on your horizon?
P.S. Check out our first net worth update by clicking here.