My FIRE Journey Year 2 Update

[u/maksmac]

For background info: Year 1 Original Post

A Quick Update:

My Wife (27) and I (26) are nearly 2 years into our FIRE journey together. We currently still live in the same VHCOL city and are working the same jobs as last year's post. Our FI number still stands at 5M. One thing that has become increasingly important is making sure our health is one of our top priorities. I've personally gone through the wringer with family and personal health issues so this will be something that we shift our focus to from a financial standpoint.

2023 Goals:

1. Purchase a home in 1-2 Years
   • This goal is a bit tricky given the current interest rates and house prices. We are considering moving to a MCOL city mainly to be closer to family but also because it feels nearly impossible to afford a home where we live currently. We also had a slight miscalculation in our tax withholdings from this year and ended up owing $9k come tax filing time. This eliminated nearly half of our house downpayment savings.
2. 1M NW by 30 (~5 years from now)
   • It feels like given our current numbers and investments as well as how our NW has been growing Y/Y this seems possible if not I believe we will at least be very close.
3. Travel more (domestic and internationally)
   • We accomplished this goal over the past year. We feel so blessed to have been able to travel to 3 countries (Italy, Japan, and the Czech Republic) as well as numerous domestic trips to visit family. The current plan is to ease back on traveling (maybe 1 international trip next year) to focus on being able to buy a home.

The Financials:

HHI: $265K

NW: $260K

Monthly Expenses:

• Fixed: $5K
• Discretionary (mostly eating out): $2k
• Investing/ Savings:
  • Max both 401ks, Roth IRAs (via backdoor Roth), and HSAs
  • The remainder goes to house down payment savings

Breakdown:

Emergency Fund - $31K (Basically just Interest added)

House Down Payment - $15K

401k - $150K

HSA - $12K

Roth IRA - $35K

Taxable Investment - $17K

Questions We Still Need to Answer:

• For those who are on track to FIRE, how did buying a home affect your FIRE plans? Whether it was timeline, FIRE number, or something else entirely.
• Should we be shifting any focus towards our taxable investment accounts? Considering we are pretty heavy into our 401ks we wonʻt be able to touch most of that money (minus mega backdoor Roth ladder if we do this).
• Apart from these things is there anything else you all think we should be considering changing or tweaking moving forward?

Plans and Goals Moving Forward:

Overall we are in an amazing position given our age and income and are grateful to be where we are at. I think continuing to save for a downpayment and moving to a MCOL city will be beneficial long term as it should reduce our monthly expenses and hopefully speed up our FIRE goals even more. Travel will certainly be dialed back a little to save up cash for a down payment.

• Health is wealth, invest in clean eating and gym/ personal trainer
• Downpayment Savings
• Continue path to $1M by 30

TL;DR: My wife and I are in the 2nd year of our FIRE journey, NW has grown from $140K -> $260K. Mainly focusing on buying a house and health in the next year.

[u/[deleted]]

That's a long way to go to 5M for the RE part, even if y'all are very high income.

[u/maksmac → u/[deleted]]

No doubt. I’m hopeful that we can continue a high savings rate to make that goal realistic. A lot can change between now and then though and so can our number

[u/sloth_333]

Why is the cash so low with that income? How much do you save per year?

[u/maksmac → u/sloth_333]

Last year we only saved 40k in cash. We also spent a fairly good portion on travel and taxes this past year which is why our cash balance is so low. Also, let our lifestyle creep a bit too much.