72 Percent of Our Eggs Are in the Freedom Fund Nest!

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March was an exciting month for the stock market and for those of us who are pursuing financial freedom. Our equities portfolio suffered earlier in the year, but we finally pared our losses. What January and February took away, March returned it. 🙂 Of course, we don’t worry about these monthly fluctuations because the investments in the market are there for the long haul. Staying the course is key to the prosperity of our investments. The reason why we bring it up is because we have reached a very important milestone: we’ve accumulated 72 percent of our desired nest egg. Yay! The egg nest is full almost three quarters of the way. Let’s revisit the journey to see what it took us to get to this point.

This milestone is a very symbolic measure. It’s like going into your senior school year. You’re over the hump and the days of being an inexperienced freshman are long gone. Also, think of how you feel when you get in your car and see that your gas is three quarters of a tank full. You can drive very very far without worrying about running out of gas.

In the FI world, when you are this far along your journey, you have FU money. I estimate that to be about 15x your annual expenses but it can be a different amount to others. The point here is that that FU money gives you the freedom to say no to nonsense.

freedom

FI Goal Progress Tracker

If you’ve been following along, you might have noticed that every month we update the FI Goal progress bar on the side navigation.

freedom

In February, our Progress Tracker showed that our nest egg was up by 1 percent and that bumped us up to 67 percent overall. That bump was attributed to our incomes, since the stock market was down during that month.

The market came back roaring in March and while it’s nice that the market came back, it was our continuous effort to spend less on unnecessary junk and save and invest that also helped us along the way.

Desired Nest Egg Chart

Note: We only count income-producing assets as part of our net worth.

What makes up our nest egg

Our nest egg is comprised of mutual fund investments, short-term reserves and a real estate property. We have a proper asset allocation according to our goals and rebalance when needed.

Looking through the rear-view mirror

We’ve been married for over two years now and it’s interesting to look back and reflect on the progress we made. It wasn’t until May of 2012, when I purchased the book Your Money Or Your Life, that we started to think about what life could be if we have total financial control and the option to retire early from the rat race.

When we married, our combined nest egg was about 35 percent full. I had just finished paying off all my debt a few months earlier and got into savings full gear. We knew about financial independence and had our goals aligned. We became better and better at cutting expenses, as well as saving and investing our money by reading personal finance books. Our investments kept growing on the sidelines while we continued to live our lives and educate ourselves. Gradually, our knowledge on this topic went well beyond the stuff that you learn in school.

The chart below shows the quarterly results of the progress we made. For our non-financial readers, a quarter starts with the first three calendar months in the year. It’s a very important measurement used in the financial sector. For example, most mutual funds distribute dividends on a quarterly basis.

Desired Nest Egg

Our timeline

We’ve been documenting our FI journey via this blog for over a year now. It’s been a remarkable journey so far and we can’t wait to see what lies ahead. The table below shows the timeframe that it took us to get to this point, starting with a few months after we got married.

Portion of nest egg filled
Time it took to reach new level
Comments
40 – 50 percent6 monthsThe market was pulling a lot of the weight.
50 – 60 percent7 monthsThe market started to slow down a bit.
60 – 72 percent11 monthsThe market was a drag for the most part.

What lies ahead

If nothing drastically changes in our daily lives and the stock market doesn’t fall into recessionary levels (a drop of more than 20 percent), conservatively speaking, we can say that we can get to 100 percent in less than 30 months. That’s less than 3 years away! We are closer than ever to declaring financial independence and securing the funds to move abroad, but we’re not rushing to get there, as we try to make every moment of our lives count. We already eat healthy food by cooking most of our meals, travel often and spend quality time with friends and family. We continue to enjoy the present, plan our next getaway, and get inspired by the image below of what life will be like once we have filled the remaining 28 percent of our nest egg and decide to retire early. 🙂

freedom

What excites you about the prospects of a life without financial worries?

Note: This article has been updated to reflect the fact that the Freedom Fund has been redefined and its only purpose is to fund our living expenses. The percentages reflected in the charts here are of our entire net worth.

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Mr. Enchumbao

I work for a large investment management company helping people save for traditional retirement. During my spare time, I write about our FIRE journey here, at Enchumbao. My journey to FI began in 2012. I was in a lot of debt back then, but I turned things around and became debt free a few years later. My wife and I reached financial independence in 2017 and are preparing to retire soon.

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