I Reached Financial Independence!

Although I took a mini retirement for 3 months this summer and lived in Spain, I still managed to obtain financial independence (FI) soon after. Financial independence is when you have enough money and investments saved up that can cover your expenses for the remainder of your life without having to work. You can calculate what your financial independence number is by multiplying your yearly expenses by 25. For example, if you spend $40,000 per year and multiply that by 25, you would get $1,000,000. That means you would need to have $1,000,000 in savings and investments to use to live off of for the rest of your life. 

Reaching my financial independence number was just like any other day. I didn’t feel different. That’s why it’s important to focus on the journey instead of the destination. I make sure that the way I am living my life currently is how I would want to be living even if I was financially free. It’s also significant to notate that I took 3 months off for my mini retirement and still reached my goals. This was due to compound interest and the power of real estate. My 3 months off with no income did not impact my financial independence goals. I was hoping to reach my number by 35 years old but I reached it early at 33.  

When I first found out about the FIRE movement I was excited to retire as soon as possible. Then realism set in and I realized I do value my career and profession. I still wanted to reach financial independence because I believe that should be everyone’s goal. You never know when you may become disabled and no longer able to work or want to take an extended amount of time off to be there for a loved one. Now that I have reached FI I think my next goal will be to reach Fat FIRE. 

Fat FIRE is when you budget for $100,000 worth of yearly expenses. This means your FIRE number would have to be $2.5 million. I don’t think I would need that much, but it’s always nice to have an extra cushion. At the same time, I will be cutting back on how much I work. I mentioned in previous posts that I want to work only 6 months total out of the year. I will continue to save and invest but not as aggressively. I will rely on the power of compound interest over a few years to get me to that fat FI number. Once you reach that million-dollar mark, it’s incredible how quickly your money compounds. 

In the meantime, I am work optional. I will continue doing locum tenens and working 3 months at a time. I plan to continue doing mini retirements as a I had a good experience in Europe and transitioning back to work was easier than I expected. My focus is also to spend more and save less. I am content with my life and level of spending. But I would like to spend more on treating other people and start a donor advised fund where I can increase my contribution to charities.