At what milestone did you feel secure?

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Francis42
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At what milestone did you feel secure?

Post by Francis42 »

I would like to get some perspective from forum on this topic. I'm in a pretty good financial spot for my age (32). High salary, 1 year of expenses in an emergency fund, I have a ~$115k in retirement accounts and ~$220k in a taxable account. If all goes to plan, I'll invest about $80k in 2021. I've got a bit more work to in rebalancing and adjusting my asset allocation. With all that said, I still don't feel quite "secure;" I'm impatient for more. I think what I want is the feeling of being able to walk away from any job that I'm in.

I'm curious to hear from those that are further along the path. At what financial milestones did you feel secure and set (i.e. emergency fund established, debt paid off, portfolio paying for basic expenses, hitting retirement targets etc.)?
jarjarM
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Re: At what milestone did you feel secure?

Post by jarjarM »

>30x so more or less fully confident in FI and work is optional. You'll get there soon enough :sharebeer
checkyourmath
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Re: At what milestone did you feel secure?

Post by checkyourmath »

10x income is a good milestone until then it is save, save, and save some more! I think impatience is at an all time high while trading volume trends lower.
Jack FFR1846
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Re: At what milestone did you feel secure?

Post by Jack FFR1846 »

I'm actually just coming into it myself.

$62k annual spending.
House paid off long ago.
5 paid off cars.
Both kids likely done with college and both working.
$3.1MM in investments (I see it as $3MM locked in). 50/50 AA
Coming up on $100k in efund/savings/checking.
DW and I both working full time.
We're talking about calling it quits when Covid is over.
I'm 63.
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TomatoTomahto
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Re: At what milestone did you feel secure?

Post by TomatoTomahto »

checkyourmath wrote: Wed Dec 02, 2020 5:45 pm 10x income is a good milestone until then it is save, save, and save some more! I think impatience is at an all time high while trading volume trends lower.
With respect, any income based milestone is silly*. It should be based on a multiple of residual expenses.

*why silly? Because it leads to the silly statement “I was doing fine, but then I got a raise and I’ve fallen behind again.”
I get the FI part but not the RE part of FIRE.
vas
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Re: At what milestone did you feel secure?

Post by vas »

$10,000. Working at my first job out of college, I set a goal of $10K and tracked it every month. Once I hit that I was golden. Free to switch jobs, move across the country at the drop of a hat, whatever. I've hit a few milestones since and in some circles might seem successful but nothing has given me the feeling of power and freedom like that first $10K.
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retired@50
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Re: At what milestone did you feel secure?

Post by retired@50 »

Francis42 wrote: Wed Dec 02, 2020 5:38 pm I think what I want is the feeling of being able to walk away from any job that I'm in.

I'm curious to hear from those that are further along the path. At what financial milestones did you feel secure and set (i.e. emergency fund established, debt paid off, portfolio paying for basic expenses, hitting retirement targets etc.)?
I think the ability to walk away from a job is related to your taxable account balance + emergency fund. When this amount can fund several years of expenses, then walking away from a job that you don't like is possible. However, that is different than walking away from work altogether. You've still got some years to work, but that doesn't mean that you need to continue in a job you dislike.

I never worked for any company for more than 5 years or so, but my high savings rate allowed me to leave a job without necessarily having another job lined up. Some may feel that this is dangerous, and depending on your family responsibilities, it could be. If I had a mortgage or children I'd have felt differently.

Eventually, after decades of saving at a high rate, I realized when my current job ended, I wouldn't be searching for a new job. For me, I reached this point when I had 40x my annual living expenses in my portfolio.

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PhoebeCoco
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Re: At what milestone did you feel secure?

Post by PhoebeCoco »

I agree that the earlier milestones are more meaningful. Once I had $5000 in my bank account, I realized I could live for at least 3 months on that (this was in 1996) and I would always be able to get a job within 3 months. Secure.
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MrBobcat
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Re: At what milestone did you feel secure?

Post by MrBobcat »

Probably when I tip over or when I hit 30x, whichever comes first.
Flashes1
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Re: At what milestone did you feel secure?

Post by Flashes1 »

I don't think you can feel totally secure if you depend on someone else (i.e. your employer) for money. However, there are degrees of security, and if I'm talking to a person under 30 years old, I'd say having 2 years of living expenses (in after tax money) saved should make you feel secure that you're not going hungry in the short term.
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Re: At what milestone did you feel secure?

Post by sperry8 »

jarjarM wrote: Wed Dec 02, 2020 5:42 pm >30x so more or less fully confident in FI and work is optional. You'll get there soon enough :sharebeer
That's about the milestone where I started to feel secure as well. It was my original # when I began to chase FIRE. And it interestingly held true when I achieved it (sometimes the goal posts move).
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runner3081
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Re: At what milestone did you feel secure?

Post by runner3081 »

Honestly, not sure I ever will. I guess maybe at some crazy number like 5+ million investments/cash would do it. Otherwise, we don't know what life will throw at us.

More importantly, feeling secure is also about being and feeling healthy.

Right now our cash/investments are a significant factor higher than expenses, but those expenses are low due to fantastic health benefits. If that job goes, expenses shoot up due to healthcare.
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InvestorHowie
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Re: At what milestone did you feel secure?

Post by InvestorHowie »

Jack FFR1846 wrote: Wed Dec 02, 2020 5:48 pm I'm actually just coming into it myself.

$62k annual spending.
House paid off long ago.
5 paid off cars.
Both kids likely done with college and both working.
$3.1MM in investments (I see it as $3MM locked in). 50/50 AA
Coming up on $100k in efund/savings/checking.
DW and I both working full time.
We're talking about calling it quits when Covid is over.
I'm 63.
Nice work! I think you've both earned your freedom. Inspiring.
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angelescrest
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Re: At what milestone did you feel secure?

Post by angelescrest »

I feel secure with myself, my job, and my financial circumstances. I’m far from being financially independent, but I am really good at what I do. I have invested in other skills that make me in demand, and make me feel good about what I can offer. I’m respected by coworkers and know that if my organization went south I would have other opportunities. I am not counting until the days I retire, as I enjoy what I do.

We have a nice affordable home well within our means, my kids are at a good school, and we have a solid emergency fund. We paid off all our debt except the mortgage about 7 years ago, recently increased our life insurance, and have both the plan and savings for how we will pay for college. We have been saving little by little for a pretty long time, and now we are finally at a point where even if we contributed minimally to retirement (say $1000 a month), I know we would have a 95% probability (by historical terms) of having a reasonable retirement at the normal retirement age.

I’m about mid career, and have arrived at the above state in the last couple years. This satisfied my goals of providing for my family and for our retirement. Arriving at financial independence would be nice, but I don’t feel like I must retire early. In summary, all those factors played into arriving at a place where we feel secure, though the hunger to save more will remain for a long time. Could something bad happen, or things change? Sure, but I don’t worry about that.

Edit: after reading other posts, I thought I would add that the feeling of security changes or matures over time. It’s not static. I also resonate with the moment I paid off all my student loans, which happened in one literal day with one major bank transfer (I convinced my employer I deserved it), which was about the same year that we bought and moved into a great affordable home that could have been our forever home. A few years later my spouse, who had a hard time getting a job, was able to finish her grad program and started a new career. That sequence of moments in our lives was a different kind of financial security than what I describe above, but equally meaningful. Contrast that with my first full time job, it paid so poorly that I realized I could never save much despite being frugal and never get ahead. What a terrible feeling—I empathize with those who struggle with being stuck in low income positions.
Last edited by angelescrest on Wed Dec 02, 2020 6:19 pm, edited 3 times in total.
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Re: At what milestone did you feel secure?

Post by angelescrest »

vas wrote: Wed Dec 02, 2020 5:52 pm $10,000. Working at my first job out of college, I set a goal of $10K and tracked it every month. Once I hit that I was golden. Free to switch jobs, move across the country at the drop of a hat, whatever. I've hit a few milestones since and in some circles might seem successful but nothing has given me the feeling of power and freedom like that first $10K.
Love this, thanks for sharing. :sharebeer
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InvestorHowie
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Re: At what milestone did you feel secure?

Post by InvestorHowie »

Hitting two commas in my NW was a beautiful milestone. I marked it on the calendar -- and remarked it as dips temporarily took me below and back above that mark until it stayed there. 25 to 30x expenses inside of a decade has become visible on the horizon and that makes it simple to stay the course until then. I enjoy my work but do look forward to when it will be 'optional'.
Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas. --Paul Samuelson
Normchad
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Re: At what milestone did you feel secure?

Post by Normchad »

I felt secure when I was 28. At that time I was earning about $50K per year and finally got to a net worth of zero.

Reaching zero was a huge mental milestone for me.

I had a house then, and part of why I felt secure was that I knew if I lost my job, my wife and I could still get by with 2 full time, minimum wage jobs. That never happened, but it felt very secure knowing we didn’t need much to survive.
novemberrain
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Re: At what milestone did you feel secure?

Post by novemberrain »

When I was at my first job a decade+ or so back, my first financial milestone was $20k and I felt rich when I hit it.

Feeling secure enough to retire would require me to have at least 33x annual expenses. And more if I wanted to retire young
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climber2020
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Re: At what milestone did you feel secure?

Post by climber2020 »

Francis42 wrote: Wed Dec 02, 2020 5:38 pm At what financial milestones did you feel secure and set
When I hit around 30x my bare bones expenses. I don't want a bare bones retirement so I'm still working for the time being, but it's nice to know that I could still have a comfortable life if I quit my job today.
prairieman
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Re: At what milestone did you feel secure?

Post by prairieman »

I felt secure finally at about 45 when I had a paid off house and a niche job that I felt I was good at and that seemed it would never go away. It was all meat and potatoes (saving and investing) until retirement after that.
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thehundt
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Re: At what milestone did you feel secure?

Post by thehundt »

I felt super secure in my 20s with low cost of living and maxing out retirement accounts. Now in my early 40s with a much bigger nut I feel less secure because I have a family with young kids which is crazy expensive in the US. I have balanced increased assets with increased responsibilities... such is life. I think 30x yearly expenses is a nice goal.

I am curious of the people responding with taxable or after tax account value. Does this mean you have maxed all tax advantaged accounts and grown your after tax accounts to that size?
Flashes1
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Re: At what milestone did you feel secure?

Post by Flashes1 »

After tax money is easy to access to pay the bills should one lose their job. You can access 401k money in a pinch, but it's a little more painful.

I don't feel in control if I have to depend on someone else to give me money that I need to pay my bills, but having a paid-off house (with management property taxes) would admittedly provide a nice level of security.
veindoc
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Re: At what milestone did you feel secure?

Post by veindoc »

TomatoTomahto wrote: Wed Dec 02, 2020 5:49 pm
checkyourmath wrote: Wed Dec 02, 2020 5:45 pm 10x income is a good milestone until then it is save, save, and save some more! I think impatience is at an all time high while trading volume trends lower.
With respect, any income based milestone is silly*. It should be based on a multiple of residual expenses.

*why silly? Because it leads to the silly statement “I was doing fine, but then I got a raise and I’ve fallen behind again.”
I think this is true. We have a sizable nest egg but am annoyed that our expenses are what they are. If we could get our spending down I would feel more secure.
Highfeehater
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Re: At what milestone did you feel secure?

Post by Highfeehater »

Although financial situations are always subject to change, just this morning my wife and I used a calculator to determine if our finances would last 30 years from now. We calculated withdrawals at 3% of our investments which is more than we spend annually now. The calculator showed it would be 99% probability that our finances would last 30 years. We have 40x our annual spending.

I am 67, my wife is 66 and we will not be tapping into our retirement accounts until we are required to. I have been retired 2 years and my DW is semi-retired pulling in about 20k at something she loves to do. Our AA is 50/50 plus 3 yrs of cash. I also do Roth conversions annually.

This morning we looked at each other and said we can feel financially secure and sleep well at night! The greater points though, already mentioned by a previous poster, of just being and being healthy and staying healthy are even more important. Enjoy your ride, follow the basics and stay the course.

BTW-It has been this forum and the Bogleheads advice that has helped us get to where we are. Thank you!
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Re: At what milestone did you feel secure?

Post by Boatguy »

For me (and likely others), the goalposts seemed to keep moving. At first, it was “when I get to that first million”...but that didn’t make me feel any more secure. It seemed like there was still such a long road ahead with so many known and unknown future expenses. Now, both kids are through college and on their own, the mortgage is paid off, and I see that the end is near — in a good way. I’m 67 and still working at a Fortune 100 company in a job that I really enjoy, and my wife will turn 65 in February. While I could have comfortably “afforded” to retire several years ago, the security of knowing that we’ll both be able to go on Medicare whenever I decide to retire is what really put my mind at ease. I know that still working at this age is not for everyone, so I consider myself extremely lucky to be in a position to do just that of my own volition.
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Re: At what milestone did you feel secure?

Post by H-Town »

Francis42 wrote: Wed Dec 02, 2020 5:38 pm I would like to get some perspective from forum on this topic. I'm in a pretty good financial spot for my age (32). High salary, 1 year of expenses in an emergency fund, I have a ~$115k in retirement accounts and ~$220k in a taxable account. If all goes to plan, I'll invest about $80k in 2021. I've got a bit more work to in rebalancing and adjusting my asset allocation. With all that said, I still don't feel quite "secure;" I'm impatient for more. I think what I want is the feeling of being able to walk away from any job that I'm in.

I'm curious to hear from those that are further along the path. At what financial milestones did you feel secure and set (i.e. emergency fund established, debt paid off, portfolio paying for basic expenses, hitting retirement targets etc.)?
For me, financial milestones don't give me secure feeling. It doesn't feel difference now when I have $2+ mil at 33 versus when I had pretty much nothing working 3 different jobs in college.

So it depends on how you can define feeling secure. For me, as long as I live below my means, I'm good.
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Watty
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Re: At what milestone did you feel secure?

Post by Watty »

Francis42 wrote: Wed Dec 02, 2020 5:38 pm I'm curious to hear from those that are further along the path. At what financial milestones did you feel secure and set (i.e. emergency fund established, debt paid off, portfolio paying for basic expenses, hitting retirement targets etc.)?
During the 2008 financial crisis I was in my 50s and everyone, including myself, was concerned about getting laid off especially since virtually no companies were hiring.

My son was in high school then and few high school students could find jobs at places like fast food restaurants because laid off adults who could not find any other work were taking those jobs.

It also was not clear just how bad things would get and there was a very real concern that it could spiral out of control and go into a full fledged depression.

Even if you lived through it, it is easy for forget just how grim things felt then.

I started thinking about contingency plans in case things went to the proveriable "hell in a handbasket"which seemed like a real possibility.

I had thought of several levels of fallback plans and somewhere way down the list was that I realized that I could move across country to an pleasant inexpensive midwest college town that I knew, buy a duplex for cash, rent the other half to help cover expenses and do OK in a very frugal sort of way. I would have a roof over my head and my basic needs would be covered. That was not very good by US standards but it would be relatively comfortable if there was a depression going on. It helped that I have travelled enough that I could appreciate how much better that would be than most people in the less developed parts of the world live.

That is not how I would want to retire but when I realized that I did not need to worry about being broke and homeless I found that surprisingly comforting.

From that point on it was more about getting to point where I could have a retirement with a better standard of living.
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Re: At what milestone did you feel secure?

Post by TheNightsToCome »

TomatoTomahto wrote: Wed Dec 02, 2020 5:49 pm
checkyourmath wrote: Wed Dec 02, 2020 5:45 pm 10x income is a good milestone until then it is save, save, and save some more! I think impatience is at an all time high while trading volume trends lower.
With respect, any income based milestone is silly*. It should be based on a multiple of residual expenses.

*why silly? Because it leads to the silly statement “I was doing fine, but then I got a raise and I’ve fallen behind again.”
+1
ge1
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Re: At what milestone did you feel secure?

Post by ge1 »

We recently exceeded 5m in investable assets with house paid off (late 40s), that made me realize we are fine. No intention in giving up work and we have a fairly expensive life style, but if needed we could easily spend less and we would be fine. I was never worried about our financial situation as we had good savings and high earnings, but for the first time I actually feel “secure” now.
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Re: At what milestone did you feel secure?

Post by MathIsMyWayr »

TomatoTomahto wrote: Wed Dec 02, 2020 5:49 pm
checkyourmath wrote: Wed Dec 02, 2020 5:45 pm 10x income is a good milestone until then it is save, save, and save some more! I think impatience is at an all time high while trading volume trends lower.
With respect, any income based milestone is silly*. It should be based on a multiple of residual expenses.

*why silly? Because it leads to the silly statement “I was doing fine, but then I got a raise and I’ve fallen behind again.”
Having savings of 25x expenses makes me feel secure? No, if I pick up an expensive taste. 50x? No, if I develop a gambling habit. :wink:
Wanderingwheelz
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Re: At what milestone did you feel secure?

Post by Wanderingwheelz »

Before my mom died nearly 25 years ago (way, WAY too young), she gave me a book that I cherish. Not that long after she died I hit the “real world”, graduating college. Starting in my first job I got the same feeling about my future, feeling insecure. What I did was take a crisp $100 bill and I stashed it in the pages of the book my mom gave me, figuring as long as it goes unspent, I’m in okay shape.

It’s still there. So I guess I’m secure.
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Re: At what milestone did you feel secure?

Post by TomatoTomahto »

Wanderingwheelz wrote: Wed Dec 02, 2020 9:10 pm Before my mom died nearly 25 years ago (way, WAY too young), she gave me a book that I cherish. Not that long after she died I hit the “real world”, graduating college. Starting in my first job I got the same feeling about my future, feeling insecure. What I did was take a crisp $100 bill and I stashed it in the pages of the book my mom gave me, figuring as long as it goes unspent, I’m in okay shape.

It’s still there. So I guess I’m secure.
What a wonderful way to treat a gift and $100. Good on ya.
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i<3Investing
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Re: At what milestone did you feel secure?

Post by i<3Investing »

There was something about hitting 100k in taxable accounts that felt really good. Retirement accounts have always felt off limits and taxable feels like I could access it if i absolutely had to. All in all that's about 12 months of expenses if i really hunkered down so maybe it's the safety net and not the amount that matters?
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Re: At what milestone did you feel secure?

Post by Sandtrap »

Realize that at any age and any amount of assets and milestones, it can all go away in a heartbeat. . . or. . .. financial concerns can be dwarfed by other matters and events in life.

Feeling "secure" can instill confidence or over confidence, inspiration to strive for bigger and better milestones, or complacency.
Thus. . .actionably. . . strive harder and higher to make up for the speed bumps, detours, and crashes along the way to FI in retirement and beyond.

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MoonOrb
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Re: At what milestone did you feel secure?

Post by MoonOrb »

I'm not feeling it yet and I'm at about 15x anticipated expenditures, age 45. Like many others here have said, I expect to feel secure around 30x. I do, though, feel "on track."

It's hard for me to feel secure because at age 45 with a 15x portfolio, it's not possible to pick up sticks and not work again. As the portfolio gets to 20x and above I might feel differently as the anticipated expenditures figure is generous and I could get by, if needed, spending significantly less each year. At the lower bound of what might be a reasonable expenditure figure, I'm at about 21.5x. Another way of thinking about this is that once that "lower bound" figure gets up above 30x maybe I'll feel secure then. Time will tell. For now I just keep investing.
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Re: At what milestone did you feel secure?

Post by gator15 »

I can only think of one milestone thus far which allowed me some freedom at the time. In my late 20’s, I had a goal of reaching $100k. Doing so, would allow me to leave my job, take a year sabbatical and travel the world. I met that milestone, left my job, and traveled a little. Didn’t travel as much as I wanted because 2008 happened and lost a decent amount of money like most. The next milestone which will make me feel secure is a paid off mortgage. A paid off home opens up a world of opportunities. Hoping to get there in the next 5-7 years.
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Re: At what milestone did you feel secure?

Post by forkhorn »

For me, a major one was feeling like I had a job that would be stable, would pay the bills and then some, and that I could (relatively) happily do until I'm old.

As far as number milestones, I don't think there is one where you suddenly feel "set". It's a spectrum based on multiple of daily expenses saved. I think it's logarithmic with about a base of 2. 1 days worth of expenses is zero security. Literal hand to mouth. 2 days= 1 level of security. Every doubling is one more level. 50 years of expenses is about level 14. But most people always think "if I only had about twice the money..." regardless of where they are; hence the base 2.

I keep myself from feeling *too* set by allowing expenses to increase as long as years of expenses saved looks likely to keep growing and stays up above 25 or so. Allowing this to happen was a milestone for me, and maybe when I started feeling pretty secure. It is also, I think, one of the ways I justify continuing to work.
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Re: At what milestone did you feel secure?

Post by EnjoyIt »

I have had a few levels of security:

At one point in our life I realized we had enough saved up so that we can probably never worry about food or shelter in our current home. We saved 25x our yearly spending for the basic necessities with some inexpensive entertainment in our current house. From that day on, I new we will be fine.

We saved up 25x expenses which is about twice as much as our basic expenses above. From that point I knew that I will never have to work unless I want to. Work is actually more enjoyable making it easy to exceed 25x and as our portfolio grows we are more comfortable having a few extra splurges.
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Johm221122
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Re: At what milestone did you feel secure?

Post by Johm221122 »

At 10× yearly expenses
Knowing I could go 10 years without any income and could keep up my standard of living made me feel extremely secure.
stereotaxis
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Re: At what milestone did you feel secure?

Post by stereotaxis »

When I got my first paycheck as an attending physician after I got all my board certifications completed.

Once this milestone happened (net worth at that time - minus $100k), I thought to myself "I don't know how many years it will take but I'm going to be okay."
Hastur
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Re: At what milestone did you feel secure?

Post by Hastur »

When I started my current job back in august 2018, I didn't have enough money to pay next month's rent. By the end of that year I was able to save 10-12k, felt more or less secured and started investing.
bdaniel58
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Re: At what milestone did you feel secure?

Post by bdaniel58 »

Paid off the house last year. Huge weight was lifted from my shoulders. Plan to retire next year.
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wander
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Re: At what milestone did you feel secure?

Post by wander »

I felt secure when I first got the job out of college. It was nice that someone hired me for what I learned. I have never lost a job since. I always feel secure in life even when I didn't have much.
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Re: At what milestone did you feel secure?

Post by Chicken Little »

InvestorHowie wrote: Wed Dec 02, 2020 6:04 pm
Jack FFR1846 wrote: Wed Dec 02, 2020 5:48 pm I'm actually just coming into it myself.

$62k annual spending.
House paid off long ago.
5 paid off cars.
Both kids likely done with college and both working.
$3.1MM in investments (I see it as $3MM locked in). 50/50 AA
Coming up on $100k in efund/savings/checking.
DW and I both working full time.
We're talking about calling it quits when Covid is over.
I'm 63.
Nice work! I think you've both earned your freedom. Inspiring.
+1

That's really pretty, especially the 50/50.

I might print that out and hang it on the wall for motivation.
awval999
Posts: 1254
Joined: Fri Apr 08, 2011 10:17 pm

Re: At what milestone did you feel secure?

Post by awval999 »

Great thread.
Lately, almost every day when I go to bed, our family is the richest we have ever been, but it doesn't feel like it.
I think a lot of is the stress of being a one-income family and our family growing from 3 to 4, and of course the stress of the year 2020.
Turning 35 next month, but I think it will likely take another decade before feeling secure.
invest4
Posts: 307
Joined: Wed Apr 24, 2019 2:19 am

Re: At what milestone did you feel secure?

Post by invest4 »

thehundt wrote: Wed Dec 02, 2020 6:48 pm Now in my early 40s with a much bigger nut I feel less secure because I have a family with young kids which is crazy expensive in the US. I have balanced increased assets with increased responsibilities... such is life. I think 30x yearly expenses is a nice goal.

This. I'm a few years further ahead with older children (2 currently in college and 2 more still to come). During this time, I have a sense of being less sure footed financially due the the uncertainty of these years in regard to expenses (not just college, but all the expenses for our children as they transition to responsible adults). As a result, projecting future expenses for retirement also seems very fuzzy at this point. Nonetheless, life marches on and I keep working toward the original goal of 2.5M (25x of what I thought would be solid for retirement).
Chicken Little
Posts: 470
Joined: Fri Feb 22, 2019 5:03 am

Re: At what milestone did you feel secure?

Post by Chicken Little »

InvestorHowie wrote: Wed Dec 02, 2020 6:12 pm Hitting two commas in my NW was a beautiful milestone. I marked it on the calendar -- and remarked it as dips temporarily took me below and back above that mark until it stayed there.
We're solidly over two comma with home paid off in early 50's. Home was a fixer-upper, and not expensive, so while nice to have paid off, it doesn't really add much to security. A little house light, if anything.

I really haven't run numbers in detail, just head down for now. Should pass two comma strictly in retirement accounts before long if all goes well. I doubt that will trip any sensors for well being. My guess is when I run the numbers and see a clear path to Medicare that is easily affordable, I'll exhale.
lostdog
Posts: 3798
Joined: Thu Feb 04, 2016 2:15 pm

Re: At what milestone did you feel secure?

Post by lostdog »

30x expenses/vacations/fun.

We're at 31x.

A 1 year fund in cash.
Olemiss540
Posts: 1630
Joined: Fri Aug 18, 2017 8:46 pm

Re: At what milestone did you feel secure?

Post by Olemiss540 »

TomatoTomahto wrote: Wed Dec 02, 2020 5:49 pm
checkyourmath wrote: Wed Dec 02, 2020 5:45 pm 10x income is a good milestone until then it is save, save, and save some more! I think impatience is at an all time high while trading volume trends lower.
With respect, any income based milestone is silly*. It should be based on a multiple of residual expenses.

*why silly? Because it leads to the silly statement “I was doing fine, but then I got a raise and I’ve fallen behind again.”
With respect, when the goal is how it makes someone "feel", I don't think any individual's system or response can be deemed silly. When it comes to financial independence you are correct but the OP's question seemed more emotional based that financial based....
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.
dcabler
Posts: 1756
Joined: Wed Feb 19, 2014 11:30 am

Re: At what milestone did you feel secure?

Post by dcabler »

I always felt somewhat secure, but more so once I learned enough to look beyond rules of thumb like 25X expenses and built a more complete model in a spreadsheet that
- Monitors all of our investments
- Has inputs from another spreadsheet to estimate taxes
- Calculates the NPV of future income streams like SS (including possible SS haircuts)
- Uses concepts similar to the ones in this thread to calculate an annual withdrawal as if I were retiring today: viewtopic.php?p=5633807#p5633807
- Stress tests for a 50% stock loss and shows we'll still be OK
- Includes a pseudo-TIPs + Ibond ladder that starts at age 70 that, along with SS, would meet our absolute minimum living requirements for about 15 years.

I'm 1's of years away from retirement and feel pretty good about where we are. We've always felt good about where we are, but life has a way of throwing curveballs and doing your best to prepare for them is key, in my opinion. We did all of the "right" and "normal" things from the beginning. Saved a lot, bought a house, got married, had a kid, kept skills up, got promoted, etc. DW left the workforce when kiddo was born, so that put a pretty big dent in the amount we saved. Then in my 40's I got layed off for the first time. But since most companies where I've worked always have a "tell", I saw it coming and already had an interview for the next job lined up. And honestly, it was a relief because it was such a bad environment. A couple of months off, a decent severance, and I was back at work. Changed companies a couple of times, then it happened again in my early 50's. Again, saw it coming and again, I had the next gig lined up. Incredible severance, enough to noticeably shorten the number of years I need to work. Next gig only lasted about 8 months because company was in financial trouble. Shut down our office but they liked me and wanted me to move to their main office in an HCOL area. I passed & no severance to speak of. This one was a little problematic as it happened in an overall downturn for my industry and took me about 10 months to find my next job. Our emergency fund got us through financially but I was seriously considering changing careers when the next job finally showed up. Was there for 3 years until our local office was shut down. Again, there was a "tell" for almost a full year before they shut us down and by the time it happened, I had the offer in hand for my current position where I've been for about 3.5 years. As I have since the beginning, I continue to max out the 401K, I max out our HSA, I participate fully in ESPP and put any gains into our taxable investment account, same with RSU's, and same with bonuses. Only question now is when do I exit the merry-go-round.

Cheers...
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