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Today I will be sharing two articles with you.
After achieving financial independence, my friend RetireBy35 married his wife.
In his recent article on F.I.[R.E]He correctly stated that we must be able to:
- Achieve F.I. /[R.E]
- The speed with which you arrive.
- Continue to this phase.
All of this will depend on three major factors:
- Your partner in life
- Your accommodation
- Your transportation.
I do agree. I would advise to buy a property that is fully paid up before retiring. This will eliminate the possibility of rental income or the need to secure a large chunk of your income. Consider how much you would have to pay for a personal vehicle if you retired in 2003 and today (20 years later).
Both of these factors are significant.
No one knows this better than your partner.
RetireBy35 noticed that his girlfriend then exhibited more than flaws in four areas.
- Compatibility of values and aspirations
- Conflict resolution style
- Openness to experience
- Ability to adapt and learn
I thought that his list was important in this F.I.[R.E]Because the advice is given by general financial advisors and not from an F.I. perspective.
RetireBy35 has a better understanding of the two relationships, F.I. R.E.
I have heard from some that their spouses are not as interested in pursuing F.I.
They either don’t pursue it, most likely because their spouse is so unaligned in most of the four areas above or for some Like my friendF.I. He chose to pursue F.I.
Only a few thinkers who are dynamic can recognize that we could pursue F.I. even if we were less aligned. Imagine that you enjoy fishing, but your spouse does not. Would you still do it? Money is the only problem.
Be Open to Experiences Even Before You Reach F.I.
Take a look at F.I.[R.E.]As a difficult transition.
You must reach a certain level of wealth before you can officially declare that you are a F.I. status.
Singvestor is able to see past this and take advantage of the benefits of financial freedom before achieving the status. Even if we are not financially independent, we can still experience different ways of living and working if we have some wealth.
Singvestor chose to move to Europe to work at a startup. He chose the riskier route, taking a paycut and a compensation package which had more potential upside.
In his latest updates, he feels that working in a European start-up feels like a semi-retirement.
We can get a good idea of what he purchased and how much it cost.
Some readers can’t get past the idea that their goal is to cover their existing expenses. Singvestor understands that his spending can be flexible and that it is okay to reduce some of it.
From a Singaporean perspective, European countries like Germany, France, Spain… are rather cheap. I spent a lot of money on wants rather than needs.
In 2023 I spent about SGD 12k traveling around the continent. I also spent around SGD 7k for a car subscription, since I lived in the mountains for some time. I couldn’t resist the restaurants in Spain or France, and eating out cost me close to SGD 5,000 a year.
RetireBy35 has explained in his blog post that your life will change constantly and if you do not have a plan to deal with the mental and financial adjustment in F.I. then things won’t work out.
It is not enough to have money. You also need to be open-minded and able to think critically.
Some may find it challenging to interpret Singvestor’s F.I. chart. I personally find this to be the best way of tracking things.
We can either express our wealth as a lump-sum or a stream of income. Many people struggle to see their wealth in terms of a stream because they only see income from plans or securities that pay out. If you know the safe withdrawal rate you can use different percentages like 4%, 3.5% or 2.5% to get an idea of how much income you would have if retiring today.
This is Singvestor’s green line. When he began tracking this in 2019, his monthly income was closer to $1,000 and is now closer to $3,000 The yellow line represents his monthly income fluctuations while the blue shows a smoother income average.
This chart is great because it shows what you can afford and what you want to achieve. The chart shows the volatility in spending against the projected income, and also allows you to see the gap. The gap represents the work-income you might need if semi-retiring.
You might find it a bit OCD to track spending so religiously but I find that you cannot have a peace of mind if you don’t understand the nature of your spending.
Some less dynamic thinkers may look at that same graph and conclude that they would need to spend at minimum 20% or 30% more to be able retire. Or for some 100% more.
Singvestor understands that spending will be dynamic. He would prefer to have a better grasp of the lifestyle and costs associated with it, rather than just buffering.
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