OurNextLife.com // Our 2016 Q3 Financial Update, on track to retire early in 2017!gearing up

The Magic Is Real // 2016 Q3 Update

We hinted at it a few weeks ago, but we’ll just go ahead and make it official:

We are way ahead of schedule on our savings plan!

If you read our Q1 and Q2 updates, and you know from living in the world that the stock markets haven’t crashed or corrected lately, then this is probably not too surprising. But it continues to surprise us!

We’ve reached this surreal place where our finances no longer seem like ours. Everything is so automated, and with all the investments earning compound interest these days, we just sit back and watch these numbers get bigger and bigger. It’s crazy. It certainly doesn’t feel like something we did. We’ve just tried to stop spending on things that don’t make us happier, which doesn’t feel like the same thing as saving up a big chunk of change that will sustain us for decades.

It feels like magic.

Of course, if you are one of the lucky global rich who has money leftover to save each month, then you can have this magic too. Just keep saving and investing, and let time do its thing. (Bonus points if you remember to be grateful that you’re in that fortunate position, because not everyone is, and because gratitude is good for your health.)

The story of the 2016 has been setting bigger goals, upping our savings game and benefiting from market tailwinds (which we know could reverse themselves at any time), in addition to continuing to be in the amazing position of earning incomes well above average. (Thank you, lucky stars.) While we’ve been planning for almost two years now to retire at the end of 2017, we’re now entertaining the possibility of quitting sooner than that, depending a lot on how this year’s bonuses shake out. (To be continued in December…)

Let’s get to the updates!

OurNextLife.com // Our 2016 Q3 Financial Update // We're on track to retire early in 2017... maybe even a few months sooner than we thought!

The Big Picture

As always, we’re sharing percentages and charts but not the real numbers (here’s why). As of the end of the third quarter of the year, here’s where our net worth stands currently:

OurNextLife.com // 2016 Q3 Financial Update, On the Way to Early Retirement Next Year!

While we’re now in our prime income earning years and would expect to see that line get steeper each year, we’ve already hit a net worth increase in 2016 that would be acceptable for the full year… and we’re only three-quarters of the way through it, and haven’t yet gotten our deferred compensation, which we shorthand as “bonus.”

That net worth number is made up of our investable assets (taxable and tax-deferred/401(k) accounts) and our equity in property (home plus rental property). But we haven’t adjusted upward the supposed value on our properties in more than a year, because we’re not interested in inflating our net worth on paper. We do count the equity because paying off our house is a meaningful metric for us (that will equal 100% equity), and paying off the rental will mean we get more cash flow from it.

And here are the breakouts of those components, showing some fun progress since the end of Q2:

OurNextLife.com // 2016 Q3 Financial Update, On the Way to Early Retirement Next Year!

Here’s what all of those numbers represent in our two-part retirement plan:

OurNextLife.com // 2016 Q3 Financial Update, On the Way to Early Retirement Next Year!

The Details

We’ll start with the easiest one first: our mortgage balance. We’re paying our rental property mortgage on schedule since that interest will continue to be a tax write-off after we’re retired (when mortgage interest on our home will no longer be deductible because we’ll switch to standard deduction). But we’re making fast progress on our primary residence mortgage, just about five years into it, and we plan to pay it off before we quit next year:

OurNextLife.com // 2016 Q3 Financial Update, On the Way to Early Retirement Next Year!

Next up, our “real” retirement funds, comprised mainly of our 401(k)s and a tiny IRA. This is the money that will support us from age 59 1/2 onward, and which we don’t plan to convert to Roth earlier unless we absolutely must.

Last year, we crossed the number that we think will provide all we need in our 60+ years, even after roughly doubling our annual spending compared to our early retirement years. But we’re still maxing out our 401(k)s because we can, and because we’re happy to have the tax deductions. (We totally believe in taxes, so don’t generally try to get out of them. This is the only tax-avoidance strategy we practice, because it’s it’s indisputably in the country’s best economic interest for us to be self sufficient in retirement. And because, no matter how pro-tax you are, in the higher brackets they just hurt.)

OurNextLife.com // Our 2016 Q3 Financial Update, on track to retire early in 2017!

So far we’re at 114 percent of what we think we need to have a comfortable “real” retirement, and we’re still contributing through the end of the year. We should each get one more 401(k) employer match before we retire, as well as have all or most of next year to contribute, so this number could go to 125-130 percent of what we need, in which case we might rethink our plan not to convert some to Roth. Stay tuned…

Now let’s get into the good stuff: our taxable accounts. Since we got serious about retiring early, we’ve worked hard to build up our taxable savings, because those are most of what will sustain us in early retirement, especially for the first 12 years of it, when we’ll have minimal rental cash flow. (After the rental is paid off in 2029, that should pay roughly half of our expenses.) This is just how serious we’ve been about saving in our taxable investment accounts:

OurNextLife.com // Our 2016 Q3 Financial Update, on track to retire early in 2017!

That’s a screengrab from Vanguard, where most of our taxable money lives. Notice that near-zero balance at the end of 2013? Yeah, that’s how recently we wised up. But we’ve been busy since then. And here’s how much of that is what we’ve contributed versus the comparably tiny gains:

OurNextLife.com // Our 2016 Q3 Financial Update, on track to retire early in 2017!

The gains are growing pretty quickly now, and given how young these investments still are, we aren’t surprised to see that ratio. Our 401(k)s look a lot different, but we’ve been investing in those a whole lot longer. With time, the ratio of investments to market gains will shift in our favor. (By the way, is it weird to anyone else how comfortable I sound with all this market stuff? After being notoriously risk-averse and preferring to keep my money FDIC-insured? Personal growth is possible, friends!)

Here’s a historical look at our total taxable funds, including cash, showing some big growth already in 2016, with a lot of earnings still yet to come. This line should still get a lot steeper before the year ends:

OurNextLife.com // Our 2016 Q3 Financial Update, on track to retire early in 2017!

Here’s a more zoomed-in look, showing strong and consistent growth based on our focused contributions, with a few dips for down market months:

OurNextLife.com // Our 2016 Q3 Financial Update, on track to retire early in 2017!

My company is currently a little slow on expense reimbursements for work travel, so I had to dip into the “life happens” fund in September to pay my credit card bills. That has September’s number looking a little flat compared to August. Once I get reimbursed, I’ll pay us back, and October should look a lot better.

The Best Updates

I love looking at charts as much as the next finance nerd, but all the rest of this update has been boring compared to these last two charts. In the two most recent quarterly updates, we shared that we were trending ahead of schedule. But it’s now official: we’ve already passed the number we were hoping to save in the entire year, and we still have a quarter plus bonuses to go!

OurNextLife.com // Our 2016 Q3 Financial Update, on track to retire early in 2017!

This means several things:

  1. We could sustain a 10 percent market correction and still hit our total targets for the year (assuming bonuses are roughly in the range we anticipate).
  2. We are now solidly aiming at our previous “super optimistic stretch goal” number, instead of our “only slightly optimistic but most likely doable” number.
  3. We could possibly quit a little earlier than end of 2017. Stay tuned!

And the final chart shows that we’re not just whistling Dixie:

OurNextLife.com // Our 2016 Q3 Financial Update, on track to retire early in 2017!

We’ve already saved as much in three quarters of 2016 as we need to save in the whole rest of our working careers to hit our middle-of-the-road number. Of course, we’re aiming at that bigger number now, but given that we have five quarters and two bonuses left to go (or even if it’s only three or four quarters plus prorated bonuses…), this all feels super possible.

Can You Feel the Magic?

We’ve been planning for and blogging about early retirement for a while now, but it’s always felt a bit unreal, like any far-off thing seems until you’re actually there. But sometime in this past quarter, when we realized just how fast of progress we’re making and how little we have left to go, it actually because real. And that’s when the  magic kicked in. Because even though there are plenty of early retirement blogs, and there are news stories about people who’ve retired in their 30s or 40s, in a big picture sense, WHO DOES THIS?!?!

It’s a super tiny fraction of people who manage to pull off an early exit from work, and all of a sudden we realized, We’re really going to do this. It isn’t just some nice dream we’re going to talk about for a while. We’re really going to walk away from awesome careers with excessive salaries next year. We’re really going to get to do whatever the heck we want to do every day. It feels like the letter from Hogwarts just arrived, and in an instant we knew that magic is real, when before we’d only hoped it was.

Our Q4 To Do List:

Our real moment of reckoning will come close to year-end when we know our net total for the year and can make some decisions about whether we’ll work all the way through 2017 or not. But in the meantime, we have a few things on our to do list:

  1. Redo our projections to make sure we’re comfortable with our numbers, even if market returns get lower over time (we’ve always been conservative in our estimates, so this is really just for added peace of mind)
  2. Decide how much of our year-end bonuses to keep in cash (we currently have one year of expenses in cash, but want to retire with two years or slightly more)
  3. Figure out what the heck we’re going to say at our year-end reviews when those long-term conversations happen. We don’t want to tip our hands about our plans, but we also don’t want to overpromise, especially to those who’ve gone to bat for us over the years.
  4. Get as many ski days in as we can! Resorts open next month. Yeehaw!

Now Let’s Chat!

Whew! We got through the full update! Now we’d love to hear from you guys. How was your third quarter? Anyone hit any milestones you’d like to share? We’d love to give you a big virtual high five! Any non-financial highlights we can help you celebrate? Any other info you’d like us to share in future updates? Or just want to recount a hilarious story from your weekend? Whatever it is, you know we’d love to hear from you in the comments. ;-)

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106 replies »

  1. Congrats on reaching your goals early! It must feel amazing. Looking forward to the big decision on pulling in the date.

    My son’s varsity football team had a triple OT victory over an undefeated team this weekend. That was pretty sweet. :)

    • Brian and I share our sons’ senior football seasons – such a nice virtual friend! Mine caught his first pass and ran it in for a 33 yard touchdown on Senior Day!

      I love reading posts like this and looking at all of your charts. We do NONE of this…. life is so different when you have pensions! We do a net worth “check-up” once a year – usually on a random snowy night :) We know where the money is – just sitting there doing it’s “thing”.

      We’ve had a CRAZY expensive month with rental properties and home. School taxes, insurance – everything due all at once…. followed by all 3 cars needing repair this week to the tune of $4500….. that’s the post of this week, if I can get time to write it!

      • Congrats to your son on his football prowess! :::high five!:::

        I can imagine life must be so different with pensions! You know we’re all jealous of you, right? ;-) But I can’t tell you how thankful we are that our renter has a pension, so we never have to worry about money being there for the rent… so we still benefit in a different way. Good luck recovering from an expensive month!

    • Thanks, Brian! Now we’re just counting down to the final BIG goal. Crazy! Congrats to your son and his team for their big victory! I’m sure that felt awesome to win it after that many OTs!

  2. What a huge, great, detailed update. You guys are so close to FI, I can almost smell it on your behalf.

    To be so far already in 2016, that is truly awesome, well done guys. To have contributed so much of the balance that you’ve built up is impressive considering how little it has grown for you. I’m assuming you’re ready if there’s a big crash with your balances?


    • Thanks, Tristan! It feels so amazing to be so close. And while we definitely wouldn’t be happy about a crash, we’d still be fine. We’re well diversified, and our retirement spending plan is flexible enough to shrink by about half and still let us be fine. So while we might not be super stoked to quit in a recession, we’ll be okay… that’s the benefit of a very conservative plan!

  3. What a great quarter. You have really killed it with the taxable accounts in just 3 years. I’m so looking forward to your first post as an officially retired person! We met our debt payoff goal in the last quarter, so that was exciting for us.

  4. Great quarter and year to date! The charts look awesome and that magic is working in your favor

    The end of year conversations with your employer should be interesting, Do you think if they knew your plans they would cut ties earlier or make plays to keep you?

    We had a great Q3, all the numbers going the right direction and are obviously excited about the baby coming in March!

    • Thanks AE! :-) We’ve always assumed that our employers would cut us loose pretty quickly if they found out our plans, which is why we go to such a high level of secrecy here. It’s possibly overkill and unnecessary (maybe they’d actually let us stay as long or short as we want), but we don’t want to risk it because the penalty would be so high.

      Congrats on a great quarter in your house, and of course on your exciting baby news! So thrilled for you guys! :-)

  5. Congrats on another great quarter with taxable, home equity and more. Interesting to see the plans for cash to have in hand to ride out any major market downturn. We still are not sure what is needed with the income floor we have as a foundation. I suspect it is 2-3 years but 3 may be overboard even for the conservative house of PIE.

    Our Q3 was great financially and our taxable account continues to march higher with our monthly plan as well as buying some international index funds on a dip.

    Non financial, I registered for FinCon at discounted rate so will be scouring all available 2016 trip reports for tips, do’s and dont’s. Look forward to meeting you there! Mrs. PIE will be manning the troops at home and is bummed she can’t make it. I am reading that staying at the conference hotel is the best way to go. Is that correct from your experience?

    Q4 will bring the usual market drama in an election year. More clarity with the plans for UK post Brexit adds more noise to the already loud blustering going on this side of the pond. Like you guys, our 2016 has gone beyond our expectations so que sera, sera….

    • Thanks! We’ve concluded the same thing re: cash: three years is overkill. If a big crash hits, we’ll cut our spending drastically as an automatic step, and burn through the cash more slowly, so two years at regular spending levels should be fine. Glad you guys had a great quarter as well! And look forward to meeting you in person next year at FinCon! I was really glad to stay on-site and will most likely plan to do the same next year, but it’s all about personal preferences. Do at least stay within walking distance so you aren’t having to deal with transit and/or parking and feeling like you can’t go back to your own lodging during the day… the days are extremely long, but every second is worth it. ;-)

  6. Looks great! Keep up the good work. I’ll want a text the day ‘The Talk’ happens.

    PS I want to go skiing so bad. I didn’t go at all last year :(

  7. totally giddy reading this – I am entering the territory of ‘omg this is happening’ when things start to actually move in autopilot even though we just started really focusing on this… for us the greatest thing has been the expenses, creating those habits is REALLY helping. We are almost at our stretch goal for the year (but of course a correction would take us back to ‘regular’ goal) which feels incredible. We are far from FIRE still, but seeing progress by sticking to a measurable plan and DEFINITELY reading blogs like yours keep us going.

    And I also have loved that I told a few people about my general goals of ‘buying my life back’ as being my bucket list item #1….I thought it went in deaf ears when a few people have come back to me and subtly started asking more when they realized how serious I was and, while not telling them amounts, I tell them % save after taxes of income and they are floored because they see me still really enjoying life.

    I am rooting for a before March 2017 retirement for you…. taking bets? ;)

    • Haha — I don’t think we foresee any scenario where March 2017 happens, so that bet would have some awfully long odds. ;-) What an awesome situation for you guys to be in for your stretch goal to be in reach, and for your regular goal to be the fallback position. Hooray!!! Keep going… I bet you’ll reach your goal faster than you think. :-) (This was our “ten year plan” after all, and it will really be more like five or six when we’re done.)

      How cool that you’re having a positive influence on your friends — we’ve found the same thing, that people often come back later with more questions. :-)

  8. Congrats on the great quarter and on hitting your goals early! I am really excited to read along with your final year. Your posts are always so thoughtful that I am sure there will be some great life transition stories and insight coming along!

  9. Wow, congrats! What a big accomplishment to hit your goals early on! That takes work and discipline. When did you start this overall goal for wealth, 2008? Sorry, I am new to your site. What were your biggest struggles early on and how do these struggles differ from the ones you come across now?

    • Thank you! To answer your Qs, we’ve been good at saving since the mid-2000s, but got VERY focused on early retirement in late 2012, and then really ramped it up in late 2013. I actually wouldn’t say that we’ve had big struggles except that we’ve often felt like we “should” be saving more (read: all of our money) instead of spending on things that make us happy today. But we’ve since made peace with that balance and believe in still traveling and enjoying life en route to early retirement. So now the struggle is just dealing with the impatience of wanting to be there already! ;-)

  10. And imagine how much money you’d have if you work “Just One More Year”. Or another five? Or 10? Hehe, kidding, of course!

    I LOVE reading posts like this. The magic of saving huge amounts of money is very, very real. These posts prove that early retirement is possible when you set your mind to reach a financial goal and stick to it.

    Yes, big incomes help speed up the process, but “early retirement” is a much more broad concept than just “retiring in your 30s”. Calling it quits in your 40s and 50s is early retirement, too.

    Like you guys, we are way ahead of schedule as well. And honestly, I’ve found *most* people wind up with more money than they had anticipated when they first started to plan. It’s because little financial achievements along the way propel you forward. Motivation strengthens and a lot of those splurge items – that you thought you might buy at the beginning – turn into wasteful spending. And, we realize this BEFORE we fork out the money to buy it.

    It’s the snowball of early retirement. Not only does our net worth build, but that invisible but ever-so-powerful force within us builds as well. And through the power of the stock market and just basic freaking money management skills, not only is early retirement possible, but it begins to feel natural…as if it’s the most obvious choice of action at this point in the game.

    Keep fightin’ the good fight, and we’ll see ya out there on the road!

    • Oooh, good idea! We’ll just work another year! Hahahaha.

      And so true — it IS magic. Hooray for you guys being ahead of schedule, too! I also think that most people will end up finishing faster than they anticipate because, as you said, you get more and more motivated to save money instead of spending it, and because I think a lot of us underestimate how much market gains will boost our progress.

  11. Congratz on reaching your 2016 numbers already now! Job well done.

    Enjoy the ski.

    Funny fact: our oldest just got her first allowance. She is saving for a gym outfit.

  12. Woohoo! I feel like I finally can take a big ol’ swig of the investing Kool Aid. Our timing prior to this quarter left us seeing red, red, and more red. Hanging out in the green for some time has been really awesome. I’m so excited for you guys!

    • Oh dude, it’s Koolaid time! (Maybe you were just seeing red from the Koolaid? Hahaha.) And you have to look at those numbers less… said by someone who used to look obsessively. ;-) All that matters is that you’re buying shares that will grow over time, not what your balance is on any given day.

  13. Congratulation for reaching your milestone!

    Here we changed a bit the game plan. Since I quit earlier this year to enjoy the summer with Mini-RR. (Hey, having some money aside gives you some latitude!) I am about to restart working from home, but the year has been good on investment returns as well. And since I was super efficient at saving last year, and Ms Riche Relax is back at work, we are still on track for early retirement. Maybe a little bit delayed, but not by much.

    The big change is we decided to move to a 4-days week. So far it is awesome. And it feels like the beginning of the end (of full-time work). It is a bit of a trade off, but once again, we like having a bit of flexibility on how we do things :)

    Good luck with the rest of the year!

    • Thanks! The evolution of your plan sounds great, especially getting a bit of a break in the middle. If we’d ever thought that was feasible for us, we’d have done it, too. But now we’re close, and so we’ll stay the course. And your 4-day work week sounds WONDERFUL. Congrats on making that happen! I hope you keep feeling that magical momentum build. :-)

  14. Awesome, awesome, awesome. It’s amazing how little of your savings is from pre-2013. Just goes to show how quickly this can be done with high incomes and a lot of focus. Way to go!

    • Thanks, pal! We still saved money prior to 2013, but it was more of the FDIC-insured variety. ;-) But absolutely right — this can be done shockingly quickly with a high income and low spending!

      • Hey, love all your charts and data.

        One quick request for a smidgen more data without giving real numbers away.

        Can you clarify if your Y-axes start at zero and are continuous? If so, it makes it an even more impressive story!

      • Good question! The answer to both Qs is YES, everything starts at zero and is continuous. :-) (Though, for example, some that show the scale, like our tax-deferred accounts, don’t start from a zero year. But in those cases it’s clear.)

  15. Yippee!! I’m also ahead of plan for the quarter and my net worth grew in spite of $0 income this quarter-Whew! We plan to convert our traditional IRA’s over to Roth while staying just under the Obamacare cliff. This will reduce our required distributions and decrease the likelihood that our Social Security will be taxable. Us old fogies have to think about SS since Mr. Ms. Liz will be eligible in just a few years though he probably won’t collect for 10 years when he turns 70. On a personal note, we celebrated our fake grandson’s first birthday yesterday–and his parent’s survival of the hardest year!

    • Congrats on a great quarter! Your approach to Roth conversion makes tons of sense, and we may do a *little* of that in low earning years so long as we stay under the Obamacare limit we’re eyeing. The required distributions point is a good one, and one we may face a few years down the road! And happy birthday to your fake grandson!!! :-)

  16. Great job! Your last few years look amazing! It’s really great that you hit your goal 3 months early. The only thing I’d suggest is to make a plan for a big stock market crash. What would you do if the market decline by 40%? It’s not fun, but you should think about it a bit. The last 8 years has been really good and I think a lot of people aren’t ready for a big crash.

    • Thanks, Joe! And great point — it’s important for everyone to plan for stock market crashes, because they are inevitable. We have built into our retirement plan the ability to cut our spending by 50% — not that we WANT to do that, but we CAN. And obviously a 50% crash would be unprecedented, so we’re hoping that future recessions are more in the 20% range, which will still allow us to be comfortable. By aiming for the bigger goal, we’ll only need to earn like 4% on our money in 18 years… less than 1% a year over inflation. So we’re already SUPER conservative in our planning. :-)

  17. Congratulations on reaching your goals! It’s my daughters second birthday today so reflecting on the last 2 years:)

  18. Hey does that mean you can buy us booze and food at FinCon17? :D

    Kidding aside, looks like magic indeed with these nice looking charts. Very impressive that you’re already over the target goal for tax deferred. Totally awesome! We had a pretty decent Q3, net worth is up again (yea!).

    • If there wasn’t so much free drinking at FinCon, I would definitely say we can buy a round. ;-) Congrats on the great Q3 on your end too! We know the market will correct at some point, but it’s fun watching things go up in the meantime. Haha.

  19. Fantastic!!! Very well done!
    We keep stashing away, no milestone at the moment but happy that we have not had to lower our rental’s rent amount (as some others in the same building had to) thanks to a great property manager, so I’ll take that as a victory :) for now…

  20. YAY for such a solid update! I can’t wait to hear what you decide after your bonuses! I also can’t wait to feeling that “We’re actually going to do this” feeling! We’ve gotten hints of it lately, but never very solidly. :)

    • Thanks, M!! I know… I want this year to be over so we can find out what our bonuses are, make some more concrete plans and start looking a bit farther ahead! And it’s interesting to think that the “it’s really real” feeling is only now kicking in, after making great progress for years. But now it finally feels like even the markets can’t really derail us — we could still make it work even with a big loss of share price. While we don’t WANT that to happen, realizing that we’d be okay if it did is for sure part of what’s making it feel real. :-)

  21. The two years of expenses in cash is an interesting topic for me. I’m a firm believer in the emergency fund. I imagine when i retire i will have a few years of expenses in cash with maybe several more years of expenses in bonds. I just read this weekend about someone who wanted close to 10 years of cash expenses which to me seems very high. In my mind, money in bonds funds is a potential middle ground between the ultra conservative cash and stock market. Do you have a portion invested in bonds.

    • We definitely have a chunk invested in bonds. We’ve always been pretty conservative investors… Or at least I have. ;-) But we’re actually starting to explore keeping less in bonds since we have a long time for the money to grow. But the cash cushion is definitely something we believe wholeheartedly in maintaining. And agree with you –- an emergency fund is still important in retirement. Though, it can probably be lower than while working, since losing a job is no longer a major threat to your well-being.

  22. Congratulations on getting to FIRE faster than expected! I actually smiled when I finished reading your paragraph about “Who does this?!” that only the 1% would be able to do. You guys are part of that 1%! Hard work and a little bit of discipline sure pays off :) I hope to get there someday, and this post was inspiration that with the right mindset, anyone can do it!

    • We’re not quite to FIRE yet, but it’s actually within reach now! :-) And yeah, it feels amazing to be in the lucky few. We aren’t under the illusion that anyone can do this, but there sure are lots of folks who could if they knew the math and had the focus.

  23. Wait, do you not get a 401k match in every paycheck? Do they wait and contribute the entire match at the end of the year or something?

    Congrats on exciting progress! It does sound pretty magical. :)

    • We each get our matches in one chunk at different times of the year. And the timing is always approximate, and somehow seems to come when the market is at some big high. Haha. And yeah, it feels seriously magical — that is not hyperbole!

  24. The growth you’ve achieved over a relatively short period of time is pretty unbelievable! I love your charts and graphs. I’m not naturally creative in that way, despite being an arts major. lmao.

    Congrats on another solid month!

    • For real — we have trouble believing it, too! Or at least that’s how it seems now… for sure there were times when it felt like we were making slooooooow progress. ;-)

  25. Congrats on hitting your goals. You’re right it does feel like magic. September was a good example. We didn’t think we would have a good month since the market was flat, but it still turned out fine thanks to compounding interest. Great charts and keep on rolling.

  26. Way to go! Thoroughly enjoyed reading this post. Very inspiring in a “if they can do it so can we” kind of way. Last year we paid off all our consumer debt and this year we will hit a 40% savings rate, next year the goal is 50%. It still seems impossibly ridiculous to me that we can save THAT much and still live awesomely 😁

    • So glad you enjoyed it! Congrats on paying off your debt… And then hitting such a big savings rate! I definitely know what you mean about it seeming impossibly ridiculous, but we are all proving that it’s true! Keep up the awesome work! :-)

  27. This is awesome. I can’t wait to see when you guys say goodbye to corporate for good. We had a good quarter overall. September was a high-spending month due to our Colorado trip but since we front-loaded our 401(k)s, we saved our share for the month. We’ve been tracking our FI number monthly and are now at 91%. We’re also ahead of schedule (July 2017 target) but who knows what the market has in store!

  28. Congrats, Mr & Mrs ONL! That’s freakin’ awesome! Our Q3 was pretty good. We got an unexpected windfall from my parents generously deciding to share a portion of an inheritance with my siblings and I. It wasn’t life-altering money, but it shaved 3 months of our retirement calendar, which felt pretty great. And I still had a little sum left over to set aside for the canoe that my husband’s always wanted and start that side-gig I’ve been thinking about it. No excuses now. If it doesn’t work out – nothing lost. If it does work out, even on a small scale, I can keep shaving extra months off the retirement calendar… :) Here’s hoping!

    P.S. I think if you decide to jump ship before December 2017, you should just subtly change your “… Months to Go” calendar on the blog and see how long it takes us all to catch on. :)

    • Thank you!! And how awesome for you guys that you got that early inheritance to shorten your FIRE timeline! It’s extra great that it’s giving you guys the latitude to pursue some of your dreams, like the canoe and side hustle. Yay for that!

      And I love your idea about announcing it on the DL that way. ;-) I suspect that we’ll shift from a date-driven out to a number-drive end date, so it will be a tiny bit hard to predict in advance. But I still think your idea is genius. :-)

  29. I got goose bumps reading this. It must be such an incredible feeling knowing that you are so close. I am unfortunately a couple of years behind you but am eagerly counting down the days until I reach FIRE. Congrats!!!

    • Wow, thanks! It is an incredible feeling, truly. And I know it’s hard to wait it out (we’ve been there! and are still there!), but the time will pass faster than you think. :-)

  30. Congrats on getting so clsoe to your goal and maybe contemplating a “one less year” scenario. :) Even if it’s jsut a wee bit sooner than December 2017.

    It’s crazy when your investments get big enough that contributing changes less than the compounding growth of them. That was nice to see for us. We’re still debating how to diversify to still be ok when the market corrects/crashes/goes down in flames after November… Like you pointed out bonds are still almost negative when you add in inflation, and not a realistic investment for us, so then what to do to diversify? Ahhh, first world problems.

    We realized that barring a spectacular crash, we’re still ont rack for me to quit in 2018, but then comes the question of what to do with the mortgage. Since we’ll be leaving shortly after that, most likely, we don’t really want to pay it off, so maybe just plan for a way to cover that or god forbid, enact the “one more year” scenario, gah!!!

    We’ll see, but congrats again on the smooth sailing for you guys!

    • I don’t see any scenario in which we can shave off a whole year, but dare to dream! ;-) The diversification question is a tough one, and to be honest, I think about it less than I should because my answer just tends to be, “Eh, we’ll wait it out.” What lets me sleep at night is knowing that I have almost a million United miles and our post-retirement budget could shrink by almost half without us feeling like we have to scramble. Plus we’re gradually accepting that SOME amount of part-time work in retirement will be good, and that will be an additional form of diversification of sorts. The mortgage Q for you guys is another good one — if it was me, I wouldn’t pay extra, knowing that you’ll be selling soonish. Blog post topic??

  31. I froze for a minute when you mentioned taking the standard deduction and not using your personal residence for mortgage interest, etc since we are paying off our rental property first before our home mortgage.

    I thought it through for a second and realized that very likely our home residence still acts as a rental property and also possible that this could be sold and those funds moved to a taxable account of stocks/index funds.

    Ahead of the game for sure so congrats. I’m excited to wrap up this year with our financial goals so very close and make a move very similar to your “wake up and smell the coffee” investment move from 2013-present day. Hope all is well in ONL land.

    • I think the tax question is highly influenced by the size of your loans and your interest rates — if the deduction on your rental would be tiny, and you have ample depreciation to throw in there, then maybe it’s not a big deal. In our case, it’s a no-brainer, but details matter. And thanks! Feels both exciting and surreal to be where we are — and, not gonna lie, FinCon for sure made me more impatient to hurry up and retire and unmask ourselves (no more scary terrorist pictures!). Hahaha. Hi to Mrs ESM!

  32. That’s great you are way ahead on your plans!

    Do you think about it as a little more wiggle room just in case you need it? Or does that mean you can take a big trip in your early retirement years you weren’t already considering?

    • Thanks, Brian! Depending on the day or the hour, we see it differently. ;-) Right now I really want to quit sooner (Mr. ONL is the cooler head on this and wants to stick it out and build up a bigger cushion), but other times we think about building up a little extra that we could use in a number of ways: RV fund, home renovation fund, higher budget each year, etc. We’ll know more at year-end, but then I’m sure our vision will continue to evolve.

  33. I am glad that you find taxes important. I love roads and education.

    So much of the world is magic if you look at it through the right prism. My “achievement” this week was the look of pride my girlfriend had as I told her more about how my business is doing. The business is roughly as old as our relationship (a good woman’s love can make you believe amazing things) and I am finally starting to feel like I’m doing a good job at it.

    • :-) It’s been the best choice for us, but we’re thankful that others (like you!) share! Helps a lot of us think stuff through in a different way than we can just conceptually.