Yeah, let's talk about money. I'll show some of ours and maybe we can decide if it's worth seeing more.
I'm ambivalent about reporting our net worth after FI, but I'm not sure whether the reader reaction is worth the revelation.
Which option do you think is better?
1. Listing net worth during our two-decade journey to FI.
2. Documenting all 40 years, including annual growth after FI-- even though the latter is just compounding.
I’d like to inspire and motivate: if my spouse and I can reach FI on a high savings rate, despite all of our stupid spending & investing mistakes, then anyone with the requisite persistence can do it.
After reaching FI, I think the biggest issue is acceleration of exponential growth. Everyone agonizes over the 4% SWR and worries about its failure rates-- but very few planners appreciate the upside of the >80% success rate. My spouse and I reached FI on our savings rate, sure, but since then our investment compounding has really taken off.
We declared our FI in late 1999 with a net worth of $1.5M at the peak of the bull market. I retired from active duty in June 2002 (while our net worth had melted down by 40%) but we were pretty sure that we’d survive the recession without seeking employment. In 2008-09 we again experienced peak-to-trough volatility (nearly 60%), but by then we understood the sequence-of-returns risk and a variable spending strategy.
In the years since our initial FI of "enough":
- I've earned my active-duty military pension,
- We've (finally) started cash-flowing our rental property,
- Our home equity has ballooned,
- We're starting to see a couple of tiny little green shoots from my angel investing, and
- In 2022 our annual income will nearly double when my spouse starts her Reserve pension. Meanwhile our spending has actually declined, especially adjusted for inflation.
None of that was evident in 1999. We took prudent risks with our investments, and a mere 17 years later those risks are turning into overnight successes. We’ll never experience sequence-of-returns risk again. Our net worth has grown from "more than we need" to "we're not spending it fast enough".
But all of those post-FI accomplishments just validate that the rich get richer, and they don’t have much to do with the journey to FI.
I joke that I can do math, but I think that humans suck at understanding exponential growth. In 1999, I would not have believed our 2016 numbers. I have nearly 40 years of net worth data on my spreadsheet yet I’m not sure that it would help anyone to show the annual graph past FI.
Any other thoughts? If I posted our annual numbers after FI, would you find that motivating or merely bragadocious?