I recently read a post of FourPillarFreedom about an alternative view to attaining FI and I thought that it completely corresponds with our plans as of now.
Followers of this blog would know that we had intended to reach FI and go off travelling in May 2019. Then the markets went Boo. Our numbers went Crack. Our plans went Crash. Then The Job came and we decided on One Year Later vs. One Year More.
Here we stand today, fully aware that our numbers do not support a full FI. Not in the the next 1 year, it won’t. The clock is ticking though, we want to travel and be with the young coconuts before Coco#1 starts school in 2021.
Enter the Miracle Solution.
Go ahead and travel. Come back post travels and get back into some form of work.
What happens to the Career? What if we need to take a major pay cut?
That is perfectly ok. As long as we generate enough income to supplement our Passive Income to cover our Expected Expenses and funnels a decent Savings Rate to build up the Investment Nest and eventually reach FI.
The Miracle Solution is the Perfect Blend.
In the words of Zach:
“…consider someone who spends $40k per year. Using the 4% rule, they could cover their yearly expenses with a portfolio worth $1 million.
But they could also cover their yearly expenses by withdrawing 4% of a portfolio worth $975k (which provides $39k in passive income) and by earning $1k per year through active income.
Or they could cover their yearly expenses by withdrawing 4% of a portfolio worth $875k (which provides $35k in passive income) and by earning $5k per year through active income.
Using this logic, each $1k you are willing to earn each year in active income is $25k you don’t need to accumulate in your portfolio.”
This is a Thought Exercise. It prompts you to examine your life with the tables turned and the pigs are flying. Can you actually live the life you want without being fully FI right this instant (but still be responsible)? Chime in!
To each his or her own.
Most importantly, one has to be comfortable with one’s own decision on the approach to FI.
Your approach certainly is feasible and is a balance between achieving FI soonest vs enjoying life in the present.
Gambatte!