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The Safe Path

Recently there was a pretty big change in my life: I moved in with my significant other!

With the change has come a plethora of adjustments we’ve both had to make as we get settled into this new phase of our lives. One of the biggest I’ve noticed, is now thinking in terms of “we” or “us” instead of “me”.

When grocery shopping or making dinners, it’s how much food do we need? Is there enough for leftovers for lunch the next day? (well not my lunch as detailed here, but still).

For planning out weekends or vacations, it’s not just my schedule I need to account for anymore, I need to make sure we’re both on the same page and synced up.

I also can’t just put things wherever I want now in the apartment. It’s our apartment and I need to take into account my partner’s preferences and desires as well.

While these have been some of the day to day things I’ve noticed, there’s also been a change to how I see my plans long term. Instead of thinking of a solo path, we can now plan out how we see our lives together in the long term. It’s positively delightful!

I’m extremely lucky that my partner is also into Financial Independence and was on her own journey prior to meeting me. It makes planning the financial aspects of the present and future extremely easy!

When thinking of the future, and more specifically, the path to Financial Independence, there are so many different potential paths one could take. This ranges across the spectrum from working at your job long enough to build a sizeable cushion into your plan (“Fat FIRE”), to working until you hit your FI number (“Regular FIRE”), all the way down to quitting your job early and working part time to cover your expenses (“Barista FIRE”), thus giving you more freedom in the immediate term (even though it would likely cause you to work for a longer period).

I used to think of these futures just for myself, but now it’s been interesting to discuss our shared vision of the future, and where Financial Independence fits into that. After many discussions of the topic, at the moment we’re grappling with two separate paths: The “Safe Path” and “Slow FI”.

The Safe Path

In my day job I work as a Financial Analyst (well, manager now I guess) for a Fortune 500 company. A lot of my job responsibilities revolve around strategic planning and forecasting out various program metrics and financials which eventually make their way out to Wall Street, ultimately driving the stock price.

Simply put, that was a fancy way of saying that I deal with a lot of Microsoft Excel modeling. Naturally, as I do this on a daily basis, I couldn’t help but create a model for my own path to FI. I’ve had this for the past few years, which I update monthly along with my Net Worth, and it’s been amazing to see how events such as raises or lowering my expenses have naturally moved my projected FI date earlier and earlier.

Based on my current projected annual expenses (~$30K) and the following variables, I’d reach FI in roughly 7-8 years… how crazy is that!

All my assumptions for inputs to the model. Forecasting a modest 4% nominal return rate with 2% “inflation” to my annual expenses. Bank interest rates at the current Ally interest rate of 1.9%
Other inputs to calculate where all the money from my paycheck goes, and how much leftover I’ll have to invest! Employer contributions to 401k and HSA at the bottom. Hoping to cut my budget slightly next year!
Where I currently stand and when the model says I’ll hit my FI number. Currently projected to be the end of 2027, roughly eight years from now! In this model I assume that 90% of the “leftover” money from previous picture will be invested in my Brokerage account, and 10% will stay in Cash.

Whew that’s a lot of numbers! In many ways this model is fairly conservative (only 3% raises and assumes I never get another promotion, I stay in a very HCOL area, 4% returns going forward, etc) meaning there is a chance this timeline could also be accelerated.

My partner and I don’t share finances, though that hasn’t stopped me from creating a similar model bringing our combined numbers into the fold! I won’t share those numbers here, as her finances are not mine to share, but based on the math we’re looking at a similar timeline of 7-8 years, factoring in higher annual expenses for both of us (thus a higher FI number) and a wider range pending what exact annual expense number we shoot for.

Essentially, this is what we consider as our “Safe Path”. We put our heads down and do full time work for the next 7-8 years until we reach our Financial Independence number and then choose to do whatever we want! That would put us both in the 35-36 age range, which is pretty awesome, right!?

I don’t exactly bank on this model: there are so many unknowns about the future when it comes to returns, what area we live in (and thus our expenses), potential investments outside the market, etc, but I think it provides a good basis as to what our financial future could potentially look like.

By adjusting certain variables (like spending), it shows that increasing our current annual spending by a thousand or two won’t really change too much about this future FI date. This helps to put things in perspective and allows us to avoid feeling stressed about some of the day to day spending we incur.

This “Safe Path” sounds pretty ideal on the surface (7-8 more years is not much in the grand scheme of things!), but when you dig down into it there are some things about it that don’t sound as idyllic for us.

Being tied to a full time job and that schedule is one of them. In addition, there are so many things we want to do and see before our mid 30s which may not be possible using the limited vacation time provided by our jobs. I could also see potential burnout occurring by then as my job requires long hours and a long commute (at the moment).

In essence, while the “Safe Path” seems like a logical and sensible plan, it may not be the one for us. What other option do we have? Enter “Slow FI”.

Slow FI

If you’re curious as to what Slow FI is, it essentially is the act of intentionally slowing down your FI journey so you can have a more ideal lifestyle throughout the journey. This means instead of grinding it out and working straight up until you are FI, you take actions to better your life now, at the potential sacrifice of a little longer journey to FI .

This could mean taking a pay cut to work part time, finding something to do that only covers your living expenses while letting your investments grow in the background, or any number of other scenarios.

The Fioneers have an excellent interview series depicting several people who are doing just that, and it’s super inspiring!

The reason “Slow FI” appeals to us is that it gives us a lot more flexibility to do the things we want to do at a much earlier time, than having to wait all the way until we hit our FI number. Instead of working those 7-8 years, perhaps we could work full time for 2-3 more years, at which point we switch to part time work to give us a lot more freedom to pursue the things we want to do.

Sure our FI date would move back several years potentially (depending on how much we cut back), but we would have so much more time to live our ideal lives at a much earlier age. In addition, we would probably get to spend a lot more time together instead of 60+ hours a week we’re apart either in the office or commuting (something we’ve both noted that is a bummer, despite now moving in together).

After 2-3 more years, our investments would be at a point where as long as we could cover our expenses with our part-time and/or remote work, we could avoid drawing down from our portfolio and let compounding returns work its magic in the background.

In addition, neither of us have plans to fully retire and do nothing once we hit our FI number. I’ve realized that having too much unstructured time probably isn’t good for me. The extra time that part time work gives us could be used to explore what else we would like to do once fully financially independent, including discovering the potential for any small businesses we may like to start that could generate further income.

In general, this set up sounds like a pretty ideal fit. Working only part time would give me a whole lot more energy to focus on my health and hobbies as well as any other side hustles. Finding the right fit with a company for part time work could be a challenge, but if we can figure that out, this may just be the right move for us.

Which To Choose?

Luckily we don’t have to make any decisions on this in the near future. We’ve both agreed we’d feel more comfortable pursuing “Slow FI” when we have a lot more investment dollars stocked away (see what I did there 😉 ) which means we’re looking at working full time for a minimum of 2-3 more years.

Slow FI doesn’t come without its risks. By prolonging the journey we could be opening ourselves up to a longer timeline of things that could go awry.

But the “Safe Path” also has its risks. This path could lead to burnout and a less optimal physical/mental well being from all those hours spent in front of a computer or commuting. It also relies on us being able to keep our full time jobs, which in the event of a recession could potentially prove difficult. While I like to think my job is fairly recession proof, all it takes is a prolonged rough economy and a round of layoffs to be sent packing.

So who knows which path we will take. Having the ability to be flexible in life and along this journey to financial independence is essential. Who knows, in 2-3 more years our lives could be completely different from where we are now and we could be choosing from two completely different paths from the ones we’re thinking of now. Life has a funny way of getting in the way of even the best laid plans.

In the meantime, we’re both going to go on living our lives and enjoying it the best we can. Though we may not have reached our ideal life yet, that doesn’t mean we can’t tweak things to make it better for both of us in here and now!

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15 thoughts to “The Safe Path”

  1. The one thing I need to share with you is children. They are very expensive. My son is currently 5. Have you factored that into your plan? Maybe kids are not in your plan, and I dad not realize how much he costs, daycare medical diapers(when he needed them) etc.

    Other than that, I have to say congratulations on both your life change and your continued progress.

    1. Appreciate it! Kids are factored in. Not into my individual calculations specifically (as I don’t think I would have a kid on my own), but in our combined one. We’re factoring in a higher estimated annual costs than we would for just ourselves, specifically for if we choose to have kids. Despite that we’re still looking at a 7-8 year timeframe which is pretty awesome!

  2. I love this. Congratulations on moving in together, and woohoo for options in your shared financial future! I hadn’t considered the term “Slow FI” before, but as I come up on my 28th birthday, I’m starting to see the merit there. How lucky that we found FIRE early and could grind our early years, build up a sustaining growth machine (even a small one) early, and then find the opportunity to slow down a bit on the path towards FI and actually enjoy life.

    I hope that you and your partner absolutely THRIVE together. Congratulations to you both!

    1. Thank you so much! I think I saw you recently moved in with your s/o as well so congratulations to yourself! (Been meaning you comment but things have been hectic!) 🙂

      It is such an amazing and privileged position to be in to even think about being able to do something such as Slow FI, or even financial independence really. To be able to live life on your own terms is something so few people get to truly enjoy. I feel so fortunate to have found this movement!

  3. It’s definitely interesting how a change like this gives you a new perspective.

    That spreadsheet is great, I think I’ll have to make something similar! One very minor thing I did notice is you didn’t account for any IRS-approved increases in retirement plan contribution limits. While we don’t know until a few months before a new year begins, I’d imagine over the next 7-8 years you’ll see some increases in those limits. But it’s good to be conservative in planning anyway, so it probably doesn’t matter much to your final numbers, if at all.

    For me, I think I prefer to work until I build up a big enough cushion. I guess that would be traditional FI, or “fat FI” as you put it. I don’t forsee a partner in my future, at least in the near-mid term (although I guess that can always change haha), so I’m looking at this from the mindset of myself only.

    1. Yea that’s a good point on the increases to 401k and HSA contributions in the future. It doesn’t make a huge difference to the overall numbers, so I figured it best to be conservative and adjust as necessary!

      Fair enough though! Nothing wrong with that and having that extra security blanket has got to make you feel good that your plan will all work out!

  4. There are days where I want to be a financial analyst. After reading your post, today is one of them. I would love to get paid doing number crunching. For now, I’ll have to be happy as an engineer.

    I’m fairly new to your blog, so I may not know your early retirement plan yet, but I was wondering one thing. A little more than 60% of your FI number is tied up in your retirement accounts or other places where you can’t use them, such as the HSA. That only leaves less than $300k to get you through age 59 and a half. So I’m wondering what the plan is for that early retirement phase?

    In any case, congratulations! Getting their in your 30’s will be quiet the accomplishment.

    1. Yea I really don’t mind it as a profession! If I could get rid of the things I dislike (ie. have to work certain hours, commute, long hours, etc) I could see myself doing this for much longer.

      Thanks so much! The plan for now (if no side/part time income to help bridge the gap) is to do a Roth conversion ladder. Thus the roughly $300k only really needs to last me 5 years before I can tap into some of those retirement accounts penalty free! In addition, as I wouldn’t have much income, I’d be paying minuscule tax rates on those Roth conversions which is pretty sweet!

  5. We did the slow path to FI and don’t regret it. We stayed in NYC (and still are here) which is a very high cost of living state b/c extended family was here, and that was a tradeoff we were willing to make. We also felt the cultural upbringing for our daughters was 100% worth it. We spent money on travel, gym memberships and specialty classes, professional training and other business-related expenses not necessarily related to our day jobs, and these investments pay off now that we’re in our late 40’s and still in relatively good health and with interesting business projects that enable us to enjoy a FIRE lifestyle but still do something meaningful. I LOVE that you’re considering a slow FI path — just recognize that it doesn’t have to be slow. We got serious after 40 and got there in 7 years with some tweaks, so I would think of it as balanced (rather than slow) FI.

    1. That’s awesome! NYC is definitely a tough place to FI to given the high costs! But it’s certainly seems that the trade offs are worth it in your case.

      That’s a great point though! I really do think there are things out there that can give me the lifestyle I’m looking for giving me that more balanced approach to FI. We’ll see what the future holds!

  6. Both are good. You probably won’t stop working completely after FI anyway so they’re not that different. If you can find something you like to do part-time, that’s the way to go.

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