Retire early? Is it only a dream?

While watching the rain from our hotel room a year ago, I had a crazy idea: retire early so more time can be spent enjoying the rain from different parts of the world.

The wife and I had mused about it before, but it was more a joke than a serious consideration. Up until then, the idea never materialized. “Yeah, wouldn’t it be nice?” we would tell ourselves. We would spend a few moments romanticizing the notion. Then it would be shelved until the next time the thought came up again.

This time was different. “Why not?” I asked her. We stared at each other. Then something clicked. We decided right then to research the possibility and put forth a plan.

Putting the Dream on Paper

First, we needed to understand where we stood financially. Then, we needed to forecast the required savings for a comfortable retirement.

After downloading several spreadsheets from various blogs (I can’t remember which ones), we generated our own, taking into account the different methods used.

It takes our current spending and projects how much we would need to save. That number is compared against our current savings, and a simple projection of when we can retire can be made. That is the simple gist of it.

I am not going to spend much more time talking about the spreadsheet (we can cover that another time).

It has been exactly one year since we started keeping monthly records of our progress. I want to share this with you each month and provide some thoughts on the update: stuff like what helped, what did not help, and lessons learned.

To keep things confidential and generic, I will be using percentages and averages instead of actual numbers. Think of it as an investment portfolio, which tends to look at percent losses/gains to gauge performance.


The figure below shows our spending habits for the last year. Mortgage accounted for the majority of the budget but no surprise there. You can clearly see our priority in life – with 18% of the spending going to travel. More surprisingly, shopping accounted for 13% of the spending. Shocking! Mainly because I strive to be a minimalist. So why were we spending so much money on stuff?

We will work on that this upcoming year.

Dining (eating out) spending also needs to be lower than food (grocery and cooking from home).

Overall, I’m relatively satisfied with how we’re spending our money. A few things helped us:

  1. No car payments and living close to work really lowered our transportation needs.
  2. Utilities were much lower than anticipated. I think the solar panels helped tremendously there.

We skimped on entertainment – travel was all the entertaining we needed.

spending habits 1 year
financial freedom spending habits

Saving to Retire

Overall, we saved 40% of our take-home income (after tax). In the earlier months, our savings were much lower. It was truly a revelation. When we realized how little we saved, we made a concerted effort to save more, and the 40% rate was the result of that change in our habits.

We put a lot more of our money into indexed funds and other safe investments.

Overall Outlook

All said and done, we made tremendous stride toward our goal. The figure below shows where we were when we originally started keeping track. The far right is the 100% mark, signifying that we have saved enough to retire.

An 8% step toward financial freedom is huge.

percent increase for financial freedom
retire early progress update 2017

Other Influences

Our great start was helped by a few other factors not mentioned above:

  1. Our house value went up 13%! An incredible increase, representative of the hot housing market in the Seattle area.
  2. The general market went up like a rocket. Though our exposure trended toward the safer option, it did help us increase our holdings.
  3. We downsized two cars to one. Now we carpool to work. Getting rid of the extra car removed all the expenses associated with it: insurance, licensing fees, maintenance, etc.

Final Thoughts

Before we started diving into our current financial situation, we had no idea what the outlook or future looked like. Now it is clear. Writing down our goal and figuring out where we need to be to retire early were two fundamental decisions that took our pie-in-the-sky dream and turned it into a track-able plan.

I encourage you to do the same – whatever your dream might be. Take some time to write down what you want. Figure out where you are currently, and put a plan together to get to where you want to go. It will take hard work, but the dream is worth it.

Let me know how YOU are doing with your dream. If there is something else you would like me to address in my next progress update, drop a comment below.

Here’s to launching your DREAM!