Two Years Out: Are We on Track for Financial Independence?

Today's my birthday. I turn thirty nine, one away from the big year where I leave my thirties, turn forty, and run against the number I foolishly set as my goal for reaching financial independence.

Astute readers will note that I'm only one year from turning forty, and wonder why the post says I'm still two years out from the goal.

A while back I decided to give myself a little wiggle room: that if I hit financial independence by the last day I'm still forty years old, I'd call it a success. I used to post net worth updates and budget porn posts, giving readers (and myself) a monthly check in on all the financial details in the Done by Forty household. Somewhere along the line I decided I didn't like doing that, so now you voyeurs just get one chance a year to peek in.

So let's take stock and see where we stand. Are we on track to make the goal in time?

Even Out the Tax Benefits for All Workers Saving for Retirement

We are awash in big news these days. Right after reaching the milestone of paying off our mortgage we found out we maybe, technically might have achieved the goal this blogger set out to accomplish way back in 2012: being financially independent according to the 4% rule.

With all that still fresh in the air, last Friday Mrs. Done by Forty accepted a full time post-doc position to begin when we return from a trip abroad. She'll get to work in her field, and locally, too: two things we never thought would be possible at the same time when she entered the PhD program.

Her new job will bring on some changes, which we're going to tackle in our first ever collaborative post in the coming weeks.

But today I wanted to talk about one big change that's going to occur specific to our financial independence plans: Mrs. Done by Forty will have an employer-sponsored retirement account for the first time in over a decade.

The Investor Class & the Working Class

The middle class is one of my favorite things to think and write about. I've tried reframing the classes into quintiles, I've written about the difference between having a middle class income and having middle class wealth; about how your location determines a lot about what kind of income you need to be considered middle class. This blog has posts about how class and inequality are inexorably linked, and how one of the traditional definitions of being middle class (doing better than your parents did) is completely unsustainable.

These days I'm not really sure I love the terminology.

What if we're using some antiquated ideas of lower, middle, and upper classes that don't mean much anymore?

Wait, Did Paying Off Our Mortgage Kind of Make Us Financially Independent?

So, we did it. We sold a bunch of stock, pulled together our dividends and ESPP payments from June, scrounged up all the cash we could find, and paid off the mortgage last Friday. Pending some paperwork that has to go from the bank to the county, we are mortgage free and own our home outright.

It's a great feeling, if a little more subdued than we thought it might be. Maybe it's because we'd been mortgage free once before. Or maybe it'll just take some time to sink in.

Maybe we're a bit distracted as Mrs. Done by Forty was offered a job on the same day, and her decisions on that are more pressing than celebrating a milestone.

So We're Going to Pay Off the Mortgage

Talking things over with a few friends last week helped us make a decision: we're going to pay off the mortgage. All at once, by using the remaining cash we have from selling our two rental properties, but mostly by selling investments we have in our taxable accounts.

I already know from our mortgage swoop posts that most people probably won't like this idea. I'll try my best to explain our rationale, which I really do think is sound. But I'm not trying to convince other people that this is what they should do. Instead, I want to explain where we're coming from, our thought process, and just want to be as transparent and honest as I'm comfortable with on the blog.

I'm a Goddamn House Cat

Thanks to some changes at work, I've been slacking on all things internet: writing for this blog, reading and commenting on others', and keeping up with the latest nonsense on Twitter.

We just went through a re-org, the first I've had to go through in seven years at this company. That means I have a new role, a new team, a new boss, and a new and exciting level of work and stress that I need to get acquainted with. 

As long time readers of the blog know, I work in procurement and have ever since I was getting my undergrad. I worked in my university's procurement office during the day, negotiating prices and contract language, running RFPs, managing our supply chains and cutting POs, and then went to classes at night to earn my BA and then, later, my teaching credential.

Middle Class? How about Middle Quintile? (2019 update)

It’s been four years since I wrote a post on household income quintiles, in a vain attempt to reframe the way we think about the middle class. I’ve never liked the way that the term ‘middle class’ was simultaneously poorly defined and yet somehow still critical to the way we talked about finances, the economy, and politics.

Nearly everyone considers themselves middle class.  A household earning $30k can define themselves as middle class, even though a family of three at that income level would qualify for some federal subsidies, being within 150% of the poverty line. But most millionaires also consider themselves middle class as well, absurd as that is.

Either the middle class has a definition that is so broad that it includes both the wealthy and those skirting the poverty line, or it’s a term so poorly defined that anyone can claim membership just based on how they feel.

Battling Internet Addiction with a Time Lock Safe

I’ve never thought this blog was meant to help people. For one, I’ve never been particularly good at helping. I have no insights into helping with someone’s nutrition, or the kind of exercise that will finally stick, or how you can get to sleep at a reasonable hour.

Even the thing you’d probably expect me to have good advice on, money, is oddly something I’m not all that good at advising on. The tactics that worked for me may not work for you. We’re outliers in a lot of ways. And just because we’re be able to work towards an early retirement doesn’t mean I have some secret on how to do so; some plan that you can follow, too. 

(If there is any secret, it’s this: we were able to retire early because we earned about double the median household income for the entire time we were working towards FI, and we did so in fairly low cost Arizona after moving here from ridiculously expensive San Diego. That’s kind of it. We might seem more frugal than people who earn as much as we did; but we’re not far more frugal than the median family…who just happens to be stuck earning the median income, too.)

Tariffs are Just Regressive Taxes

Last week I put up a poll on Twitter, asking all three of you readers to decide what I should write about.

Would you rather read a post on tariffs being regressive taxes or, what I assumed would be more popular, our latest life hack that involves a time delay safe?

Apparently a slight majority of you would like me to be an amateur tax policy blogger, so this week I will try to write again about the dumbest part of our revenue system: regressive taxes.