I wrote this post a week before quitting my day job. These kinds of moments don’t happen many times in a lifetime so I wanted to just record whatever is going through my mind and heart at the moment. I will also be sharing my experiences in the post-FIRE era. Stay tuned!
5 mins ago, I decided on the exact date to give my notice to leave corporate America. It will be next Friday. The time has come. As I am writing these, I am exactly one week away from handing my resignation to my boss. I just hit my number last week and decided to pull the trigger before getting infected with the “one more yearitis”.
It is a unique opportunity to write about this, so I decided to have a few glasses of whiskey before for extra inspiration. So please excuse any typos and any nonsense.
How am I feeling?
It’s a very exciting yet terrifying moment. I am feeling a little anxious for the first time since I have been making early retirement plans. Shit just got real. I know that the math is solid on the financial aspect, I know that I can go back to work if needed, I know that I am adaptable and flexible. However, it still feels uneasy since I grew up in country with a mindset where you don’t just leave work at 38. 30s and 40s are supposed to be your high earning years and you should work hard to accumulate as much money as you can. Then of course I realize that I am not actually stopping making money, I am just stopping exchanging my time for money. Now it is the time for my investments to work hard, non-stop, without any sleep. Long live compound returns!
I can’t wait to get to the day where I won’t get any work emails or Slack messages. Just pure bliss, you don’t have to do anything that you don’t choose to. Wake up when my body wants, go to sleep when I desire. I can’t fall asleep? No problem, just watch a movie and try again at 3am and of course, don’t worry about the alarm. Ok yes, I’m being shallow and shortsighted, but hey it doesn’t change that fact that I’m excited about all these 😊
Thinking back, I actually mostly enjoyed the work that I did and the people that I worked with. I was presented with interesting challenges and I helped creating solutions which kept my brain active, I made great friends, I created countless memories, I grew as a human being. All of my interactions and experiences shaped my identity and made me who I am today. So, I am very grateful for all that. With that being said,
I never said “I would do this for free” for any of my corporate jobs.
Every time that I think about what I gave in return (majority of my awake time at the least), I never thought that it was a good deal. Finding FIRE has been the alternative route that I’ve been looking for. It should be counted as one of the wonders of the universe or as a superpower like ChooseFI guys say. I owe so much to all FIRE content creators who enabled me to put the pieces together and free myself from the dependency to an employer.
What about the numbers?
Being a numbers nerd, the first thing that I had to do was getting the numbers right. For this, I had to answer the following questions:
- How much total investments do I need?
- How will I finance the next few years to mitigate the sequence of returns risk?
- What will be my target withdrawal rate? How much flexibility do I want to have with my spending target without meaningfully changing my lifestyle?
- How am I going to track my progress and make sure that the train stays on the tracks?
Setting the target investment amount was easy, based on the 4% rule as I discussed in this article. Aside from my investments, I had to think about how to minimize the sequence of returns risk. If you are not familiar with the concept, sequence of returns risk suggests that the market performance within the first few years of retirement play a disproportionately large role in the long-term performance of your portfolio. It is basically the risk of retiring with a bad timing. If a market crash were to happen soon after your retirement and if you continue to withdraw the same amount from your investments, your portfolio can lose a significant part of its value and its recovery can take a long time.
Therefore, I implemented a 3-year cash budget to minimize the sequence of returns risk. I was lucky about the timing of the stock market crash since I was able to invest more when the market was dropping rapidly. Don’t forget, the best time to invest is when everyone else is panicking and trying to get out of the market. You should see this as a fire sale as the stock market is actually on a huge discount!
Of course, there’s no guarantee that we won’t see another big drop in the near future, but at least the odds are in my favor since one big crash just had happened. It is probably the best possible time to retire right after a big financial crash, assuming that your numbers are where they need to be when you pull the trigger. The reason is that there is a good chance of solid positive returns within the first few years of retirement that puts your investment portfolio on a totally different level of growth trajectory. I will write about this subject in another post.
Beyond the 3-year period, I am planning to live on a 3 to 4% withdrawal rate. This will enable a comfortable lifestyle that I want to live, with some lavish spending built in. If I want to, I can take the withdrawal rate down to 2.5% or lower and still live a decent life. It is always comforting to have it as an option in case the alien invasion happens sooner than expected.
Being obsessed with numbers and spreadsheets, I created a cash flow model for 15-day increments for the next 3 years lol. It basically means estimating all your cash inflows (any kind of income) and outflows (all of your expenses including living expenses, travel expenses, one-time expenses etc.) to project the cash balance at the end of every 15-day period.
I tested my cash flow model in the last few months and actual figures stayed close to my forecasts, even with some unexpected and large expenses (which were baked into my model through implementing a buffer). It is vital to put a buffer when you go through a modeling exercise since life can throw unexpected things your way.
Enough numbers! What am I doing?? I feel terrible that this is the post to share my thoughts and feelings and I keep talking about numbers. Omg sorry!!
What am I going to do next?
My current plan is to slow travel the world for the next 2 to 3 years. I have been following how different places in the world are managing Covid and a few countries in Asia are doing a remarkable job. Some of them almost completely eliminated the virus while the Western world seems to be at least a year away from getting there.
I recently came across a blog post about Gold Card, an employment and residency card in Taiwan, which I seem to be qualified for. Taiwan is one of the few places in the world that is done with Covid thanks to its early, immediate, well-planned response with an impressive execution. There hasn’t been a local transmission case for months. I am hoping to make Taiwan my base for the next couple of few years and travel around Asia. As other parts of the world clear the virus, I will be determining my destinations accordingly.
There are a few things that I want to do in this next chapter of my life. I will share as much as I can in this blog and try to reach as any people as possible. Even if just 1 person takes action towards financial independence after reading my content, I will be super happy.
There are two other things that I will spend a lot of time on, especially in the next couple of years. I want to focus on my passion for dancing, I want to study with the best Cuban salsa instructors and maybe even start teaching salsa somewhere!
I also want to get fluent in Spanish. Given my unexplainable deep connection to the Latin culture, I suspect that some genes may have secretly sneaked into my family’s gene pool at some point.
I will take one day at a time as I spend months in random destinations, experience how people live, make connections, build memories and try to make every day count. I will volunteer, I will help build things, I will learn new skills, I may even try random jobs that are completely foreign to me. After this period, I will decide where to settle (or not 😁).
Ok I know that I’m rambling a lot but hey this is once in a lifetime post. As you can tell, I am excited. 7 days to go. Wish me luck!