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To tell you a story about where we are in our FIRE journey and when we expect this all to happen, it first makes sense to lay the groundwork for where we’ve been.

The Dark Ages (Before Dave Ramsey)

When I graduated college in 1998, I had $26,000 in student loan debt and a couple of credit cards. Before learning about Dave Ramsey and the Total Money Makeover, having debt provided no reason for concern as it was considered “normal.” Everyone was graduating with debt. I was no exception. My student loans were not only used for school and books, but also to pay for my lifestyle – pizza and beer, dates, and a car.

I was sucked into credit cards to “build my credit” and get a free t-shirt. I was fortunate enough to get a job right out of college in engineering (matching the degree I had just earned), but instead of attacking the debt, I just kept making the minimum payments. I married my wife the following year and we continued on our path to the American dream.

We bought a house with no money down (a big mortgage and an additional second mortgage). A year later, my wife bought a brand new car so we got a loan for that. Not to be outdone, I needed a car the following year (but I at least bought a used one that was a couple years old). It still came with a loan though. It wasn’t until 2005 that we learned about Dave Ramsey and the Total Money Makeover. 

Our Total Money Makeover

We were lucky to both be employed, using our college degrees, while we were servicing all of the debt we had acquired. We even thought we were doing alright by investing enough in our 401k’s to get the company match. We started the debt snowball (one of Dave Ramsey’s 7 Baby Steps) because we realized that we were ready to have kids and we wanted to have my wife stay at home with the babies. The monthly budget just wasn’t going to allow that. One of our two incomes was going entirely to making just the minimum payments on all of our debt.

Dave’s 7 Baby Steps

• Baby Step 1 – Save $1,000 to start an Emergency Fund
• Baby Step 2 – Pay off all debt using the Debt Snowball
• Baby Step 3 – Emergency fund of 3 to 6 months of expenses
• Baby Step 4 – Invest 15% of household income into retirement
• Baby Step 5 – Save for kids’ college
• Baby Step 6 – Pay off home early
• Baby Step 7 – Build wealth and give

The Debt Snowball

The debt snowball is a technique where you list out all of your debts and their balances starting from smallest to largest. You continue to make minimum payments on all of them, and then you start with the lowest balance debt and throw all of your money at that one until it is paid off. When that debt is paid off, you take what you were paying on that debt each month and then start attacking the one with the next higher balance. You continue this until you’ve paid off all of your debts. It has the advantage of giving you quick wins early and the feeling that you’re actually making progress in cleaning up the mess.

Once we started the debt snowball in 2005 with $75,000 to pay off, we got very intense about it and had cleaned it all up in 2007, just 2 years later. With confidence, we could now afford for my wife to stay at home to raise children. Without the headwind of debt payments holding us back, we were pretty confident we could survive on one income.

The 2008 financial crisis challenged our view that employment was secure and a sure-thing. We saw many of our friends lose jobs and have to relocate unexpectedly and immediately to find work. With a young family, we decided that we wanted to be in control of those decisions and not be victims to our mortgage payment, having to take work we didn’t prefer just to make ends meet.

We dusted off that gazelle intensity we had used years earlier to pay off our debts and attacked our mortgage aggressively (Baby Step 6). Every extra dime we got we put towards it. Bonuses, stock payouts, craigslist earnings, even birthday money; everything went to paying extra on the principal on our mortgage. Four years later we had a paid for house. We called in to Dave Ramsey’s radio show to do our Debt Free Scream.

Baby Step 7

With a paid for house, we had arrived at Dave’s Baby Step 7: Build wealth and give. We were ready to live (and give) like no-one else as he says. We started doing just that.

Cancer Sucks

Three months after paying off our house, though, I got cancer. Any feeling that we had conquered this personal finance thing went by the wayside as we buckled down to fight a disease that just doesn’t care how well your financial house is in order. Thankfully I beat it. That makes you want to celebrate. And we did! But we also got lazy with our finances. We didn’t really have a goal, a next step. We were somewhat aimless.

Introduction to FIRE

I went through a rocky patch at my day job. Twenty years into my career I was discontent with how I was spending 40+ hours of my week. I knew there could be more. One day I Googled “Early Retirement” and found the FIRE community. I found some shockingly simple math that would tell me when I would be able to quit my job. We had some work to do, but, because we didn’t have a mortgage payment, an increasing amount of money left over at the end of the month was going to savings. Savings that would eventually grow and be able to fund an early retirement.

Present Day

That’s where we find ourselves today. The math says that another 7 or 8 years doing what we’re doing will get us to Financial Independence. But is that good enough? Is there something more? Could we accelerate this plan?

In 2019, we became aware of this thing called the Great Loop. If we wait 7 or 8 years for FI to do it, we’ll have 2 college students. We’d much rather take a mini-retirement earlier than that and go on this epic adventure together as a family. But how do you select when to do it? Should I quit now? A year from now? Three years from now? It’s hard to know.

The Timeline

Our timeline is somewhat less dictated by our retirement accounts and more driven by the ages of our children. That puts us in a window of time between now and when our oldest graduates high school (in 2025, or maybe 2026 if we employ a gap year) to pull off this adventure.

With a rough timeframe of now (2020) to 2026, how do you pick? We have some guiding principles that strongly influence our decisions:

1. We want to do this family adventure debt-free. That means buying a boat debt-free and saving a year’s worth of living expenses. That will take time. Probably a couple of years. That means 2020 is out, 2021 is out, but maybe we could have that much saved by 2022 at the earliest.
2. My wife and I both moved around the country a lot growing up.  We know how disruptive it is to move in high school. We want to provide some stability while also exposing our children to this grand adventure. That probably means not uprooting our oldest during her senior year of high school.  That means her senior year of high school in 2024-2025 is out.

This leaves us with a two-year window that we can pull this off. 2022 or 2023. Both are viable options (with sooner being preferable to later) so 2022 is our target and 2023 is our contingency plan. This allows both good timing for being able to save for the trip, and good ages for our children to not feel uprooted and use this adventure as a homeschool learning opportunity before they graduate high school.

Our Current Countdown to FIRE Timer

Retiring Too Early?

The one downside (if you see it that way), is that it won’t be a clean break from the world of a paycheck. Adventuring in 2022 or 2023 means we will not have hit our FI number yet (we’d be 5 or 6 years too early). That means that we will not be able to live off of our investments indefinitely when we return to normal life. We may not need the higher salary day job I have now, but we will definitely need income to carry us until the time we formally retire and live on our investments. That, we call it CoastFI or BaristaFI, will involve bringing in some money through fun jobs or side hustles and fund health insurance while our investments continue to grow enough to carry us all the way to retirement.

How is This Possible?

Being debt free gives us these options. Having savings gives us these options. Living on a budget gives us these options. As you can see from our timeline/journey, this has been a long time in the making. It’s not something you set out a lifetime ago with one distinct plan and timeline and execute to, but getting your financial house in order quickly and keeping it that way so that you can have the freedom to live your best life as your dreams and circumstances change.

You never know what life is going to throw at you. I couldn’t have predicted cancer, an epic boat trip opportunity, or countless other things when we set out on this path over 20 years ago. But the choices we’ve made and the hard work we’ve done (not knowing where it would lead) have paid huge dividends in allowing us to take advantage of life’s opportunities. 

Thank you for coming along for the ride as we continue along our journey…