FIRE Month Savings Progress Report for August 2022

Back to school month

What happened this last month?

This month was great from the perspective of our expenses decreasing and getting us back to a more reasonable number after the kitchen remodel last year. We even were able to invest a decent number. However, we’re not investing enough to counteract what the markets are going to do.

As you invest more, you’ll notice more wild swings in your net worth. The key is to not look too much at the day to day numbers, but instead look more at the long term direction. That why I tend to forecast our future numbers based on an average of what we’ve been investing and an annual return of 10%. I also track some numbers in the graph below so I can see that we’re headed in the right direction overall.

As the markets contract, that’s our best opportunity for building long term wealth. The Dow, S&P 500, and Nasdaq were all at a high at some point and if history is correct, they’ll hit that point again and exceed it in the future. So you can look at anything you buy below that high point as being on sale.

For example, at the end of August, the highest point for the S&P 500 was 4818.62 (set back on January 4, 2022). At the end of the month, it sat at approximately 3955.12. That’s a discount of almost 18%. Put another way, if you bought an S&P 500 index fund at the end of August, when it eventually hits that high point again, you’ll have a gain of almost 22%!

If you’re wondering what I use to track our numbers monthly, we use both Mint and Personal Capital. Personal Capital has a lot of cool planning tools that I haven’t seen anywhere else. You can check them out and we both get $20:

Where did we spend the most?

Our monthly expenses decreased significantly compared to last month. They were also a bit lower than last August. We only had on large one-time expense to do some concrete repair that’s been needed since we lived here. I had gotten used to it being the way it was, but now that it’s done, it looks great.

  • $3026 – Concrete Work
  • $288 – School Fees
Current and future value against Minimum FIRE Goal and 25x Expenses Goal

53.43% to target number (previously 55.17%)

This is our invested assets/target number. Our invested assets span across a variety of investment vehicles such as 401k, HSA, IRA, Roth IRA, ESPP (Employee Stock Purchase Program) and standard taxable mutual funds.

71 months (previously 72)

The number of months until my 45th birthday and our finish date.

33.98 months (previously 32.73)

The number of expected months until we reach our target number based on our current expected monthly contributions, assuming a 10% annual return.

10.48 times annual spending (previously 10.73)

This is how many multiples of our annual spending we have saved up towards our goal. For example, if this value was 9.1 and we spent $10,000 annually, we would have $91,000 saved up.

41.91% to minimum FIRE (previously 42.91%)

The minimum number to achieve FIRE is 25 times our annual spending. This number shows how close we are to the absolute minimum.

19.61 times annual spending at goal number (previously 19.44)

We have a goal amount that we’d like to reach. Given our current annual spending, this is how many times our annual spending we’ll have saved when we reach our goal number.

How Much We Invested

-82.58% Month to Month Change In How Much Saved (previously 379.81%)

This number shows the change in what we saved this month compared to the prior month in things like 401k, Roth IRA, taxable accounts, and Employee Stock Purchase Program.

-81.19% Month to Month Change in How Much Saved With Employer Contributions (previously 342.22%)

Same as the prior number, but with employer contributions counted.

1.19% Month to Month Change in 12 Month Savings Average (previously 32.66%)

This number show the change in what we saved this month compared to the prior month, but on a 12 month rolling average. This helps to smooth out months over time and shows a more general trend.

1.62% of 12 Month Average Net Income Invested With Employer Contributions (previously 30.34%)

Same as the prior number, but with employer contributions counted.

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