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I started this series to reflect on our goals, summarize blog developments and share some things I learned.



I hope you get some value and enjoy following our journey. If you haven’t already, join the Flexcents community as it continues to grow!

We recently returned from our Southeast Asia trip. It was a two-week adventure-packed trip that allowed us to get a small glimpse of our parents’ old lives.

The country is far different from that of which our parents came from, but we were grateful to have the opportunity to explore Vietnam and Thailand with our best friends no matter the cost.

That being said, this was our most expensive vacation yet. We spent $3723.56 for all related expenses. Normally, we would use our flyer points to save some money, but we found ourselves with limited flight choices when booking through the airline.

Instead, we paid for the flights out of pocket and will redeem our flyer points for roughly $1,400, which will reduce our discretionary expenses for the month.

Financial Goals

We discovered the financial independence (FI) movement in January 2018. Even though we were good about saving money and paying off debt as quickly as possible, we were still far away from FI.

Despite this, we did not let it stop us and we began tracking our finances meticulously by using the personal capital website and made a spreadsheet to track all our numbers related to FI.

One of the many things we track and can share with you is our progress to FI.

It is calculated by the following formula:

Formula: (net worth / projected FI number) x 100

The closer you get to 100%, the closer you get to financial independence.

Our Progress to Financial Independence

While market levels are not what they were before the 20% dip in October 2018, I’ll enjoy the gains during this recovery period while they last.



2018 Start of FI Journey: 12 – 19% January – 11.62%

February – 13.74%

March – 14.55%

April – 15.04%

May – 16.40%

June – 16.74%

July – 18.30%

August – 19.33%

September – 19.79%

October – 19.29%

November – 19.97%

December – 18.81% 2019: 21% – ? January – 20.96%

February – 22.22%







Learn More About Financial Independence

Toggle through to learn what Financial Independence (FI) means and the VITAL role it plays in allowing you to live your best life.

What Is Financial Independence (FI)? Financial independence (FI) is described as when your assets generate enough passive income to pay for your necessary and discretionary expenses without having to be employed or dependent on others. These assets are usually in the form of stocks, bonds, real estate or other businesses Why Might Financial Independence (FI) Be Relevant To You? FI allows you enough financial security where you can retire and have your expenses covered by the income generated by your assets. If you’re like most people, you are planning to retire or semi-retire at some point in your life, but even if you plan to work for as long as you can, I am sure you would prefer to do so out of enjoyment rather than necessity. Nearly everyone is working towards financial independence whether they know it or not. Ultimately, FI allows you to have more options and freedom. It allows you to be free from worry about how you would pay for your bills if you lost your job, got injured, or needed to care for your family. It would also allow you to travel, spend more time with loved ones, explore hobbies, give back to your community, or sit on the beach without worrying about needing to go back to work. SOUNDS GREAT RIGHT? Now, what if I told you you could have this level of freedom before you are too old and wrinkly to enjoy it? Most people wait until they can claim social security because they haven’t saved enough money, but there is a community of individuals who are way ahead of the curve. They have achieved financial independence decades ahead of their peers. If you want to learn how to do the same, keep on reading! How Much Do You Need To Be FI & Have The Option To Retire (Early) ? If you haven’t heard of the 4% rule, you will today. It is a popular method to determine how large your portfolio needs to before you retire. Nearly everyone in the FI community starts at the 4% rule to determine their FI number. The 4% rule is a rule of thumb used to determine how much a retiree should withdraw from a retirement account each year. This rule seeks to provide a steady income stream to the retiree while also maintaining an account balance that keeps income flowing through retirement. – Investopedia For Instance, if you have $1,000,000 properly invested, you should be able to withdraw $40,000 ( inflation-adjusted) per year without drawing down from your principal. That means your lifestyle does not exceed $40,000 during the first year of retirement. After the first year, you adjust for inflation each subsequent year. If we assume a 3% inflation rate, you can withdraw $41,200 ($40,000 * 1.03) in the 2nd year and $42,436 ($41,200 *1.03) for the 3rd year. To calculate your FI number we need to use the inverse of 4%, which is 25. It took me a while to get it, so here is the math: 4% = 4/100 , Inverse = 100/4 = 25 Now let’s say you’re a nerd and kept a budget for the last year. You know exactly how much you spent in each category and you add up the total to be $60,000. Use the inverse of 4% (25) to calculate how much you need by the time you retire. $60,000 x 25 = $1,500,000 So you need $1.5 million to retire based on the above example. All of the above comes from research called the Trinity study. Our plan: For us, the 4% rule was a great place to start, but everyone is a little different and we wanted to be more conservative. Therefore, we are now using a 3% safe withdrawal rate (SWR) which means we have to save 33x our projected annual expenses. Some may argue this is too conservative, but we’re comfortable working a little longer for some extra security. What If Your Number Seems Too High / Too Low? Using this method is not perfect, but it is a great place to start. If your number looks TOO HIGH and you believe there is no possible way you can accumulate that amount of money even if you invested aggressively: Check if you included recurring expenses that you do not plan to keep during retirement. These are typically any debts you owe or children that you will no longer need to support. If you find them, remove them from your FI number as you do not need to draw down from your portfolio to fund these expenses. Maybe you’re just getting around to saving your first $1,000, $10,000, or even $100,000. It gets easier and more possible the more you save. Don’t let your belief’s limit your potential. Maybe your current lifestyle is way too inflated and you do not intend to downgrade during retirement. If so, you need to be realistic about what is possible. It’s likely you either have to cut back now or cut back later. If your number looks TOO LOW and you feel it is not enough for retirement: This may be the case depending on where you are in life. This equation becomes more accurate the closer you are to retirement because you have a better idea of your current and projected expenses. Maybe you’re used to seeing results from those retirement calculators that estimate how much you’ll need based on a percentage of your income. Those are usually pretty inflated because they usually aim for you to need 70% of your income to live. For instance, if you make $100,000, they will project your retirement to need 70k per year. For me, that is much more than I need to live on per year, but to each their own. Ready To Start If you want to start your own path towards financial independence, I would start with this resource from a friend of mine. He condensed many books we’ve read into a 48 page PDF.

Want to know your progress towards the possibility of retiring early?

If you are are interested in finding out how far you are from financial independence, you’ll need to know your net worth and your FI number.

Formula: (net worth / projected FI number) x 100

Finding Your FI Number

The traditional way to calculate your FI number is based on the 4% rule. Simply put, you would multiply your annual expenses by 25 and make sure that money is invested to give you an annualized return for 7% or greater. Based on the Trinity study, you have a 98% chance of that money lasting your 30 years.



You can find more details here at the popular article by MMM: The Shockingly Simple Math To Early Retirement.

For us, the 4% rule is a great place to start, but everyone is a little different and we wanted to be more conservative.

Therefore, we are now using a 3% rule which is approximately 33x our projected annual expenses. While it will take us longer to reach our FI number, it will allow us to be more comfortable in the future.



This rule isn’t perfect depending on your situation, so what do in addition accounting for recurring expenses, we also include one-time large expenses such as our future home and current debts.



Finding Your (Investable) Networth

Simple: Assets – Liabilities

For us, we count our assets as any cash or investments we hold. If we held real estate properties which we rent out, this would be here as well.

We do not count the home we own or live in because you always have to live somewhere. Therefore, that money would always be tied up unless you choose to downsize or rent.

Liabilities are any debts you owe, this includes student loans, personal loans, car payments and yes, mortgages.

If you want to track your net worth, the best way to do this is by using personal capital.

Formula: (net worth / projected FI number) x 100

Fitness Goals

I got to admit, I got lazy on the vacation. I only exercised a handful of times. Between flying, exploring, and having too much to drink the night before, waking up early to exercise wasn’t happening. Somehow, I still managed to lose weight.



It is most likely due to the food poisoning from airplane food while traveling back to the U.S. The painful 14-hour experience will turn me away from flying for a while.

For now, I’m very glad to be back home. I’ve regained my appetite and made it back to the gym.

I better get serious with my workout routine if I want to reach 140 lbs and 10% body fat. It doesn’t seem like I’m too far away being 138 and 12.5% body fat, but numbers can be deceiving.

Blog Developments

If you frequently visit this blog, you’ll notice some things have changed aesthetically including the main pages.

I’m really happy with the functionality of the site right now but ran into some hiccups with the subscription sidebar which I am still working with developers to fix.

I’m hoping this month, I’ll get into heavy content production especially since things have slowed down quite a bit with home care visits.

Frugal Win

We have two frugal wins for February.

The first being that we are able to redeem $1,400 from credit cards. It definitely offsets our heavy spending during our recent vacation.

The second frugal win is that I saved about $1,000 in car repairs by buying my parts directly from the retailer and bringing them to a mechanic to install. If I hadn’t the total cost would’ve been over $2,500.

It’s too bad that I can’t bike to work since I have to visit patients in their homes and travel back and forth throughout the county. While I’m tied to this line of work, I am unfortunately tied to my car. I can confidently say that if a car wasn’t required for my job, I wouldn’t own one.

Trash for Cash

On the way to my second job, I found a music stand that I quickly up in my trunk. I sold it a couple of days later on facebook market place for $10. It’s not much, but everything adds up.

January:

Old office desk: $45.00

Old college textbook: $49.00

February:

Music Stand: $10.00

Total: $104.00



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Art is the founder of Flexcents, a blog created in 2018 to help others reach their fitness and financial goals through sharing insights as a physical therapist, personal finance nerd, and self-directed investor.