Freed by 50

I want to say I wasn’t paying attention, but I’m always paying attention. Too much attention. I check my bank accounts every morning. I check my brokerage accounts multiple times per day. I track my net worth monthly. But at some point in the past few weeks, I hit a major milestone. Between cash and post-tax equities, I now have two full years of expenses saved!

I’ve written numerous times about my emergency funds, of which I have three:

1. My true emergency fund – This amounts to $500 cash in hand kept secure in my home. This is for emergencies like running low on oil in the middle of winter, or for opportunities that require cash, like the boiler repair man saying he’ll take $50 off if I pay in cash.
2. My “Oh shit the ___ is broken fund” – This is $2500 kept in a savings account for times like my pool liner failing last summer. This keeps me from dipping into my real emergency fund.
3. My big emergency fund – This exists for dire emergencies like losing my job or a hurricane destroying my house (my hurricane deductible is about $30k!). I hope to never have to use this, but it sure made me feel good when the economy collapsed earlier this year.

With slightly more than six moths of expenses fully liquid and ready to be deployed at a moment’s notice if need be, I’ve felt a sense of security these past two years that I’d never truly felt before. Over the past eight months, though, I’ve mashed the accelerator to the floor on our post tax investments. As I talked about in a previous post, I really didn’t start putting in large amounts of money until coincidentally the market collapsed. Even with the market at a two year low, I’d put almost a year of expenses into the market, and on top of that, socked away almost another half year of cash for an upcoming renovation.

With the recent market uptick (I wont say recovery because I fully expect it to drop again by August), I’ve seen a fairly substantial gain. It wasn’t until I was reviewing everything side by side this morning that I realized between cash and investments outside of retirement accounts, I now have two years of expenses to fall back on.

If I only focus on my ultimate goal of freedom, this is a minor milestone and something I have a hard time getting excited about. It’s almost difficult to quantify it in terms that will keep me excited until the next milestone, so I’ll try to do just that:

• I could pay off 60% of my outstanding mortgage balance tomorrow if I wanted.
• My current investment balance would generate enough money on its own to pay for my one leased car and my wife’s cell phone indefinitely.
• My son is two years old, I could not work for his entire lifespan up to this point.
• If I lost my mind I could buy virtually any luxury vehicle from Mercedes, BMW, Land Rover, Tesla, or other companies in that range in cash.

That’s enough to make me feel excited.

My next big milestone is to have $100k in my individual investment account. With any luck, that should be this August even if the market pulls back again. This will put me within striking distance of the next milestone of having 2.5 years of expenses covered, which I hope to hit before the end of 2020.

Since I really struggle with the boring middle times between moves and milestones, I think I need to find a fun way to commemorate these milestones. I don’t really buy much in the way of frivolous purchases. I have recently been buying hardcover versions of books I know I’ll read over and over, so I may start treating myself to one with each win. How do you keep up your motivation and do you commemorate your wins?