My FIRE number is 288k USD and how to reach it in an HCOL area

This article may contain affiliate links in which if you click and purchase something I might earn a commission. This is at no additional cost to you but it does help the blog keep going. In this article, I write what my FIRE number is and the actions I am taking to reach it. 

What is FIRE?

It is an acronym for Financial Independence Retire Early. There are several different types but it is 25x your yearly expenses. You can read this article on how to calculate it for yourself.

Why is it so low?

If you read the previous article, you will see my FIRE number is $344K, however, this number assumed continued debt repayment ($60K) and continued savings ($24K). If both of those are removed then we remain with $260K, I made it $288K to add an emergency fund cushion of approximately 2 years. Which is only a 7% increase from $260K.

Why is it so low?

I do not like spending money and I consider myself as somewhere between a minimalist and a maximalist. I like having everything I need and not any more than that. However, this is subjective, as some people might think they do not need decorations, but I do not like empty white walls.

This is exactly why I paint with watercolors, it is a sort of a hobby of mine. I use these, if you are interested.

In case you need another hobby or know someone else who would like a new hobby as a Christmas gift.

How I am reaching this goal?

I do not just save, I invest

This is due to inflation shrinking savings. The rate of inflation is 2% a year, so that means you need your money to be accruing interest in a high yield saving account (HYSA) at more than 2% a year. The highest right now is 0.70%, not close enough to the inflation rate. 

So I actively add into two brokerage accounts: Robinhood (get a free stock) and M1Finance (Get $10 when you fund your account). They are currently earning well above that inflation rate. However, these are younger accounts. I opened the M1 earlier this year when the market dropped so it has a rate of return (ROR) of 31.56%. I have had my Robinhood account for a couple of years and the ROR in the last year on that one is 9.22%. 

Both with higher ROR than an HYSA. Unfortunately investing does carry a risk, so I could have it wiped out in a downturn, which occurs every few years. When it does happen, I will continue buying since I am not going to use that money until I need it . So, I do have to consider all of this in my FIRE number calculation. However, considering that these downturns are normal, which is why I am having a portion (2 years worth) in an HYSA. This is the 7% mentioned previously. 

How they will be distributed

Ultimately, $260K will be in investments, tied into index funds, and some growth and dividend stocks. The remaining $28K will be in an easily accessible HYSA.

I do want to mention that these numbers can change. This is dependent on where I move to after my Ph.D. and if there are any additional costs (housing, health, etc. 

Two books if you are interested in reading more about reaching FIRE.

The first is a workbook about reaching FIRE, the authors have retired to Portugal.

Goal to LeanFIRE
8%

What is my projected retirement date?

If I am being honest, I do not have one. Instead, I will do mini-retirements or extended vacations and then re-enter the workforce. 

I enjoy the career path I chose, which is why I decided not to pursue a career in tech or other high-stress/high-income positions. Choosing a career path that I thoroughly enjoyed was important so I did not one day grow old and think ‘what if.’ 

This does not work for everyone but it seems that I am one of the few within the FIRE community on Instagram who is not one of these positions. However, this position is only for a couple more years since I am doing a Ph.D. Upon graduation, my income should increase a bit, which means reaching this LeanFIRE goal will be easier.  

2 thoughts on “My FIRE number is 288k USD and how to reach it in an HCOL area

  1. Steveark says:

    I’m impressed, that is without a doubt the absolutely lowest FI target I’ve ever seen and I’ve been reading in this space for ten years. You win! You are a frugal master. Congrats on progressing toward your doctorate.

    • Crista says:

      Thank you! I will update if those numbers change but they are stable as of right now. It has taken me years to become this frugal!

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