We’re close. So very close. We can actually see the finish line ahead. All these years preparing for FIRE.
Mrs. P2F and I have been socking savings away for nearly thirty years. Little by little – paycheck by paycheck. Along the way we had some detours…purchase of our home, raising two terrific kids, buying cars every so often, etc. But by and large we tried to keep steady with saving for our future.
Over the past ten years or so, I’ve tracked our assets much more closely than in our earlier years. However, I kept copies of year-end statements since my mid-twenties. By going back and recording our year-end balances, it’s provided a great visual of where we’ve been over the years. More recently as we’ve approached FIRE, I created a chart that shows our progression as a percentage of our FIRE number. It provides some reassurance. You can see the results below.
The dips are as you would expect. Tech bubble, Great Recession. The chart helps me be a little less nervous because I can see that following each dip, the curve eventually changes direction and continues it upward path. And it doesn’t take that long to revert back. So, in the future, when you hear others say stay the course after a dip, remember this visual and what it shows you … the market over time moves upward.
What’s also interesting is it shows that over time the market and persistently saving pays off. For the most part our investing has been on autopilot. Paycheck after paycheck contributions have gone into our retirement accounts through work. And while it wasn’t much at first, with salary increases over the years, we were pretty good at increasing our savings with a portion of each raise. Our take home would go up by some but our savings percentages would also increase each year as well.
In the earlier years, each paycheck contribution to our 401(k) or investment account didn’t really feel like it was advancing our retirement goal. That $25 or $50 just didn’t move the needle much. But as I look back, I realize that each contribution builds upon itself and the miracle of compounding over long periods of time does make the difference.
If you’re starting out on your journey towards FIRE make sure you create a path that makes it easier over time. Contribute automatically to your employer’s retirement plan through payroll deduction. If you employer doesn’t offer a plan, work with an investment company that will deduct money from your savings or checking account on a regular schedule. It won’t seem like much at first, but give it time, like we did…. you’ll be happier when you look back.
Have you been saving regularly and automatically or do you save as you go when you can? What ways have you found to make putting money aside as easy as possible? Share your thoughts and ideas below.