The Race to FIRE - Financial Independence, Retire Early

How we Unintentionally Joined the FIRE Movement

How we Unintentionally Joined the FIRE Movement

Not too long ago, every time my husband came home early from work, I would run to the door and fearfully ask,

“Did you get laid off?”

You see, his company was going though round after round of layoffs and we didn’t know if my husband’s job would be affected.

We did know that we were nowhere near financially ready to lose our only income.

It got so bad that he started preemptively texting me if he was coming home early. That way I would not go into a panic if his car unexpectedly pulled in the driveway.

After several looong months of stress, we had had enough.

We decided that we would aspire to a place where we weren’t dependent on the whims of a crazy boss or a downsizing company. A place where we would have no fear if his job suddenly ended. A place of financial independence.

Unbeknownst to us, at the same time there was a quiet movement afoot. A movement that had not yet made the headlines. A movement called FIRE – Financial Independence, Retire Early.

And we had just inadvertently signed up.

The Backstory

My first job out of college paid $27,000 a year. I was saving at least 25% of that amount. From day one, I was maxing out my retirement contributions to a 401(k).

When my husband and I got married, our total annual household income was $50,000. My husband’s salary was $23,000 a year.

We were living in a very inexpensive area of the country. We didn’t care about what we drove or how much stuff we could accumulate.

Much like the scene from Mad Men where Don Draper meets Conrad Hilton,

“We’re not much on fancy things or fancy people.”

Avoiding fancy things makes it pretty easy to save money.

The small debt we had when we got married was easily knocked out within a couple of years.

Four years after we got married, we relocated to South Florida for a great job opportunity for my husband. The new job offered him a starting salary of $50,000.

We didn’t have any children, so the move to a new place seemed exciting. Plus, my company offered to transfer me to a sales office in Miami.

During this time, we continued maxing out both our 401(k) accounts at our respective jobs. We were probably saving about 25% of our combined household income of $90,000.

After a few years, we had our first child. I didn’t want to go back to work full-time and found a part-time job as a tech writer for a software company. Although we weren’t making as much as we were when I was working full-time, we were able to live very comfortably on our household income.

Then we had another baby. At this point, I realized that mothers who work outside the home are truly Wonder Women.

I quit the part-time work to be a full-time stay-at-home mom. It was a leap of faith for us.

We found ourselves as a family of 4 living comfortably on my husband’s salary of $100,000 per year. Although the high cost of living in South Florida left us little room for indulgences. Like when the A/C broke in August. During an incredibly hot Florida summer. But we survived just fine.

We lived in Florida for 15 years where our family expanded to 5 with the addition of a baby girl. My husband’s career took off and he loved being a program manager involved with the latest technology in the world of mobile communications.

The Next Phase

In 2011, my husband got a call about a possible opportunity at the headquarters of a tech company in Canada. One of his early career mentors was an executive at the company and he was aggressively pursuing my husband to come and work there.

After an exhaustive 4-month negotiation process, we decided that this opportunity was worth relocating our family to Canada. The decisive factor was my husband’s interview with the COO of the company. The enthusiasm of the COO and his passion for the job convinced my husband to accept the job.

Just 2 years later, the COO would become the CEO. That was good news for my husband because the men had always shared a close bond.

The Downward Spiral

The reason the COO moved into the CEO role was the company was starting to decline and the previous CEO had been pushed aside.

The company had lost its competitive edge as other companies surpassed its technology. The death knell in the fast-moving world of mobile communications.

It was shortly thereafter that the layoffs started. Not just a few layoffs. Eventually, the layoffs would affect more than 60% of the workforce. The company was gutted from over 15,000 employees to just under 5,000.

It was during this time that my husband saw many talented professionals get the “walk to the door.”

There were new executives that would come and go during the next few years. With each, the strategic initiative of the company changed. But the downward spiral of the company continued.

My husband was able to adapt to the changes in the company. He identified a new business opportunity of potential growth and was put in charge of the initiative. But this change meant a lot of stress for us as a family. The ensuing long hours and constant travel (over 100,000 miles per year) meant he missed a lot of birthdays and special occasions.

We realized he could not keep up this pace indefinitely. The stress and the travel were beginning to take their toll on his health.

It was during this stressful time that we changed our mindset from just saving enough for retirement, to saving enough so that we wouldn’t need to worry about the impact on our quality of life if the company declined even further.

We started purposely saving more (which increased our savings rate to approximately 30% of his income). We saved 100% of every bonus. He also received stock awards every year.

See related: Coulda, Woulda , Shoulda – The Tales of Selling Company Stock

Enter the FIRE Movement

Since our savings were automatic, we took advantage of dollar-cost averaging in our retirement accounts, as well as the company match in his RRSP (like a 401 (k)). We ramped up our investments in accounts that weren’t tax-advantaged. We paid off the mortgage on our house.

I had always tracked our net worth annually. Over the years, we saw our net worth grow. And grow. And grow.

Thanks to a fantastic bull run over the past 10 years, we far exceeded where we thought we would be at this time.

We started to think that not only would we be financially secure if my husband lost his job, but maybe we had saved enough that he could quit his job and we’d still be able to maintain our standard of living.

Enter the FIRE movement. We set our eyes on a convenient date for my husband to say goodbye to his company (summer of 2020). That’s when a lot of important dates coincide: our youngest child graduates from high school, our oldest son graduates from college and my husband’s pension (from the company in South Florida) kicks in. It seemed like the perfect date to shoot for.

Over the past 3 years, we’ve made changes to our portfolio to protect some of the gains we’ve made during the bull run.

Thanks to many factors, like my husband’s growing salary and bonus, a great bull run in the market, purposely building a large cash portfolio and paying off our home, we are confident that we have attained FI earlier than planned.

And that is a great feeling.

Knowing that no matter what happens, we can maintain our standard of living. Even if the A/C breaks, we know that this time, we won’t have to wait several months to get it fixed. Or even worse, the heater breaks now that we’ve living in Canada. We’ve got enough to cover that and more!

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