Our Financial Path.

Start Saving, Investing and Reach Financial Freedom.

Open Book – Half a Year, Half Way There

This is part of our Open Book series, you can start here if you did not read our first post.

We are in June and it is time for our mid-year assessment. We have been tracking our income and spending for years and since we discovered the whole concept of financial independence, we started tracking our savings rate. The amazing thing is; the more we can increase our savings rate, the faster we can claim our financial freedom.


Early Retirement GridSource, Four Pillar Freedom


Our friend Zach who writes over at Four Pillar Freedom shared with us this great early retirement grid. It is an easy way to visualize how many years you will need to reach financial freedom. Simply match your annual spending from the vertical column with your annual net income (take-home pay) from the horizontal row. The number where they meet is the number of years it will take you before reaching FI. This assumes a conservative 5% annual return on investments and a 4% safe withdrawal rate (see Trinity Study).

So far, we held an average 61.5% savings rate for these first 6 months of the year! If we can keep this up, we can retire 9 years from now, roughly 11 years after we first discovered financial independence was even possible. These rough estimates came from our assumption that we can be living off 4% of our portfolio once we retire and we assume 7% annual returns on investments given the historical averages of an equity portfolio (10%) minus the average inflation during the last century (3%). This is a new record for us and we are super proud to cross the 60% bar for this considerable amount of time. We will calculate it again at the end of 2017 and, hopefully, we will have stayed above this mark.


Your personal savings rate =


Your annual savings including any employer match (or any debt repayments) x 100

Your total income less taxes, plus any employer match


The income side of our equation is slightly higher since I started my new job now with a 15% higher salary than my past position and we did earn a few dollars from sharing our home with travelers. I still benefit from a generous employee stock ownership plan which matches part of my stock purchases so we included the match in too.

Our spending actually decreased from last year so our savings rate jumped quite a bit. To put numbers to the equation, increasing our savings rate from 50% where we were last year to the 60% we are now aiming decreases our working years a whopping 4.2 years! That is 4 more years to enjoy doing whatever you want to do. 4 more years not waking up to an alarm clock. 4 more years of freedom!


our spending and how we travel for free

We did a lot this year, we traveled to British Columbia, New York City, and we booked a trip to LA and San Francisco in August. All of these were very cheap since we now get free hotel stays and free airfare through reward points but we are running out of vacation days! All-in-all,  we spent about $1,000 for those three trips and most of that was restaurants. In our last spending post, traveling was our second biggest expense at a staggering $9,582 for the year but we were able to cut this so much that it is not even in our top spending categories anymore. Keeping this up for the whole year should decrease our annual spending by almost 14%.

Unsurprisingly, our biggest expense is our house. We spent $9,846.38 in the last 6 months on our mortgage payments, home insurance, home maintenance, and property taxes. We are not concerned about this one too much since we greatly enjoy our house and maximize its utility by renting out our spare bedrooms on Airbnb. In the last 6 months alone, we made over $2,000 just for hosting a few guests.

In our Food and Dining category, we spent $3,730 in the past 6 months. This brings our average montly spending down to $621 compared to the $723 per month we averaged last year. We did not change anything to really cut our grocery bill exept for an organic, locally grown, vegetable basket subscription we now enjoy. This small change not only decreases our monthly spending on fresh produce but also helps our local farmers thrive. We believe in sustainable, local, farming and it also taste better. The $100 cut in this category mostly came from less dining out.

For the last 6 months, we spent a total of $2,102 on Bills and Utilities. This includes our two cell phones ($60/month plans), home internet ($45/month for unlimited high speed), and electricity (winter just ended so we had $200/month bills but we pay roughly $50/month during the summer). Our heating is all electric and we do not pay for water or cable TV.

For Transportation, we spent $2,553 or $425 per month. This includes car maintenance, gas, and repairs of our two cars plus any transportation we use during our travels. We do not have any car payments and do not advice you get one either.

Our last considerable expense was Shopping which includes some household goods we bought off Amazon, clothing, gifts, and a few little trinkets. This adds up to $1,508 in the past 6 months.

Including all the smaller categories that we are not budgeting for, we spent roughly 30% less from January to June than we did from July to December of last year. This is mainly due to the huge cut in our travel spending since we started getting free hotel stays and free airfare through reward points. We were spending thousands of dollars on travel and we are able to cut this down with a few credit card applications. The welcome bonuses theses companies give to attract customers are more than worth our while and we can help you find your own way through travel hacking if you need a little help.

We wish you great savings and a wonderful summer, Mr. and Mrs. Xyz.



  1. Awesome progress, congratulations on being 4 years out from FI! Mr. Adventure Rich and I are early in our journey, so seeing posts like this always give us inspiration and keep us excited about our FIRE goals!

  2. This is an awesome chart, thanks for sharing!

    As a dividend growth investor, I like to keep my portfolio’s dividend yield above 4% which happens to be the income level we would need to live in retirement. This also ensures we don’t have to sell our stocks to meet the needed withdrawal rate.

    For early retirees, we have a much longer lifespan in retirement, more like 40+ years to make sure money would last that long.

    • Xyz

      June 17, 2017 at 11:20 pm

      Yes, dividends are a great way to plan withdrawals. However, we prefer looking at total returns but keep it up!

  3. Knocking off 4 years is a huge leap to freedom! Congratulations! I have a feeling as you move along you might chop off another year or two.

  4. Wonderful job xyz! 4 years is basically just surviving high school or college again, totally doable (not Disneyland but workable!)

  5. Thanks for the shout out guys!

    Nice job on traveling for cheap with the rewards points as well, travel hacking with reward cards is something I definitely want to get better at in the future. Keep up the great progress 🙂

  6. Wow! It seems like you guys were doing well before, but that’s a huge margin of improvement! Congrats on your extra four years!

  7. Awesome job Xyz! 4 years closer to freedom, gotta love that! Best of luck on the continued savings. Wishing you and Mrs. a great summer as well.

  8. I’m loving the blog. Bookmarked! keep it up guys!

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