In our journey to Financial Independence, I have been tracking three key metrics:
- Net worth, defined as total assets – total liability
- Accessible net worth, discounts equity in the primary residence, and
- Adjusted accessible net worth, which further discounts funds in retirement portfolio which are inaccessible without penalty until age 59.
We achieved our first milestone towards FI back in March of 2021, when our net worth cross our family FI number. Then in Feb of 2023, we crossed the next milestone when our accessible net worth crossed the threshold of FI number.
As of this writing, I am happy to announce that we have now officially also crossed the final milestone in our FIRE journey whereby our adjusted accessible net worth is greater than our FI number.
It was one of the new year goals that I outlined for AVI family at the end of 2023. Back then, a 20 point increase from 80 to 100 seemed a tall order, especially coming out of a bumper 2023. However things have turned out to be quite different. The S&P500 bull run has continued unhindered with the AI tail wind followed by FED interest rate cut and finally the TRUMP election boost.
Below is a summary of key financial metrics that I track diligently
I have highlighted the 3 key metrics presented above. All three are above the proverbial 100 threshold! Our liquid assets are now more than 10 times our debt load.
Under normal circumstances, i.e., where by the debt interest is greater than risk free rate, 10X multiple of liquid assets on debt would have prompted me to pay of my debt ASAP! However, in the post covid world, a few folks such as AVI family have benefited significantly by the low mortgage interest rate lock in, and as I discussed in my last post, it simply does not make sense for us to pay off our debt.
I penned my first FIRE article for this blog back in August 2019, just a few months prior I diligently began my own FIRE journey in March of that year. It took me precisely 5 years and 8 months to complete this journey. Along the way, I evolved my thinking from FIRE (Financial Independence, Retire Early) to FI (Financial Independence), refined my definition of FI, and re-evaluated my belief that being debt-free is an essential condition for achieving FI.
During this period, the world has changed dramatically. I witnessed a once-in-a-generation pandemic, which led to a COVID-induced mini-recession. This was followed by a wave of meme stock euphoria and a rapid rise in inflation that prompted an aggressive response from the Federal Reserve. We saw the end of the “free money” era and the dawn of the AI age, with Nvidia emerging as a beacon of optimism about how AI could transform our world. In addition the world has witnessed two ongoing wars that have further shaped global dynamics.
Amidst all this, US markets have continued their relentless march upwards. The American dream feels alive and well, and I am grateful to have been one of its beneficiaries throughout this journey.
Reflecting on these experiences has deepened my appreciation for the opportunities available to those who are willing to adapt and persevere in the face of change. My journey has not only been about achieving financial independence but also about personal growth and resilience amid a rapidly changing world.
While reaching the end-of-journey is a bitter sweet experience, I plan to savor this through the end of the year and then starting into the new year, I will embark on a new journey towards the next milestone — TBD!