I’m a little late for this December update, but who’s keeping track besides myself.
During my last update, I reduced the frequency of these reports from monthly to biannual to free up more time for my other projects. Well, I’m making another adjustment and decided to only write this update once a year. This is because I started a physical therapy private practice!
Why? You’ll have to read this to find out.
For now, let’s get to a summary discussing our progress towards financial independence.
OUR PROGRESS TO FINANCIAL INDEPENDENCE (FI)
To Financial Independence
2018 (Start of fi journey: 12-19%)
January – 11.62%
February – 13.74%
March – 14.55%
April – 15.04%
May – 16.40%
June – 16.74%
July – 18.30%
August – 19.33%
September – 19.79%
October – 19.29%
November – 19.97%
December – 18.81%
In the beginning of 2020, we were 33% on the way to financial independence. Now we’re over half way there!
This means that we have more than half of what we need to “retire early.”
It’s incredible that our net worth has increased more this year than any other year and it wasn’t because we were working in one of the technology companies that actually benefited from COVID-19.
With all the changes this year, I took home $52,000 after taxes and deductions from my full-time job. This is $10,000 less than last year despite myself hustling.
Regardless, I learned an important lesson this year. I learned that the sad reality is that physical therapists and occupational therapists, while essential, are certainly not urgent. This truth is made brutally clear across the industry as many of my colleagues are still no longer employed.
This motivated us to tighten our budget which will make us $30,000 richer. It helped us prevent being trapped by lifestyle inflation and allow us to continue to continue maxing out our retirement accounts.
In doing so, the money we invested in the stock market officially earned more than we did working for the first time! That’s when I finally felt the power of compounding interest.
Imagine by the end of the year, you realized that your investments brought in more money than you did all year. I’ll temper my expectations for future years though, in part, because this past year was a rarity for the stock market. It was one of the quickest and largest dips and recovery in history. In March, VTSAX, the primary fund we invest in bottomed at $54.50 per share and by the end of the year, it increased to $94.75 per share. That is a 75% return (nearly doubling your money) if you began buying in around that time.
Of course, I invested at the worst time last year. I front loaded my 401k and HSA to the max before the end of March 2020. Meaning, the 24,550 I contributed probably lost 20-30% of it’s value before increasing again. Ultimately, I could have had a much higher return if I just dollar cost average, but apparently, those who front load over time make a bigger return on their investments. That is because any given year, it is more likely for the stock market to increase than to decrease.
Regardless of your strategy, my progress is proof that someone, who doesn’t even having a 6-figure job, can begin to achieve wealth by investing consistently. If you haven’t begun investing yet, perhaps what you need to do is to break free from your fears of investing. If we can do it, so can you!
What are our plans to increase our net worth next year?
We plan on cutting our budget even further. Mainly by transitioning away from a traditional professionally monitored security system and implement a DIY self-monitoring system. This will make life so much easier for us and give us more options to monitor and secure our home while saving $430/year by our estimated calculations.
Of course, cutting our budget is only one side of the equation.
I plan to continue working at my full-time job until I can build up my referral sources and systems to grow my private practice.
I plan on making money online by developing personal development courses or finance based courses and products.
I would also like to grow my current monthly page views on Flexcents from 1,000 to 10,000 by the end of the year.
If you’d like to help me do that. Check out my archives (every article I’ve written) and share something with a friend or family member.
Learn More About Financial Independence
Toggle through to learn what Financial Independence (FI) means and the VITAL role it plays in allowing you to live your best life.
Art is the founder of Flexcents, a blog created in 2018 to help others reach their fitness and financial goals through sharing insights as a physical therapist, personal finance nerd, and self-directed investor.