September 2021 Portfolio Update
Friday 1st October 2021
Hitting my “Initial FI Number”
When I first got started on my FIRE journey, I was under the false idea that €200k was going to be more than enough to retire on! I had the logic that if I could withdraw 1% per month, that would give me an income of €2,000 a month, which would cover my basic expenses.
I thought it would take me at least 5 years to hit my FI number back in 2018. In the end, it has taken me a little over 3.5 years - I will likely hit €200k in October.
I am pleased to say that hitting the €200k milestone is actually a great feeling. It has given me the freedom to start focusing more on lifestyle design, rather than continuing to add to my portfolio so aggressively. The power of compounding interest will really start to be noticeable now, and I know I have the option to reduce my workload and build a better lifestyle for myself, knowing that even if I didn’t add another cent to my portfolio, it will compound over time naturally.
Infact, I have actually taken the first step towards this. For the last 18 months or so, I have been working incredibly hard. I have been averaging over €10k a month in income and for me to do that has been me working on multiple projects and working some very long days. I have finally reached a point where I feel the need to continue to do this is no longer required. With a portfolio of €200k, compounding will now be a major factor moving forward.
When I also consider our low cost of living, little to no debt and owning 50% of our primary residence (which I don’t factor in when looking at my FI number), our overall situation is pretty strong. When I started to consider withdrawal rates, and reaching various alternative FIRE strategies, there were a few things that really stood out. One in particular was an approach called Flamingo FIRE. Flamingo FIRE is simple - save up half your FI number, then move to part time work and let compounding grow the other half.
This part time work is referred to as “semi-retirement”. Many of you may recall back in 2018-19 I did this for around 18 months. It was one of the best time of my life, and a period that I have been greatly missing. The problem when I did it in 2018-19 is that I didn’t have a significant portfolio to back up what I was doing - this has now changed!
Back in 2018-19, I was working 3-4 hours a day, which covered my expenses and still allowed me to put a small bit away in my portfolio. I am pleased to say that in September I started to reduce my workload and now consider myself to be in the “semi retired” phase of Flamingo FIRE.
What that will look like, and how long this period will last, I am yet to determine, but I do know that the "semi-retirement" phase will play an important role in my own FI journey. "Semi-retirement" will allow me to work on software development projects that I enjoy, without that feeling of having to slog away working 40 hours a week or more. It will give me enough freedom to work some days, and not others, without really having much pressure because to sustain our cost of living as a software developer is actually not that difficult at all.
So, for now, I am adopting an approach that I call “Flamingo FIRE, Plus”, which is where I am moving to the semi-retirement phase of the FIRE movement, but still contributing a small monthly amount to the portfolio to ensure that I will likely be able to retire fully within 10 years. This feels like a better strategy than continuing to work full time for the next 4-5 years ago - taking it easy from here and allowing myself to cruise to FI seems a far easier approach.
It’s been a long road over the last 3.5 years or so, but I am excited to be at a point where I feel the accumulation phase of my FIRE journey has ended and I can start to move into a consolidation phase.
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