How does this work?
I initially scoped my plan using various online calculators like FIREcalc, CalcXML, and Engaging Data. But I’m generally skeptical of these “magic boxes” that give you answers without transparency. So, as Kristy Shen puts it, I decided to “math shit up.” To verify my numbers, I built some Google Sheets that pull data from Google Finance, ensuring the monthly VTSAX percentages are spot-on. I also used the mortgage function in Google Sheets to accurately track my mortgage amortization schedule.
My original plan targeted financial independence (FI) by June 2023. I picked 2023 because it was the first year where my projected investment returns seemed to comfortably cover my spending. I’m one of the lucky ones who actually enjoys my job and company, so I was okay with staying past June 2023. However, in the New Deal section of the My Journey page, I shared the story of my dad’s unexpected death the day after turning 65. Leaving my job while things are still going well is my way of honoring my father. I want to visit the places we always dreamed about when I was a child. Dad and I both loved traveling and experiencing new places, so if I have the chance he didn’t get, I’m taking it!
Plan & Goals
Investment Accts – These include monthly contributions to my 401K, HSA, and taxable brokerage account.
Home Equity – I’m gradually renovating my house, which is located in a sought-after neighborhood in a high-cost metropolitan area. Since I bought the property in 2015, it has appreciated by nearly 11% annually on average. This appreciation doesn’t even take into account the renovations I’ve done, so the actual equity value is likely $100k to $150k higher than my current estimate. Additionally, in the below table I am automatically deducting 10% from the equity value to account for future closing costs and deducting long-term capital gains on the equity which exceeds the $250k federal exclusion amount.
Investment Tracker
I’m primarily tracking my investments against VTSAX, though I’m diversified across several funds. I’ve noticed that my overall returns tend to average out similarly to VTSAX, so I use it for simplicity. Occasionally, I update the investment account balance if it deviates too much from reality.
For past returns, I calculate the actual change in VTSAX from the 1st to the last day of each month. For future projections, I estimate returns based on a 7% annual growth rate. I aim for 7% annually, rather than the S&P 500’s average of 9-10%, to factor in an assumed 2-3% annual inflation.
Real Estate Tracker
Growth % – I explain my housing situation in the Real Estate section of Stan’s plan on the My Journey page. I’m estimating 5% annually however my home has averaged over 10% appreciation per year since I purchased it in 2015. Check out the My Journey page for the full plan and justification.
Google Mortgage Function – The mortgage column is calculating the actual principal balance over time using the PPMT Function. The mortgage is a 30yr fixed on a VA Loan at 2.5%.
Net Worth Tracker
Net Worth Estimate – The Net Worth Estimate column combines the Equity column from the Real Estate Tracker and the Investment Accounts column from the Investment Tracker. I’ve also included a formula in this column that applies a 15% tax on equity amounts exceeding the $250k tax-sheltered limit.
Personal Capital (Logic Check) – As I mentioned at the beginning of this page under the heading “How does this work?” I’m generally distrustful of magic boxes that provide plans or results without transparency. However, everyone can make mistakes, so I use Empower Personal Capital to cross-check my calculations. So far, my figures usually align within $3-5K, which gives me confidence in my estimates!