In Part 1, I was about to turn 30 with about $350,000($461,321 in 2024) invested. My expenses were around $40,000($52,722 in 2024) a year. At a 3.25% withdrawal rate, I would need about $1,400,000($1,845,282 in 2024) to be financially independent. That means I was about 25% of the way there, I was officially in the middle of my journey.
I was so was naïve.
I was 30, living in a very old studio apartment that I tolerated, eating lunch and dinner for free at work most days. I had no idea how much I truly needed to be financially independent in the future. What if I wanted to own my home, get a dog or two, get married and have kids, or own a car? I had no idea how close I was to the end, I just knew it was somewhere in the middle. Knowing all this, I stopped thinking about financial independence. I stopped visiting finance websites and forums. I focused on my hobbies, relationships, and exploring new things.
The middle. Some people call it "the boring middle" because you're just waiting for your money to grow. It's not as exciting as the beginning, not as liberating as the end. I never understood this phrase, why are your finances a source of entertainment? If you ever find yourself thinking "this is the boring middle," try re-evaluating your priorities. It isn't the middle that's boring, it's your life.
Real estate, the myth
The rent vs buy calculator said it totally made sense. Yes, I'd be paying more than my studio, but I didn't enjoy living there. I was finally ready to like the place I lived. I bought a condo.
This wasn't a mistake at the time. I spent about four years in it when everything was going just as expected. My equity was growing (slightly), the value was rising (slightly), the tax deductions were working (kind of). My expenses grew to about $60,000($76,761 in 2024), pushing my FI number closer to $2,000,000($2,558,684 in 2024). I justified it because I really was happier in my condo and it could eventually become profitable if I rented it out, right?
Then, a tiny virus started a global pandemic. Condo values fell and single-family home values rose. People wanted to move out of the city center to more spacious and cheaper places for remote work. I cursed the conventional wisdom of parents and real-estate podcasters world-wide1.
Taking big swings
Work-wise, I would join and leave a few small startups, gathering private equity along the way. Some equity died with the startups, worthless. But some paid off, and I get another nice windfall of $200,000($255,868 in 2024). All of it goes straight into my investments.
I'm shoveling more money into the furnace every year, but this time, the compounding engine is working. My net worth blows past $1,000,000($1,252,656 in 2024) when I'm about 33. My money makes more money than I contribute. I feel like I'm on an escalator, slowly rising toward my destination with little effort. My contributions feel like walking up the escalator, it's faster but unnecessary. The escalator gathers speed every year, as it approaches the top I prepare to jump off or risk getting sucked in to that little gap. Escalators are terrifying, I don't like this analogy anymore.
Today, there is no way I can rent out my condo for positive cashflow. I also cannot sell it for a profit, in fact I will lose money. It's possible that I could turn a profit in a decade or so, but I really don't want to hold this bag long enough to find out. ↩
