Welcome to our FatFIRE Interview Series! In this blog, we delve into the stories of individuals who have achieved or are on the path to achieving FatFIRE—an ambitious financial independence and early retirement goal characterized by a high level of financial security and luxury. FatFIRE stands for “Financial Independence, Retire Early” with a focus on a comfortable, often lavish lifestyle funded by a substantial nest egg.
Through these interviews, we aim to uncover the diverse strategies, mindsets, and experiences of those who have navigated the journey towards financial freedom. Whether you’re an aspiring FatFIRE enthusiast or simply curious about how others have reached this milestone, these conversations offer valuable insights and inspiration.
Join us as we explore the unique paths, challenges, and triumphs of FatFIRE achievers, and discover what it truly takes to attain financial independence on your own terms.
If you would like to be featured in one of our interviews, please feel free to reach out.
Can you tell us a little about yourself, your family and your background?
My name is Michael. I am 46-year-old, and I work as a software engineer in Raleigh, North Carolina. I grew up in a middle-class family in the suburbs and developed a passion for computers at an early age. My wife, Jessica, is a public relations manager, and we have a 13-year-old daughter, Lily, and a 10-year-old son, Sam. We enjoy spending time outdoors, going on road trips, and cooking together as a family.
What is your current occupation and income?
I work as a senior software engineer at a tech company, earning around $150,000 annually. Jessica earns about $90,000 a year in her role as a public relations manager. Our combined household income is approximately $240,000 per year.
What is your current net worth, and how is it broken down?
Our current net worth is around $2.6 million. This includes around $1.4 million in taxable investment accounts, $700,000 in retirement accounts, $400,000 in home equity, and $100,000 in cash.
What inspired you to pursue FatFIRE?
The inspiration to pursue FatFIRE came from wanting to gain more control over our lives and have the flexibility to spend more time with our children. I realized that financial independence could provide the freedom to choose how we spend our time, pursue our passions, and enjoy a higher quality of life without being tied to a traditional 9-to-5 job.
How do you define financial independence, and what was your target number for FatFIRE?
Financial independence means having enough passive income to cover our living expenses without needing to work. Our target number for FatFIRE was $2.5 million. This amount would allow us to maintain our current lifestyle and provide a comfortable buffer for unexpected costs.
What steps did you take to start your FatFIRE journey?
We first focused on maximizing our income by pursuing high-paying career opportunities and investing in our education and skills. This included obtaining advanced degrees, certifications, and continuously upskilling to stay competitive in our respective fields. We also took on side hustles and freelance work to boost our earnings further.
Simultaneously, we adopted a strategic approach to saving and investing. We lived below our means, prioritizing saving a significant portion of our income. We also sought advice from financial advisors and kept ourselves informed in order to make good investment decisions.
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What investment strategies did you use to build your wealth?
Our investment strategy involved low-cost index funds and ETFs to ensure full market exposure and minimize fees. Most of our investments are in Vanguard ETFs. Additionally, we focused on maximizing contributions to our retirement accounts, such as 401k and IRAs, and took advantage of employer matching programs.
How do you balance maintaining a high savings rate with enjoying life along the way?
We focused on identifying what truly brings us joy and aligning our spending with those values. By cutting out unnecessary expenses and avoiding lifestyle inflation, we could save more without feeling deprived.
We also budgeted for fun and meaningful experiences, such as travel, hobbies, and dining out, ensuring these activities fit within our financial plan. Additionally, we embraced frugal yet fulfilling alternatives, like hosting gatherings at home or exploring local attractions. By striking a balance between disciplined saving and intentional spending, we managed to enjoy the present while staying committed to our long-term FatFIRE goals.
Can you share a particularly rewarding moment or milestone in your FatFIRE journey?
One rewarding moment in our FatFIRE journey was when we reached the milestone of paying off our mortgage. Achieving this not only provided a tremendous sense of financial freedom but also significantly reduced our monthly expenses. This milestone marked a major step towards our FatFIRE goals, as it allowed us to redirect funds that previously went towards mortgage payments into further investments and savings.
Celebrating this achievement, we felt a sense of accomplishment and relief. It validated our disciplined approach to financial management and reinforced our commitment to the path we had chosen. This moment was a powerful reminder that with perseverance and smart financial strategies, reaching significant financial milestones is possible and incredibly gratifying.
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How has your perspective on work and career changed since achieving or pursuing FatFIRE?
Since pursuing FatFIRE, our perspective on work and career has shifted significantly. Initially, our primary focus was on maximizing income and career advancement to accelerate our financial goals. However, as we made progress towards FatFIRE, we began to prioritize work-life balance and personal fulfillment over purely financial gains.
With a more robust financial cushion, we felt empowered to take risks, such as transitioning to more fulfilling roles, or even reducing our working hours to spend more time on passions and with loved ones. This shift allowed us to view work not just as a means to an end, but as an integral part of a balanced and meaningful life, enhancing both our professional and personal satisfaction.
What advice would you give to someone just starting their FatFIRE journey?
For someone just starting their FatFIRE journey, my first piece of advice would be to set clear, achievable financial goals and create a detailed plan to reach them. Understand your desired lifestyle, calculate the amount you’ll need to sustain it, and establish a timeline for achieving FatFIRE.
Focus on maximizing your income by investing in education, skills, and career opportunities, while also seeking additional income streams through side hustles or passive income. Prioritize saving a significant portion of your income and invest it wisely across diversified assets like stocks, real estate, and index funds. Live below your means to increase your savings rate without sacrificing quality of life. Stay informed and consider seeking advice from financial advisors. Remember to balance your journey by enjoying the present and celebrating milestones along the way. Patience, persistence, and planning are key to successfully reaching FatFIRE.
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What lifestyle changes have you made since achieving or pursuing FatFIRE?
Since pursuing FatFIRE, we’ve made several lifestyle changes to align with our financial goals and values. One major change has been adopting a more minimalist approach, focusing on quality over quantity. We’ve become more mindful of our spending, cutting out unnecessary expenses and prioritizing experiences and items that truly bring us joy and value.
We also embraced healthier and more sustainable habits, such as cooking at home more often, which not only saves money but also improves our well-being. Additionally, we made a conscious effort to surround ourselves with like-minded individuals who share similar financial and lifestyle goals. This supportive community helps us stay motivated and inspired on our journey. These changes have allowed us to enjoy a more fulfilling and balanced life while staying committed to our FatFIRE objectives.
How do you plan to spend your time and resources in early retirement?
We plan to spend our time and resources on activities and experiences that bring us joy and fulfillment. Travel is high on our list, as we want to explore new cultures and destinations, both near and far. This will give us the opportunity to immerse ourselves in different environments and create lasting memories.
We also aim to invest more time in our hobbies and passions, whether it’s pursuing creative endeavors, engaging in outdoor activities, or learning new skills. Volunteering and giving back to the community are also important to us, and we look forward to dedicating our time and resources to causes we care about. Additionally, we plan to maintain our health and well-being through regular exercise, healthy eating, and mindfulness practices.
How do you ensure that your FatFIRE plan is sustainable in the long term?
We prioritize maintaining a large emergency fund to handle unexpected expenses without dipping into our investment principal in a down market. Additionally, we practice conservative withdrawal rates. We’re aiming for a SWR of around 3-4% annually, to ensure our savings can support us throughout a potentially lengthy retirement. Lastly, keeping our skills and networks active allows us the option to generate additional income if needed.
What future goals or projects are you excited about now that you have more financial freedom?
With more financial freedom, we’re excited about several future goals and projects. One major goal is to embark on extended travel adventures, exploring destinations and cultures we’ve always dreamed of experiencing, whether it’s through immersive long-term stays or exploring remote locations.
We’re also enthusiastic about investing more time in hobbies and personal passions, such as taking up new outdoor activities, learning new crafts, or delving into culinary experiments. Additionally, we plan to engage in philanthropic efforts by supporting and volunteering for causes we care deeply about.
Lastly, we’re looking forward to creating a more enjoyable and enriching daily life by enhancing our living space, investing in home improvements, or even exploring new recreational activities that bring us joy and satisfaction.
