Reader Case: Entrepeneurs Closer to Early Retirement Than They Thought

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Since our inbox is overflowing with reader cases, now’s the time for another one!

This one caught my eye because of the mention of “home boners.” HA! This person clearly understands how to get my attention. So without further ado, here we go:


After several entries on the internet’s numerous FIRE Calculators, we are a bit shocked at how soon (to us at least) we might be for retiring early – they range between 10 to 15 years.  I’ll be honest, we’re a bit reluctant in believing the calculations, but it certainly has sparked some inspiring conversations over the past week – could early retirement really be within a fifteen year reach?

If this information helps, hubby and I are partners/owners of a business with no employees.  Our income is expected to rise with inflation and it will likely continue strong for the next 5+ years – until we choose to pursue other ventures and/or make it more of a part-time gig.  

Our Data –

  • Gross Annual Income: $84,000.
  • Monthly Family Spending: $3,300. 
  • Annual Family Spending: $40,000. (rounded up)
  • Debts: NONE!
  • Fixed Assets: 2 CARS (owned in full)
  • Savings and Investments:
    • Total CASH Savings: $130,752.
      • Emergency Funds: $26,000. (7 months expenses)
      • House Savings: $47,000. 
        • $63k Goal for 30% of $210k home (need ~ $16k more)
      • To Be Invested in 2023: $57,752. (auto-invest schedule)
        • We had $150,000+ in liquid cash at the end of 2021.  Chose to follow the advice to spread the investment of the funds over a two years vs. investing the entire lump sum
    • Total Investments: $165,535.
      • Personal Capital pretty much shows us having a 100% Equity Portfolio
        • Allocation will likely change once we finalize the transfer of our AUM to our self-directed Vanguard account
          • We are still very new to investing and will adjust our allocation as we continue to learn – only invest in what you understand, right?
      • Investments Breakdown –
        • 2 HSA’s: $16,694. (fully funded each year)
        • 2 Roth IRA’s: $56.517. (fully funded each year)
        • Taxable Account(s): $92,324

Our Questions –

  1. Are we really within a possible fifteen year reach of FIRE?  
    • When we did the FIRE calculators, we included the $57,752 that is going to be invested this year AND the full investment of our remaining $44,440. from our annual gross income (if we should not have included those, please adjust the figures accordingly)
    • We currently have the $57k on an auto-invest schedule
    • The FIRE CALC inputs also take into consideration that we do not continue saving for a home!
  2. Ah, you noticed the House Savings.  How much of a super charge will investing the current $47,000. give us in reaching FIRE, sooner?  
  3. Is considering a purchase of a home worth keeping our sights on considering the following:
    • After moving in with my in-laws (we vibe well together), we spend $750./month on rent and utilities, combined.  However, will, or should (let’s be honest), this living scenario continue for another 2+ years?  That’s TBD. 
    • We absolutely understand the true value of owning a home and we aren’t fanciful people who keep up with the Joneses, we definitely won’t develop House Boners (ha!), and are/will be savvy thrifters for home goods, leaving the rest for absolute needs (i.e. maintenance, repairs, etc.).  Plus, we own furniture already, so the most we don’t need much elseWe also want to follow Financial Samurai’s 30/30/3 Home Buying Rule as well as Millennial Revolution’s (hey!) advice on buying a home as if you’ll be able to pay it off in 5-7 yearsThen there’s House Hacking!  If we need to, we’re willing to rent out a spare bedroom to capitalize on our savings!
    • Considering the above, those figures at our current income feel far too high for our comforts, so we gave ourselves a conservative approach at $70k GROSS annual income, instead of our current $84k, for the following figures to try to adhere to:F.S. 30/30/3 Rule -Monthly Mortgage MAX: $1,500 (less is possible on a deal property or House Hack situation)30% of Purchase Price: $63,000. Purchase Price MAX: $210,000.M.R. 5-7 Year Payoff Monthly Savings: $2,000. – $2,800.
    • Location for Reference: Florida
      • Monthly Rent (per listing research): 
      • $1,250+ for a decent apartment$2,000+ for a house, ouch.
      • House Price Reality: a $210k home in our area is slim to none in the current market without it needing updating and/or significant repairs, but there are some that are rather decent that pop up every now and again, but time can be on our side with our current living situation, thankfully
  4. Any other advice for us?

That’s it!  Hopefully we did the inputs correctly and are on a solid path to reaching F.I. within fifteen years, but if we aren’t, well, we will figure out a way to get there.

I appreciate all of your time and efforts given to Millennial Revolution, it’s truly a gem in the FIRE community!  And thank you for reading over our situation. 



Interesting! Instead of the usual 9 to 5 jobs, these readers own their own business—and without the hassle and overhead cost of managing employees. I’m fascinated by unconventional earners, especially given how work has evolved after the pandemic.

OK, so as usual, we have to pick out the important inputs from our reader’s wall of text. They’ve given us a fairly detailed breakdown of their cash, including different buckets for “soon to be invested” and “house savings,” all of which I’m going to lump into an overall cash number that we’re going to model as if it’s invested all at once. Otherwise, the analysis just gets too unreadable.

So, looking at this couple’s numbers, we can summarize their financial situation like this:

Summary Amount
Income $84,000 (gross)
Expenses $40,000
Debt $0
Investable Assets $130,752 (cash) + $165,535 = $296,287

At first glance, their numbers look decent. Given that they live in Florida, putting their gross income into a tax calculator, we can estimate a net income of $71,013. Their real net income number is likely higher since they own their own business and can write off expenses, but for illustration purposes, we will use this conservative number. They can redo the calculations with their updated numbers themselves later.

Given their spending and their net income, they’re savings rate is ($71,013-$40,000) / $71,013 = 44%, which is quite good! And using the 4% rule of thumb, they would need $40,000 x 25 = $1,000,000 to reach financial independence. Given their existing net worth and savings rate, this would take…

Year Balance Contributions ROI (6%) Total
1 $296,287 $31,013.00 $17,777.22 $345,077.22
2 $345,077.22 $31,013.00 $22,565.41 $398,655.63
3 $398,655.63 $31,013.00 $25,780.12 $455,448.75
4 $455,448.75 $31,013.00 $29,187.71 $515,649.46
5 $515,649.46 $31,013.00 $32,799.75 $579,462.20
6 $579,462.20 $31,013.00 $36,628.51 $647,103.72
7 $647,103.72 $31,013.00 $40,687.00 $718,803.72
8 $718,803.72 $31,013.00 $44,989.00 $794,805.72
9 $794,805.72 $31,013.00 $49,549.12 $875,367.85
10 $875,367.85 $31,013.00 $54,382.85 $960,763.70
11 $960,763.70 $31,013.00 $59,506.60 $1,051,283.30

Around 11 years!

So, their initial estimate of reaching FI in 10-15 year is accurate.

Living With In-Laws

That being said, the thing that’s giving me pause about their FIRE plan is this statement:

After moving in with my in-laws (we vibe well together), we spend $750./month on rent and utilities, combined.  However, will, or should (let’s be honest), this living scenario continue for another 2+ years?  That’s TBD.”

Vibing well with your in-laws? Riiiigggght. If there’s anything I know about living with in-laws, it consists of a lot of back-handed sniping and emotional blackmail, eventually culminating in an attempted poisoning and/or a kung-fu sword-fight in a bamboo forest.

Hmm…I might be watching too many Korean dramas lately.

ANYHOO, let’s take them at face value and assume that they’re telling the truth *sarcastic nodding*. One of the reasons why their cost of living is so low is because they are saving money by living with their in-laws.

If this gravy train of a situation changes, that would drastically alter their numbers.

Based on their research, they’re saying rent would cost them at least $1250 per month if they were to move out. That would increase their cost of living from $3333 per month to $3333 – $750 + $1250 = $3833 per month or $45,996 annually.

How does that change their FI number and time to FI?

Their FI number would increase to $45,996 x 25 = $1,149,900. Their savings rate would decrease to ($71,013-$45,996)/ $71,013 = 35% and their time to FI would increase to:

Year Balance Contributions ROI (6%) Total
1 $296,287 $25,017.00 $17,777.22 $339,081.22
2 $339,081.22 $25,017.00 $21,845.89 $385,944.11
3 $385,944.11 $25,017.00 $24,657.67 $435,618.78
4 $435,618.78 $25,017.00 $27,638.15 $488,273.93
5 $488,273.93 $25,017.00 $30,797.46 $544,088.38
6 $544,088.38 $25,017.00 $34,146.32 $603,251.71
7 $603,251.71 $25,017.00 $37,696.12 $665,964.83
8 $665,964.83 $25,017.00 $41,458.91 $732,440.74
9 $732,440.74 $25,017.00 $45,447.46 $802,905.20
10 $802,905.20 $25,017.00 $49,675.33 $877,597.53
11 $877,597.53 $25,017.00 $54,156.87 $956,771.41
12 $956,771.41 $25,017.00 $58,907.30 $1,040,695.71
13 $1,040,695.71 $25,017.00 $63,942.76 $1,129,655.47
14 $1,129,655.47 $25,017.00 $69,280.35 $1,223,952.82

Slightly over 13 years.

So, moving out of their in-law’s home would increase their time to FI by around 2 years. Not bad, but still something to keep in mind.

To Buy or Not To Buy

They also mention they want to buy a house. Given that interest rates in the US will continue to go up and housing prices will continue to fall, buying now would be catching a falling knife.

But what if they were to buy one in the future? When interest rates stabilize and they can afford one within their means? Will the math work out?

Let’s find out.

Given that 30-year mortgage rates are currently north of 6% and continuing to rise, it makes no sense for G to invest while having a mortgage. They likely won’t be able to beat the interest rate with returns in the market.

They are looking to buy a $210,000 home, which they say is very unlikely in their area, but since they’re in no rush in buy and have the luxury of time, let’s say they get lucky and find something within this price range.

Buying may seem like a cost beneficial idea at first, as it eliminates their rent, but in reality, even if they buy the place in cash, they will have carrying costs like maintenance, insurance, property taxes, etc that they will be paying for the rest of their lives. On top of that they will have to pay one-time costs like lawyer fees, closing costs, home inspection, etc.

So conservatively, assuming they’ll be paying 1% in maintenance costs, 1% in property taxes, $100/month in insurance, that’s a carrying cost of $210,000 x 2% + $100 x 12 = $5,400/year or $450/month.

Their current $750 rent includes utilities, but that won’t be the case for the house. So they’ll have to cough up at least another $100/month for utilities, bringing their monthly housing costs up to $550. This means they’ll actually only be saving $750-$550 = $200/month by buying the house. Most of their current net worth of $296,287 will need to be trapped in the house until they sell and they will lose the opportunity cost of investing it in the stock market. However, they will be able to put $200/month extra towards their yearly savings.

Their FI number would also change slightly, since they will need $200/month less, which beings their yearly spending to $37,600 and their FI number to $37,600 x 25 = $940,000.

So, how does that change their time to FI?

Year Balance Contributions ROI (6%) Total
1 $86,287 $33,413.00 $5,177.22 $124,877.22
2 $124,877.22 $33,413.00 $9,497.41 $167,787.63
3 $167,787.63 $33,413.00 $12,072.04 $213,272.67
4 $213,272.67 $33,413.00 $14,801.14 $261,486.81
5 $261,486.81 $33,413.00 $17,693.99 $312,593.80
6 $312,593.80 $33,413.00 $20,760.41 $366,767.21
7 $366,767.21 $33,413.00 $24,010.81 $424,191.02
8 $424,191.02 $33,413.00 $27,456.24 $485,060.26
9 $485,060.26 $33,413.00 $31,108.40 $549,581.66
10 $549,581.66 $33,413.00 $34,979.68 $617,974.34
11 $617,974.34 $33,413.00 $39,083.24 $690,470.58
12 $690,470.58 $33,413.00 $43,433.01 $767,316.59
13 $767,316.59 $33,413.00 $48,043.78 $848,773.37
14 $848,773.37 $33,413.00 $52,931.18 $935,117.55
15 $935,117.55 $33,413.00 $58,111.83 $1,026,642.38

Slightly over 14 years.

Even though, in the best-case scenario, they are saving $200/month, because most of their net worth is locked in the house, their time to FI gets extended from the current 11 years to 14 years, an increase of 3 years.

So, they will need to decide whether it’s worth it and this is only in the best case scenario that they can even find a house for $210,000 that doesn’t need major repairs or renovations and their carrying costs don’t exceed the average.

Either way, whether they buy the house or not, whether they have to move out and rent their own place, because their spending is low, they should be able to reach FI in 11 to 15 years, so unless their situation changes drastically, they are in good financial shape.

What do you think? Do you think G will be able to become FI in 11-15 years? Do you think they should buy a house? Let’s hear it in the comments below!

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