Reader Case: From VP TO FIRE

Photo by Jp Valery on Unsplash

What time is it? It’s Reader Case Time!


First of all, congratulations on being financially independent! You did what so many people aspire to do but don’t have the courage to follow through with. I’m a little envious, but at the end of the day, I didn’t put the hard work in like you did. BUT I’M READY NOW!!

Up until January-ish of this year, I was the typical corporate brainwashed millennial. I wanted to climb the ladder and be a VP at my company. That very quickly changed and now I want nothing more than to get OUT! I watched the documentary and saw your interview and was absolutely inspired. I needed to find out more about you and your journey. I found your instagram which led me to buying your book and then reading everything on your millennial-revolution page and now here I am !!! I’m excited and nervous to embark on this journey but I’m so confident after seeing you do it that I can do it too!

Here is the information you outlined from your page that you can review and provide some insight on:

  • Your gross/net annual family income
    • Gross Income from W2: $284,000 (This is a very new number – I just recently got it this high – but because of that I think I can retire so much faster if I have some help!)
    • Net Income from W2: $209,937
    • I also just started renting out my house on Airbnb – it hasn’t taken off yet but my first month I got $5K (not taking into consideration expenses)
  • Your monthly family spending
    • Spending is kinda high now but it is changing very soon 
    • Needs (includes groceries, mortgage and utilities, car payment, insurance, etc.)
      •  $5000 ($3,500 is mortgage and utilities which should be covered by airbnb/rental income)
      • Note: I’m selling my car in the next 3 weeks – that will drop my expenses by $1,000 a month 
    • Wants (includes entertainment, gym membership, etc.)
      • Varies with the month but anywhere from $500-$1000 /month
    • Credit Cards / Financing Monthly Payment
      • $952/month (broken down by credit card in debt section)
    • Savings Monthly Amounts
      • 401K: $2,170
      • IRA: 576.46
      • Brokerage: $3,374
      • High Yield Savings Account: $3,374 (Should I be keeping this much liquid or investing more)
  • For any debts you have, please include:
    • Credit Card – financed fence installation for my house
      • Interest Rate: 0%
      • Balance: $2,613.14
      • Monthly Payment: $352 (done payment in June 2023)
    • Credit Card – expenditures to get house ready for airbnb
      • Interest Rate: 0%
      • Balance: $2,163
      • Monthly Payment: $300 (done payment in August 2023)
    • Credit Card – financed hurricane windows and doors for my house
      • Interest Rate: 0%
      • Balance: $17,201
      • Monthly Payment: $300 (needs to be paid off by January 1, 2024 – plan will be to snowball payment from fence and credit card to this and it will be paid off before termination of the promotional period)
    • Student Loans
      • Interest Rate: 3.4% – 6.8%
      • Balance: $48,471
      • Monthly Payment: $774 (whenever this starts up again)
    • Car Payment
      • Interest Rate: 3.09%
      • Balance: $26,962
      • Monthly Payment: $676 (selling car in december – this is going away)
  • Any fixed assets you have (house, car, etc.
    • House
      • Mortgage: $441K
      • Value: $592K
      • Interest Rate: 2.99%
    • Car
      • Interest Rate: 3.09%
      • Balance: $26,962
      • Monthly Payment: $676 (selling car in december – this is going away)
  • And investments or savings you have (cash, bonds, stocks, etc.)
    • 401K: $131,014
    • Roth IRA: $22,053
    • Brokerage – investing in Index funds: $16,295
    • Stocks from Work:
      • $3,312 (256 shares – vests on 11/20/22)
      • $3,312 (256 shares – vests on 2/20/23)
      • $2,199 (170 shares – vests on 5/20/23)
      • $2,212 (171 shares – vests on 8/20/23)
      • $3,935 (850 options – vests on 02/08/2024)
      • $2,368 (705 options – vests on 02/14/2025)
    • Cash Savings: $44,763
      • Emergency Fund: 14,264
      • Money from GM settlement with Lemon Law for my car: $10,500
      • Extra income being saved: $14,999
      • Trip Fund for traveling: $5,000

I know this was a lot of information but I’m super excited and I’ve done a lot of research so I have a lot of data. I have a budget sheet that I use every month to make sure I’m tracking my spending, I use a loan optimization sheet to pay down my liabilities the quickest way, and I’m using Personal Capital to track net worth and overall big picture. 

Any insight or thoughts on my current situation would be helpful! 

Thank you so much!

Best Regards, VP FIRE

It’s always surprising and gratifying when our weird little blog (and book) somehow causes someone to do a 180 and completely change their entire life trajectory, and this reader case is a great example of that. VP FIRE has gone from brainwashed corporate to millennial to FIRE enthusiast, and we couldn’t be happier!

That being said, VP FIRE has spent many years living large as a Big-Income-Big-Spender. Will she be able to reverse course and pivot her finances enough to make her FIRE dream possible?

Beats me. So let’s MATH THAT SHIT UP and figure it out!

Big Income, Big Spending

Let’s start by creating an overview of VP FIRE’s financial picture.

Summary Amount
Income $284,000 gross, $209,937 net
Expenses $5000 (fixed costs) + $1000 (variable) + $952 (CC) + $774 (student debt) + $676 (car) = $8402 per month, $100,824 per year
Investible Assets $131,014 (401k) + $22,053 (Roth) + $16,295 (brokerage) + $17,338 (stocks) + $44,763 (cash) = $231,463
Debt $21,977.14 (CC) + $48,471 (student loans) + $26,962 (car) = $91,410.14
House Value = $592,000, Mortgage = $441,000

So right away we can see there’s a LOT of stuff going on here. The monthly credit card payments initially made me throw up in my mouth a little, but when we dig into it a little bit, we realize that all her credit card balances are actually promotional cards sitting at a 0% interest rate, so holding these debts and not immediately paying them off does make some financial sense.

However, that means that we can’t do our usual analysis of taking her current monthly expenses and simply multiplying it by 12, then 25 as per the 4% rule. That would imply that she’s planning on paying these expenses forever, and we know that’s not true because she’s planning on paying the debt off by the time the 0% promotional periods end.

So we have to be a little more clever here.

Kill the Debts

First things first, we know she’s planning on selling the car. So the car payment is going away in December. So the monthly $676 expense goes away very soon. She’s also stated that getting rid of the car will drop $1000 of car-related expenses off her monthly budget, resulting in a net savings of $1,676 per month.

Next, we need to properly account for the credit cards. At her current payment schedule, the balances on the first 2 cards with a current balances of $2613.14 and $2163 should be paid off midway through 2023. She’s planning on redirecting that extra cash towards her third credit card in order to pay it off by January 2024.

However, this in and of itself won’t be enough to pay off the third credit card, which has an outstanding balance of $17,201. Between now and January 1, 2024 is about 13 months. If she continues paying her current amount on CC #3, while redirecting the payments of CCs #1 and #2 towards it as they get paid off.

So that means in the 13 months between now and January 2024, she will have put 13 x $300 = $3,900 towards that debt. Once June 2023 rolls around, an additional $352 of CC #1’s payment goes towards it for another 6 months (July – December 2023), so 6 x $352 = $2,112. Finally, in August 2023 CC #3’s payment can also be redirected towards it for 4 months (September – December 2023), or 4 x $300 = $1200. This will leave her with a remaining balance of $17,201 – $3,900 – $2,112 – $1,200 = $9,989.

In order to not pay whatever the exorbitant interest rate is on this remaining balance, VP FIRE should pay off the remaining balance in Jan 2024 with her savings, which is a big chunk of cash. BUT, going forward from this point, her expenses permanently drop because she no longer has to pay her car expenses or 3 credit cards every month.

Finally, the student debt. Should she pay it off?

In short, yes I think so. She has the income for it, and the interest rate on those loans is high enough that I’d rather take the guaranteed return on paying that off over the non-guaranteed return of investing in the stock market. Unfortunately, because she makes too much money she’s not eligible for President Biden’s one-time student loan forgiveness plan.

So we have lots of special stars and asterisks that we have to take into account for this analysis. Namely…

  1. Car will get sold and $676 monthly car payment goes away in December 2022.
  2. This also eliminates $1000 per month of car-related expenses.
  3. She will need to pay $9,989 in December 2023 to clear her remaining credit card balance.
  4. All credit card payments ($952) go away by Jan 2024.
  5. Student debt should get paid off once cash becomes available.
  6. Student debt payment ($774) goes away.

What do her numbers look like then?

Her FI number, which would normally be simply $8402 (monthly spending) x 12 x 25 = $2,520,600, is too conservative. We have to calculate it using her ongoing spending after retirement, not her current spending that includes all sorts of payments that will eventually go away. So that means using $8402 – $952 (CC) – $774 (student debt) – $1,676 (car) = $5000 as her monthly spending. That makes her FI target $5000 x 12 x 25 = $1.5M.

Her savings rate, also, is not as simple as simply taking income – expenses, because there are events that will happen that change that number.

In all the below calculations, I will be using her net monthly earnings, found by taking her net annual earnings ($209,937) and dividing by 12, which gives us $17,495.

In Year 1 (2023), her expenses will be $8402 – $1,676 (car) = $6,726, since she’ll have sold her car by then. That makes her savings rate $17,495 – $6,726 = $10,769 per month, or $129,228 per year.

Year 2 is when she should pay off her student debt, since she’ll have accumulated enough cash from Year 1 to cover it. That will eliminate her student debt payment from her monthly expenses.

So in Year 2 (2024), her expenses will be $8402 – $952 (CC) – $774 (student debt) – $1,676 (car) = $5000, since the other 2 debts will have dropped off. This makes her savings rate $17,495 – $5000 = $12,495 per month, or $149,940 per year.

And then it stays that going forward.

Oh, and we have to remember that there’s going to be a $9,989 debt repayment for the last credit card, as well as $48,471 for the student loan balance, so a total of $9,989 + $48,471 = $58,460 has to be repaid at the end of Year 2.

So what does all that look like in our projection table?

Year Balance Savings ROI Debt Repayment Total
1 $231,463.00 $129,228.00 $13,887.78 $374,578.78
2 $374,578.78 $149,940.00 $22,474.73 $58,460.00 $488,533.51
3 $488,533.51 $149,940.00 $29,312.01 $667,785.52
4 $667,785.52 $149,940.00 $40,067.13 $857,792.65
5 $857,792.65 $149,940.00 $51,467.56 $1,059,200.21
6 $1,059,200.21 $149,940.00 $63,552.01 $1,272,692.22
7 $1,272,692.22 $149,940.00 $76,361.53 $1,498,993.75

Just 7 years! Wow, what a difference getting rid of the car and eliminating her debts has on her finances! I love cases like this because even though VP FIRE spent most of her working life spending her money on stuff and accumulating debt, because she’s worked so hard at her career and amped up her earnings, she can catch up massively by simply redirecting the massive fire-hose of cash at her disposal and blow away her past mistakes.


There’s an interesting side piece to this case study I haven’t touched on yet, and that’s VP FIRE using AirBnb to monetize her primary residence. Now, I’m always a little hesitant to endorse this approach because as we know, being an AirBnb host is not passive. It’s a very active endeavour and I always tell people to treat AirBnb as a second full-time job rather than free real estate money.

There are also all sorts of numbers from her AirBnb hustle that we simply don’t have. What’s the occupancy rate? What’s the extra maintenance burden that comes from hosting people? If she uses AirBnb on her property full-time, does that mean that she needs to move out, or is she able to continue living at that address? We don’t know any of that because she’s just started.

So once again, we have to make an educated guess.

One month of $5000 income isn’t really a great basis for forming a financial projection, but if we define “success” in this project as AirBnb simply covering her mortgage, then I think that can form the basis of a relatively conservative projection.

She’s stated that of her $5000 monthly “needs” budget, $3500 of that could be covered by AirBnb/rental income. If we accept that as a possibility, then her monthly expenses would drop dramatically.

In Year 1, her monthly expenses would be $8,402 – $1,676 (car) – $3500 (AirBnb) = $3,226. This makes her savings rate $17,495 – $3,226 = $14,269 per month, or $171,228 per year.

In Year 2, her monthly expenses would be $8402 – $952 (CC) – $774 (student debt) – $1,676 (car) – $3500 (AirBnb) = $1500 a month. This makes her savings rate $17,495 – $1500 = $15,995 per month, or $191,940 per year.

Her FI target would also change, if AirBnb is something she’s planning on doing on an ongoing basis. This new FI number would be $1500 x 12 x 25 = $450,000.

You can already tell that this is going to have a major impact on her time-to-retirement, so let’s throw these into the table and see what it says!

Year Balance Savings ROI Debt Repayment Total
1 $231,463.00 $171,228.00 $13,887.78 $416,578.78
2 $416,578.78 $191,940.00 $24,994.73 $58,460.00 $575,053.51

Yikes, we weren’t kidding. According to the projections, if she can execute on her AirBnb project such that she can cover her mortgage, she could potentially be done by the time her credit cards are paid off, or just 2 years from now.

Again, I’m not convinced that this income is real or sustainable because in her own words, the $5k she got from her first month of AirBnb was “not taking into consideration expenses,” which is a huge red flag. But even if this side hustle falls apart and doesn’t work, at the very least she can fall back on her original 7 year FIRE timeline. Hopefully the “real” answer will be somewhere between those two numbers.


This case seemed deceptively simple at first, but upon actually doing it, it turned out to be surprisingly complicated because of the overlapping periods of debt repayment coming from her different loans. But after unravelling and modelling all that complexity, it turns out VP FIRE is actually in pretty good shape.

What do you think? Would you have done this analysis differently? Are any of my assumptions out to lunch? Let’s hear it in the comments below!

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