- Late Start Earner
2022 was quite the year, one characterized by tremendous personal growth (with all its ups and downs) and ending in profound gratitude. I now feel far more empowered in my personal life to intentionally live a value-filled life of purpose grounded in core values that I've relied on for decades, while also cultivating a new set of values and principles that I had previously dismissed. This clearer vision, paired with declines in the stock market (especially in tech), rising inflation, and a depressed macroeconomy, has also helped me reset expectations around some of my financial independence goals, and probe deeper behind the "why" of FI.
2022 goals -- How did I do?
Some of my beginning of year goals ended up being totally irrelevant after a relationship ended in the summer. In 2022, I achieved several main financial goals and spent the remainder on home renovations.
✅ Paid my 2021 Taxes
✅ Maxed out my Retirement Contributions (Pre-Tax 401k, Roth IRA, After-Tax Mega Backdoor Roth)
✅ Added to my Emergency Fund (+$10K)
✅ Did not spend my stock grants --> kept them in taxable investment accounts
✅ Paid off my land loan debt
🛠 Completed home renovations and repairs: home furniture redesign, bathroom renovation, cabin renovations (flooring, kitchenette, dining table)
Below are some snapshots from my Mint account of spending by category and month by month. It's interesting to review, but I find it difficult to use as a benchmark for expected spending in the future since it reflects my life in 2022 and special circumstances that are unlikely to repeat in the future.
I am no longer in a relationship where I am fully financially supporting my partner.
In August 2022, I made a lump-sum of $13k towards my land loan debt.
2022 Net Worth
My net worth is up ever so slightly compared to 2021 since my debt reduction and retirement contributions outpaced the stock market declines.
2022 Investment vs. Spending
Mint.com has a view of your last 12 months of spending. This allowed me to ask myself, if I were to spend the exact amount I did in the last 12 months, how much would my total investments cover? A rule of thumb is that you need 25x your annual spend (assuming 4% safe withdrawal rate). I was pretty pleased to see that in spite of the stock market declines, my rough investment-to-spending ratio still trended up to 2.7x since my annual spend in the post-breakup period declined. This will probably be a better barometer for me to check over the next few years, since it ties in spending/lifestyle decisions with the pace of progress towards FI. I'd love to get to a 5x factor by 2025!
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