Saturday, October 8, 2016

Am I On Target To Achieve Financial Independence By 35?

The last time I did a review on this was back in 2014 (here) so it's been a while since then.

I started writing this blog in Dec 2011 where the objective is to document the journey towards the path to financial independence at the age of 35. I gave myself a stretch 10 years goal where I'd like to be by the time I am 35 years old. You can see them below.

Original Projection
YearYearStarting CapitalCumulative Annual Capital Injection Dividends on Starting CapitalTotal Yearly Dividend PayoutMonthly Passive Income

There were a few questions from readers on some of the numbers I put above so I'd try to answer though obviously it has been a long time ago and my memory could fail me.


First of all, the starting capital I had put out there is $100,000. Obviously, I did not suddenly pop out and have that magical $100K right away in my pocket. I started working in 2007 but only started my investing in 2011 so technically that was the amount I put away and save and won from my punting of occasional soccer betting earlier in my days. Those were the good old days I trained on my adrenaline rush, patience and discipline which comes in handy these days.

The annual capital injection of $60k was a bit of a stretch there and until today, I can hardly ever achieve that sort of capital injection in one single year as you will see more later below. I work backwards and found out back then that $60k was the magical number and hence simply put it there for projection purpose. Heck, life was different when I was single back then and today I am married with 2 kids (one on the way) and the sole breadwinner on the household. The $60k capital injection was just a dream. It was never going to come close to realization.

I assume 6% dividends on my principal + capital injection every year and have this compound for the next 10 years. I did not assume for any other capital gain return from the market back then, so it is totally build on the assumption of a 6% return, mainly from the dividends and reinvested.

10 years is a stretch bitch goal that I set for myself knowing in mind that it's almost impossible to reach there. Still, I wanted to push and stretch myself very hard knowing how my lazy mind works. If I gave myself a longer timeframe of achieving the target at the age of 65, I'd be less motivated to push myself and do well in human capital, which I did in my earlier days. The painpoint factor of working at the big 4 accounting firm motivates me to run away from the rat race and start pushing my dream comes true. I was very motivated to succeed back then. It is not a choice. It is in my hands to do it.


I'll fast forward the timeframe to where I am today to see if I am anywhere close my original goal. I'll go through one by one.

On the human capital front, I did better today than I expected back then where I envisioned myself to be. I knew that this was going to play a crucial role if I were going to make it for early financial independence. My fellow blogger, Chris, talked about empathy and Cinderella Story in his recent article but I don't think I would fall under that category. The closest I can think of is having a PSLE score of 186 and going to a normal stream for my secondary but that was never close to a cinderella story. I've heard stories of people who came back to succeed in their career even though they were not intellectually smart but luck plays a part in their success. I think I will attribute that to my story. Luck definitely play a crucial factor in where I am today.

On the capital injection front, the closest peak I came saving in a particular year was somewhere between 2014 and 2015. Those were the times when both my income and circumstances hit a really nice spot at the peak. Since then, expenses have creeped up slowly due to increased family expenses and they have risen a lot faster than my increase in income. I am definitely on the trend down these days.

On the returns from investment, I was fortunate to earn some positive returns from the market since the time I have invested in 2011. Even in a bad year where the stock market is down, I had managed to stay positive and survived the downturn. Until today, it is really difficult to quantify if it is due to skills or luck. I really think I have to count my lucky stars for that. 

Actual / ForecastYearCapitalCapital Injection ($) (incl. savings and dividends)Returns from stock market (%)
ActualDec-07- 10,000 0.0%
ActualDec-0812,500 15,000 0.0%
ActualDec-0934,000 15,000 0.0%
ActualDec-1058,000 25,000 0.0%
ActualDec-1192,666 30,000 3.29%
ActualDec-12133,840 40,000 40.27%
ActualDec-13219,130 45,000 19.76%
ActualDec-14279,780 55,000 11.65%
ActualDec-15360,600 55,000 5.49%
ForecastDec-16450,000 50,000 14.5%
ForecastDec-17545,000 45,000 10.0%
ForecastDec-18644,500 45,000 10.0%
ForecastDec-19753,950 45,000 10.0%
ForecastDec-20874,345 45,000 10.0%
ForecastDec-211,006,780 45,000 10.0%
ForecastDec-221,152,457 45,000 10.0%

Next Few Years Ahead

The next few years ahead is going to be tough.

Based on the review I have on my current circumstances, I can already envision that I will fail to meet my original target and have to stretch them by a further 2 years earliest. That will mean 37 years earliest based on my projection

In terms of financials, I have previously mentioned that income has peaked but my expenses are still going up, so that will mean a lot lower savings in the coming years and lesser bullet to inject for the investment.

I could draw up different scenarios to speed up on the income front like having my wife back to the workforce but I thought it's better to have her handle the household and slog it out myself. We are doing fine financially and I just need to ensure to reduce those silly errors in my judgment.

My motivation to reach early financial independence is also not as deep as I had intended in the earlier days. Back then, there was the painpoint factor which is not so evident right now. Energy was also much higher back then but now I couldn't run with a speed of a Lamborghini. 

I am a lot happier now because things are well in place, companions to play for and life being more meaningful with kid(s) running across the living room all the time. There was an occasional glitch of wanting to reach financial independence at some days of the year when some things get tough but it'll mostly disappear again within the next few days.

So 6 more years to go now. I'm praying it'll be kept that way.


  1. whoa, your new age, based on when you start working, is close to my target age, and I possibly didn't target that 1 mil.

    still this was a good exercise of reviewing your goals and where you are, and redrawing the line that is more practical and achievable.

    1. Hi Kyith

      Thanks, it becomes a good exercise of awareness regardless of what happens. Still, my purpose is to be conscious of the underlying reasons behind what I spend and I think it gives an overall good push towards sufficent financial security.

  2. Hi guys

    Always good to keep track of your returns, and reflect to see where you're going.
    But I'm not so sure about this thing called financial independence.
    It's a moving target. Most people, except for the extreme cases, can be financially independent anytime. Because that depends on your target. When you do have 1 mil, you'd STILL not think of yourself as financially independent. It seems like it now, but you won't.
    That's a good thing though, because it's the thought that you aren't, that ensures you don't settle. Settling means your life is essentially over.
    Afterall, what happens when you are "financially independent"? Ride off into the sunset and sip drinks by the beach? Attractive as that sounds now, life would be awfully boring after a week.
    Maybe its not such a bad thing to FEEL like you're NOT financially independent.
    Just my 2 cents worth, and maybe some personal experience mixed in.

    ThumbTack Investor

    1. hi TTI, good thoughts. actually FI is like a self insurance, or wealth security. you take it on as a project so that you build buffer that life is less of a problem.

      i find its practical for some people while its philosophical for others. when B is working hard and finds less time for the 2 kids, then you see that doing this project earlier does buy time.

    2. Hi TTI

      Thanks for your well thoughts. Definitely agree with what you said here since you do not know us well.

      Everything in life is a moving target. When we sleep at night, we are unconsciously hoping to wake up the next morning. That by itself is a moving target.

      Similar to personal finance, it becomes a moving target goal for me to aim for financially in life. When I reach the end of that stage, nothing much would have changed from what I am doing now. I wont be lying and bumming around drinking pina colada everyday mocking at people who goes to work. There will be things to do, new plans that will surface and new moving target goal which will shape my life for the next few years.

      That's just life.

  3. I don't think B will be bored if he managed to reach FI sooner. He will have more time for his two children. Once the kids are grown up; it will be another phase of life. Having more free time and thinking what to do is better than managing tight time schedules to meet many agenda that are not within our control. That is life behind FI once our children have grown up and on their own.

    1. Hi Uncle CW

      Thanks, i think the way i will look at some things will be different but it wont change drastically to what I am already doing right now.

      Also like you said, as the children eventually grows up things are going to change and shape up nicely towards the end of my life.

    2. Agreed. B is more than his job. He don't need a job to keep his life meaningful. Right, author? But TTI, can also understand your concerns. May be applicable to most singaporeans. FI is an absolute no. Minus inflation. Inflation is the variable. Lifestyle inflation included.

  4. Hi B,
    Glad to see your FI schedule. .gambatte! ! For everyone, FI have their own meaning and interpretation. .and life after FI also very much depends on individual. .like what Uncle CW8888 said ..with or without kids is much different on how you spend your times, and also if one have other hobbies like reading, gardening, exercise or joining some community works or activities. .else one will easily get bored after weeks or months stop working.
    More importantly, like what Andy said in his blog (TACOMOB) ..knowing the words of " enough "..and being contented on what we have. ..again, some individual may still think " money not enough " even with multi millions of asset .. :)

    1. Hi STE

      Thanks for your advice.

      Andy always provides good advice in his article. I guess the important thing is to find that zen thing in life which is the most hidden gem out there. Once we find that, it's almost priceless to begin with.

  5. I'm curious about how you managed to get 33.8% return in Y2012?

    1. Hi Bruce

      I can't recall the many transactions now off the head. They are all captured in the transactions page which I kept up to date. The return does not include cash holding so they might be skewed to some ways.

  6. B,

    "My motivation to reach early financial independence is also not as deep as I had intended in the earlier days."

    You know what?

    Does not matter whether its age 35, 37, or 40.

    I bet when you reach your destination, you would just shrug this exercise off as an endeavour that has outlived its original purpose ;)

    For the hole-in-your-heart has already been filled with relationships that matter, awareness of why you get up in the morning (ikigai), and you have discovered the self-actualisations that you seek to achieve.

    I suspect you have caught the initial glimpses of what I've just said ;)

    1. Hi SMOL

      I concur with you thoroughly.

      Im just glad that i found something towards my journey of doing so. That by itself is worth a lot more than the initial.

      This will probably just become a financial exercise for security purpose but nothing which I will do will probably change much after the intended consequences. I think STE and CW can attest to that since they have reached there.

  7. You seem pretty much on track even though capital injection may be less than planned. Coumpounded returns from reinvested dividends could help quite a bit.

    1. Hi Lizardo

      Thankfully the compounding factor really works well over time, even though the cApital projection is way below the intended.

  8. I agree with your pain factor of working. I have been living a simple life for the past few years, saving and investing to build up a sizable passive income. The aim is to have sufficient passive income so that I do not need to rely on working. I hope I can do it in 2 years' time. I am sick of my job. Otherwise, I will take a 1 year no pay leave, recharge before coming back to working for a few years.
    having said that, even if I achieve FI, I reckon I will still do some form of work, though not as stressful. Just to pass time and have some income.

    Renewed investor

    1. Hi RI

      Ah so far you are the first to get back to me on the pain factor. It is pretty amazing to think about how such event can actually propel us to go for higher than intended goal, to achieve something unintended which turns out to be good actually.

  9. I think you're wayyyyy above the average for people at your own age. Don't be afraid to set the goal high, if you're halfway your goal is probably 100% meeting somebody else's peak. LOL :)

    I don't question your 38% increase in 2012 as the stock market was down in 2011, so 2012 was just exploding. LOL:)

    For sure being married with kids would effect your savings, I'm financial independence now, but since I'm married to Mr. I'll have to recalculate our situation to see if we are both achieve financial independence with my investments and his savings.

    1. Hi Vivianne

      How is married life so far??

      Thanks for the conviction advise. I think you are a step ahead of me in terms of personal finance and think you sorted out your financial independence even prior to marriage!!! Incredible.

  10. Expenses will kick in once you have kids. I have barely spare cash to invest nowadays.

    Glad you are nearer to your goal of financial freedom than I am.

    1. Hi SR

      Ah you are in the same boat as me :)

      How do you find ways to grow your base capital investment in this case?

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  13. Your original projection has errors. Other than the first and second rows, the numbers in the rest do not add up. There is a formula error in your spreadsheet, which gave the wrong result that u can reach $1.4m in 10 years with 60k annual capital injection and 6% dividends.

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