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Debt Free Forever

by owl on June 25, 2015 · 0 comments

In a very lack-luster event, we are now completely (and forever) debt free. Oh well.

It really hasn’t meant much to us to be debt free. The reason is that it makes no difference to our day to day lives. We have essentially been living on only 30-50% of our income, devoting the other 50-70% toward paying off the debts. This has led us to pay off our mortgage, an equity loan and a car loan all in 4.1 years. $113,000 in debts paid off in 4.1 years. Quite a lot of debt balance. So you can expect that after paying off 2 other loans, the third (smallest) is pretty uneventful.

It would be a lot more exciting if that money had gone into investments instead. Watching a balance grow is a lot more satisfying than watching a balance shrink.

So that’s what we have to look forward to going forward. That same 50-70% of our income will now be going into investments so that we can be Financially Independent. We have the ability to invest about 82% of all our income if we really stretch our frugal muscles. We will hit that level some months. Other months we will be down in the 60s. I don’t think we’ll ever drop below 50% savings rate.

The truth, however, is that our investments are going to grow much faster than our debts shrunk. The small amount from compounding coupled with our strengthened frugality and a revised method of budgeting that has simplified everything and made things much more transparent will allow us to grow our investments quicker. We should hit $113,000 in investments in about 2.5 years and beyond that $230,000 in 4.1 years (the same time span as the debt payoff). That is an increase of over 100%.

That’s the power of compounding and ERE.


Forward Annual Income

This week I spent a deal of time working on a method of tracking where we are in our personal ERE story.

I am calling it forward annual income because it is simply the amount of annual income we can expect from “now” going forward given a certain SWR (safe withdrawl rate). For Lending Club our SWR is 7%. For our Dividend Fund, we will simply withdraw the dividends each month, leaving the principal to compound at a 2-4% rate.

Forward Annual Income

You can see our “Now” value is only in the low hundreds (~$300 annually right now). That number will begin to rise with the updates I have in August since at the end of July we will be investing the majority of our income.

The gray line is our projected FAI and the yellow stars are the expected points where we achieve certain goals.

The red line is the amount of FAI to cover our core monthly bills (housing, groceries, etc…). The orange line is the amount of FAI to cover all of our expenses (plus some extra). The green line is the amount where we will have a runaway, truly Financially Free (I don’t need to worry about working ever again) level of FAI and that is the level where I will quit my job and pursue other passions.

My best calculations put us at achieving this level of FAI at the end of 2021 which is only about 6 years away. This all depends on how much we save, but more importantly how much we spend.


New Beginnings

June 19, 2015

Hello all, After a long hiatus, CentsToShare is back and under new management. My name is owl and I am an INTJ,  practicing EREer. Over the last several years I have discovered more of who I am at heart and the ERE mold fits me perfectly. Therefore I give you the beginning of my journey […]

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I Don’t Have A Cell Phone

December 15, 2011

There comes a time in your life when you know that you need to take certain steps to eliminate the waste in your life. I reached one of these times several months ago, actually, when it hit me that I was wasting a lot of money on my cell phone bill every month. So I […]

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How To Install Fireplace Doors Without A Lintel Bar

December 14, 2011

Being an avid do-it-yourselfer and having just purchased a semi-rundown house in need a of a lot of TLC, I am in a great position to learn how to do things myself. When we bought the place we have now, one of the things that was noticeably missing was a covering in front of the fireplace. Originally, […]

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How To Kill Time At Work

December 1, 2011

Having spent the last 2 years in constant, full time employment, and getting two internships under my belt before that, I can honestly say that learning how to kill time at work is one of the most important skills you can master if you work in an office setting. Some of these ideas may even […]

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My Life 6 Years From Now….6 Years Ago

November 23, 2011

I thank you in advance if you read through this entire post…I know it is a bit long. If you are a regular reader, then you know that I’ve been having some patience issues lately. It seems that over the course of the last couple of months, I’ve really grown irritated with the routine that […]

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Niche Blog Challenge Weekly Update 3 of 35

November 21, 2011

It’s been a transforming week in the world of my personal niche blog challenge. Last week I decided to do a little research into the world of niche site creation and started discovering some things that I didn’t really like. I detailed most of what I didn’t know, but should have, here. Needless to say, […]

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The Importance of Patience

November 18, 2011

I don’t normally post twice a day (maybe I should!), but I wanted to get this out before my niche site update on Monday. Check out today’s other post here. Lately, I’ve been going through a phase of impatience, and I don’t really like it. I’ve been impatient about everything it seems. I’ve been getting […]

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Friday Favorites #1

November 18, 2011

There are a tremendous amount of blogs out there, but these are some of the ones that I enjoy reading on a regular basis. Any of my readers should enjoy their content as well. – Krystal, over at Budgeting In The Fun Stuff thought about getting a puppy….but decided against it! I know where she […]

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Winterize Your Home – Prepare Your Furnace For Winter

November 17, 2011

With winter quickly approaching, and the temperature outside dropping, it’s time to turn your furnace on once again. Before you do so, however, there are some things that you must do in order to winterize your home and one of the more important things is to prepare your furnace for winter. A properly cared for […]

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Niche Blog Challenge Weekly Update 2 of 35

November 14, 2011

Welcome to week 2 of my weekly Niche Blog Challenge updates. My how things can change over the course of a week! Sitting here writing this, it seems like it’s been a really long and a really short week at the same time, even though it’s only been 7 days since my last update. I […]

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Niche Blog Challenge Weekly Update 1 of 35

November 7, 2011

It’s been only 4 days since I announced my personal niche blog challenge, but I thought I’d start giving weekly updates on how the challenge is progressing so far, so as to keep myself accountable, and to keep making progress. You can expect these updates at the start of each week, either Sunday or Monday, […]

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How to Freeze Bell Peppers

November 4, 2011

As you know, we harvested a lot of peppers this fall. We ended up leaving most of them on the plants until right before we had our first frost a couple of weeks ago, and so have had about 2-3 dozen peppers sitting in our kitchen. Some are big, some are small, some were ripe, […]

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Niche Blog Challenge!

November 3, 2011

A few days ago, I listed out the things that are important to me, and one of the two primary items included building some sort of secondary income (maybe even replacing my primary income), with something. Currently, the only thing that really appeals to me for making side money is through blogging. When I started […]

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What is a Migraine Aura?

November 2, 2011

Yesterday, I experienced something that was very unsettling, at the moment. After experiencing it, I decided to do a little research, because it concerned me that much, and I found that I had experienced what is commonly called a migraine aura. I’m sure everyone knows what a migraine is, but only about 1/3 of people […]

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What is Important To Me

November 1, 2011

It seems that this question runs around in my head all the time, so maybe it’s time to actually get it out, and put on paper (so to speak). Without direction, usually circles follow, as in the case of getting lost in a forest. Usually, you’ll just find your way right back to where you […]

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Being Busy is Silly

October 31, 2011

I am subscribed to an amazing blog, called Zen Habits, and last week received a blog post that really put a feeling of peace in my heart. I read part of it when I got it, but decided not to distract myself from what I was doing at the moment, and put it in my […]

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