Q3 21 Financial Scorecard: The Path Forward Slows

After five consecutive quarters making material progress on two of our primary FIRE goals, we were probably well overdue for some difficulties in the third quarter. While total returns for the S&P 500 were slightly positive in Q3 21, the Dow Jones Industrial Average and Nasdaq were both down for the quarter. Moreover, things got more challenging as the cooler weather arrived in September, which delivered the worst monthly stock market returns since the COVID-19 pandemic kicked into high gear around the world in March 2020.

The more challenging financial markets had a negative impact on our portfolio, and our expenses were also higher than normal. Some of those expenses were under our control, as we took our first family vacation in two years in August, enjoying several days in Maine while COVID cases were much lower than they are today. Unfortunately, the rampaging inflation the Biden administration has only reluctantly started to acknowledge took a big bite out of our wallet, as the townhouse we have rented several times over the years cost 60% more a night than it did in 2019! We also completed the HVAC project I mentioned last quarter, which was a much larger expense than our trip, but it will be nice to have reliable heating for the entire house as we head into what will almost certainly be another cold winter.

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Q2 21 Financial Scorecard: Nearing the Finish Line!

The ebullient financial markets continued to reach stratospheric levels during the second quarter of 2021. The S&P 500 returned 8.6% during Q2, pushing the market higher by more than 15% for the first half of the year. Those fantastic results boosted the ROMT family’s finances, moving us closer to our early retirement and financial independence goals!

As I noted last quarter, my mindset has shifted to “when” I’ll reach FIRE, from “if” I’ll reach FIRE, and strong stock market returns in recent weeks haven’t changed the way I’m feeling. That said, uncertainty in the U.S. remains elevated, with Coronavirus cases and deaths climbing again, a new administration that seems hell-bent on spending and taxing its way to higher inflation, and continued social unrest and increased polarization among our country’s citizens. While it seems like a strange time to potentially walk away from a steady paycheck, there’s always going to be something crazy happening somewhere, and the numbers suggest our financial position is sound. During Q2, I let my boss know I was unlikely to be around for the long term, so at this point, it’s just a matter of deciding when enough is enough!

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Q1 21 Financial Scorecard: The FIRE is Getting Hot!

While the Earth remained in the grip of the worst global pandemic in a century, the financial markets continued their inexorable march towards record levels during the first quarter of 2021. The S&P 500 delivered a total return of more than 6% over the past three months, in stark contrast to the 20% plunge during the same time period last year, when Coronavirus lockdowns started around most of the world.

Not surprisingly, it was a good quarter for the ROMT family’s finances. With the stock market continuing to climb over the first two weeks of April, we’re increasingly close to reaching our financial independence and early retirement goals!

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Q4 2020 Financial Scorecard: A Great Finish to a Crazy Year

2020 will likely be remembered as one of the craziest years in our lifetimes. A year ago, I never would have thought that going to the grocery store without a facemask could feel more dangerous than BASE jumping. For the record, I haven’t done either over the past ten months – but hope to head out in public without a mask at some point in the future!

Over the past twelve months, we’ve experienced the worst global pandemic in a century, the highest U.S. unemployment rate since the Great Depression, and the most contentious presidential election of my lifetime. While the value of the S&P 500 index dropped by more than one-third during February and March, the bear market was incredibly short-lived. By the second half of the year, the U.S. stock market was regularly hitting new record highs, and the S&P 500 generated full-year returns of more than 18%!

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Preparing for the Tsunami: How Our Pursuit of FIRE has Helped Us During the Pandemic

We’ve spent a lot of time over the past several months preparing for the dreaded “second wave” of the COVID-19 coronavirus pandemic to hit, and it appears that time has arrived. New cases are at record levels in the U.S. and around the world, the number of deaths are climbing steadily, and shutdowns and restrictions are increasing. With the Northern Hemisphere just weeks away from winter, it’s looking like many of us are in store for a long, lonely and scary holiday season.

It has been a difficult year, spent mostly isolated from family, friends, colleagues and neighbors. We saw my family once over the summer, and we haven’t seen Mrs. ROMT’s family in almost a year. If anything, the next several months may be more challenging than the last eight months have been. Upcoming celebrations for Thanksgiving, Christmas, and New Year’s are going to be different. Our state has recently increased restrictions on out-of-state visitors and banned gatherings of more than one household. While enforcement of these measures doesn’t appear stringent right now, we have no interest in pushing the envelope. Hopefully by next summer we’ll be through the worst of the pandemic, and, God willing, will be healthy and able to catch up on lost time in person with family and friends.

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Q3 20 Financial Scorecard: Heading Towards the New Normal

Another quarter of pandemic life is behind us, but life’s certainly not back to normal. New cases of COVID-19 are climbing around the country, and it seems like the dreaded “second wave” could emerge over the coming months. We’re also just weeks away from the U.S. presidential election. Regardless of whether President Donald Trump or Joe Biden wins, the result will ultimately have an impact on our personal finances and pursuit of FIRE.

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Q2 2020 Financial Scorecard: Time For a Change in Plans

My employer recently went through a round of layoffs. While my job was safe, many of my colleagues, and millions of Americans, have lost their jobs over the past several months. COVID-19 cases continue climbing in many parts of the country, massive social changes are taking place, and what seems like one of the most important presidential elections of my lifetime is just four months away.

The world has changed a lot in 2020, which has caused us to rethink our plans around our pursuit of early retirement and financial independence.

Part of me has been tempted to use the massive uncertainty as the impetus to walk away and focus on what’s most important to us.

But the more rational part of me thinks it would be crazy to abandon a good paycheck until we have a much better idea what life in the United States might look like in 2021, 2022, and beyond.

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Q1 2020 Financial Scorecard: A Whole New World

It seems frivolous to be writing our latest financial scorecard in the midst of everything that’s going on in the world today. The first quarter of 2020 will go down in history as one of the most eventful for the American economy, global financial markets, and society at large, as the COVID-19 coronavirus reached pandemic levels, impacting life around the world.

The coronavirus is closing in on two million confirmed cases, and has already killed over 100,000 people in what will likely become the most significant global pandemic since the outbreak of the Spanish Flu a century ago. In addition to the grim human toll, the coronavirus contributed to the worst first quarter performance in the history of the S&P 500 Index, which plunged 20% as fear of what the future holds ended the longest bull market in American history, triggering record jobless claims and a likely recession.

The result on our personal finances was, predictably, quite negative. While the ROMT family may have reached financial independence in late 2019, that’s no longer the case. But right now our family, friends, neighbors, and colleagues are all safe and healthy, which more than makes up for some smaller numbers in our financial spreadsheets!

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Our 2019 FIRE Prowess Score

Three years ago, The Green Swan blog introduced a metric called the FIRE Prowess Score.

“FIRE Prowess” went viral among those seeking financial independence and early retirement in 2017. Many financial bloggers, including yours truly, wrote about our FIRE Prowess Scores back then.

Since I’m close to finishing up our taxes, I’ve pulled together the information needed to determine our score for 2019. I’ve been keeping thorough financial records for years, and enjoy tracking how our “FIRE Prowess” has changed over time. Thanks largely to last year’s great stock market returns, our FIRE Prowess improved significantly over the past twelve months!

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If You’re FI, Why Haven’t You RE?

question-mark-4785077_1920I recently wrote about how the strong U.S. stock market enabled the ROMT family to achieve our long-term net worth goal earlier than expected.

That achievement naturally could lead readers to wonder:

“So ROMT, if you think you’re financially independent, why haven’t you retired early?”

It’s a great question, and one I’ve been thinking about a lot lately!

There are several reasons why I haven’t pursued early retirement, even though our net worth says it might be possible:

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