Why I Don’t Calculate My FI Date

By: MySonsFather.com I’m not what you call outdoorsy. (I know, yet another thing that makes me an outsider in the personal finance community.) In fact, given the choice between visiting a big city or the great outdoors, I’d choose the big city every time. (Well, maybe 9 out of 10.) But one of my close friends is outdoorsy, very outdoorsy. After numerous attempts to get me to go camping with him (I don’t do camping), I finally relented. We got to the campsite late and had to pitch our tent in the dark. Had it been up to me, I would have spent 15 minutes wrestling with the tent before declaring that we were missing parts and heading to a hotel for the night. , we set out on our first hike. This was a few years ago, so while I had youth on my side, I wasn’t in the best of shape back then. After an hour, I began to lag. I pushed through and half an hour later I hit my stride. I even began to enjoy it a little bit. The solitude, the sheer vastness of nature was awe-inspiring. Then it happened…

Dramatic Pause

There was movement in the brush about 100 yards to our right. We stopped, hoping for a moose, but expecting a deer. Then this big black head poked up above the foliage. It kept rising as it stood up on its hind legs. I froze. My heart skipped a beat. It took a good 2-3 seconds before I could breathe again. It was the first bear I’d seen (outside a zoo), and it was both breathtakingly beautiful and absolutely terrifying. Standing up on its hind legs, it was massive. It turned its head slowly in our direction as if it was looking for something. When its gaze landed on us, it stopped. This can’t be good. It was looking right at us. My head was racing with a million thoughts all at once. Before I could settle into just one, there was more movement; it was equidistant between the bear and us. Fifty yards away two much smaller fuzzy heads popped up. Two baby bears stood up on their hind legs and looked back to their mom. It wasn’t a he, it was a she. No, it wasn’t a she, it was a momma bear and her babies were unsettlingly close to us. That’s okay; mother bears are notoriously nonchalant about their cubs, right? (Had I not use the restroom before we left, I may have needed a change of clothes.)

End Scene

That’s pretty much where this drama ends. The mother bear saw her cubs; cubs saw their mom and they moseyed on-off without a care in the world. The whole thing probably took all of 10 seconds. At this point you’re likely thinking, interesting story, but what does it have to do with you’re your FI date? I’m glad you asked. The point is, bears happen. You’re happily walking along one day without a care in the world; you’ve found your stride and BAM…Bear.

Bears Happen

My journey to FI feels a lot like that stroll in the woods I took all those years ago. The first part of that hike was tough, I’d neglected my fitness for a while and I was paying for it. If that isn’t a direct parallel to the debt repayment portion of my FI journey I don’t know what is. We had neglected our financial lives for a while and when we finally decided to get in financial shape it was hard. And it felt like it went on forever. But after we became debt free, we found a second wind and hit our stride. Maxing out our 401k’s, we began to see our net worth jump up each month. It was great! Then there was a rustling in the brush… It was just a market correction, right? I’m not smart enough to know what’s going to happen in the market, no one is. I don’t know if we are currently in the middle of an unprecedented bull market that will go on for another 8-9 years, or if it is something else. All I know is that bears happen. At some point, we are going to hit a bear market. And if that some point happens in the next five years, then the FI date I calculate today with the assumption of steady growth at 7%, won’t happen. If my FI date was 20 years from now, I could safely assume that the markets will balance themselves out over such a long stretch of time. But the closer I get to my FI date the warier I become of trying to predict it. We can’t predict the markets and we can’t predict the future. That is why I don’t try to predict my FI date.

An Aside

I should note that my Financial Independence is very much tied to the stock market performance. Other strategies for FI, including dividend investing or real estate, may not be as susceptible to the “bears happen” premise of this post. Republished with the permission of MySonsFather.com.