14 Milestones to Celebrate on the Path to Financial Independence (and Beyond!)

I’ve got a great one for you today. The White Coat Investor gives you lots and lots of reasons to party as you advance in your career surpassing one financial milestone after another.

If I had celebrated this often, I’m not sure I’d actually be financially independent, but one can certainly celebrate without breaking the bank.

Most of these waypoints passed us by unnoticed. That’ll happen when you stumble into financial independence like we did. Where are we now? At least at #13 and probably at #14. Where are you?

Today’s Saturday Selection was originally published at The White Coat Investor.


 

14 Milestones to Celebrate on the Path to Financial Independence (and Beyond!)

 

One of my financial regrets is that we never got around to going out for a really fancy dinner when we became millionaires. I don’t know why, but I just wish we had done it.

I resolved afterwards to make sure we celebrated our milestones better after that. However, thanks to the success of this whole crazy WCI enterprise, we basically blew through all of our other relevant financial milestones within a year or two and now really have none left to celebrate. Kind of a letdown, really.

It’s like you spent months training for a marathon, busted your butt for the first 13 miles only to find out that you will be running the last 13 on one of those moving sidewalks in the airport. And the sidewalk is moving at 15 miles an hour. While you’re grateful, it does feel a little bit like you didn’t really earn that Boston Marathon qualifying time.

At any rate, I thought it would be fun to do a post about the typical financial milestones physicians hit. I have placed them in a specific order, but some people will hit them in a different order than the one I have listed, and that’s perfectly fine. Some may not share some of these goals or might have some other ones. I hope the list provides you some intermediate goals in the financial aspect of your life, and I hope you celebrate each of them as they are reached.

 

# 1: Becoming Worthless

 

The vast majority of physicians and most other high-income professionals leave training with a negative net worth. I encourage them to live like a resident for the first 2-5 years of their career.


I remind medical students and residents all the time that they are the poorest people in the world. The “bum on the corner” is more wealthy than they are, since his net worth is zero. A net worth of -$300K is far worse than zero.

Getting back to broke, through a combination of saving, investing, paying down debt, and perhaps even home appreciation should be one of your first financial goals, and definitely one that should be celebrated. Plus, it’s one of the few on this list that you can openly brag about in real life without looking like a punk.

 

# 2: Buy a Home

 

One of our financial goals was to buy a home. It turned out not to be a great financial move, at least the first couple of times, because we were not in a stable, long-term social or professional situation. Buying our dream/doctor house was a big goal for us, and one we worked toward for over four years, primarily saving up the 20% down payment. I think if your home buying experience was like ours (at least our third one), that you should celebrate it.

 

Reaching Goals

My 7 year old on his first day skiing

black diamond runs without falling

# 3: Reach a Net Worth of $100K

 

$100K is a nice round number. I think nice round numbers should be celebrated. There aren’t very many of them.

 

# 4: Student Loans Paid Off

 

Here’s another big one. It was really fun to be with one of my partners at work as he paid off his student loans online. Due to some miscalculation, his last payment was 27 cents or something like that. Paying off the mortgage on your brain is an awesome financial goal. Celebrate it!

 

# 5: Retirement Portfolio of $100K

 

When it comes to saving and investing, the first $1K, first $10K, first $100K, and first $1M are the hardest. The second one DEFINITELY comes a lot faster.

After a while, another $100K isn’t a big deal to you, but that first one…that one should be celebrated. As a physician, I don’t know that you need to celebrate your first $1K and your first $10K, but that $100K mark requires some work. My records show we hit it just before the 2008 meltdown. No wonder we didn’t celebrate it! That was back when 401(k)s were becoming 201(k)s.

 

# 6: $500K Net Worth

 

Half a million is a big deal. $500K is more than the average net worth of Americans of any age group. It should be celebrated.

 

# 7: Buy Your First New Car With Cash

 

 

This may or may not be on your list, but it was on ours. There is something cool about walking into a dealership and knowing you can buy whatever you want in there, right now, with the money in your checking account.

When the sales guy starts talking about financing you can give him a look that says, “Finance a car? Do I really look that poor?” You can celebrate this one by going on a road trip.

 

# 8: $1 Million Net Worth

 

This is another big one. While being a millionaire in 2017 is nothing like being a millionaire in 1930, or even 1980, it is still a number that means something in our culture. Besides, the greatest reward in becoming a millionaire is not the amount of money you have. It is the kind of person you have to become. Don’t make the same mistake we did. Figure out which restaurant in your city costs the most and go eat there. [Update prior to publication: We finally went and ate at that restaurant. It was really good.] 

 

Steak Dinner New Orleans

 

# 9: Retirement Portfolio of $1 Million

 

Most readers of this blog will hit this one within a year or three of # 8. Just in case you need another excuse for a celebration.

 

# 10: Be Done Saving For Retirement If You Work to Age 65

 

This one is a little bit subtle, but as I have written in the past, you can be done saving. Basically, if your retirement portfolio, with no new contributions but with additional compound interest at a reasonable rate, will support you from 65 until death, it’s worth a celebration.

If your number is $3 Million in today’s dollars, and you assume 5% real returns, that’s $886K if you’re 40, $1.4 Million if you’re 50, and $2.4 Million if you’re 60. That’s a pretty good feeling to know your retirement is already taken care of and you’re only saving for an earlier or more lavish retirement from now on.

 

# 11: Pay Off The Mortgage

 

I have heard people used to have mortgage-burning parties. It might be considered tacky now to have a big party, but that doesn’t mean you can’t celebrate it with some very close family and friends. We made a video instead.

 

# 12: Have Enough To Retire Now and Be Able To Cover Your Basic Needs

 

This is probably the first milestone that could be called financial independence. If you never work again, you can maintain your basic standard of living. You can keep a roof over your head, the lights on, clothes on your back, shoes on your feet, and food on the table.

 

# 13: Financial Independence at Current Rate of Spending

 

This definition of financial independence is probably more relevant to you, unless you’re really a Frugal Freddie. This is when you can continue to spend exactly as you spend now without ever working again. That seems worth a celebration.

Like a trip to Europe or at least the Caribbean kind of celebration. And if you want…don’t bother coming back. Or you can celebrate by flipping off the boss and walking out the door if you like.

 

# 14: Financial Independence at Desired Rate of Spending/ “Enough”


But when you get to this milestone, there is literally nothing you can spend your money on that will make you any happier. You not only understand the concept of “
Enough”, but you have achieved it.Some of us would like to spend a little more on something that we think would make us happier. Maybe it’s another international trip every year. Maybe it’s a cabin up in the mountains or a lake house. Who knows?

So…where are we at? It really depends on how you treat WCI, LLC. If you ignore both its sale value and its future income, we are right at # 12. Counting it, we’ve achieved # 14.

 

 

What do you think? Which of these milestones have you passed and which ones are you still looking forward to? What other milestones would you add to the list? How have you celebrated your milestones? Comment below!

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42 comments

  • It’s possible we could hit number 12 this year, though I define it differently or split it. There is sell your house and move to a place with lower then your rent basic fi, been there a while, and then there is 4 percent in investments at basic levels.

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  • We are at 12. I’m not sure 14 will ever happen.

  • Nice list! I agree about the millionaire today sentiment. It’s less meaningful, but boy, you are in rarefied company even in the U.S. when you hit that net worth marker.

    Curious which restaurant you hit up? Guessing Manny’s? Fogo? I love that place. Not a frugal man’s destination, but when you live in a vegetarian household, Fogo once or twice a year hits the spot…

    • This was WCI’s list, but I’ve been to Manny’s a couple times. Hit up Murray’s with my wife a couple years ago, too, for the $100 silver butter knife steak.

      I’ve been to most of the national prime steak chains like Ruth’s Chris, Capitol Grille, Morton’s, etc… They’re all quite good, but for the money, a pack of prime steaks from Costco and my natural gas grill is the way to go.

      Cheers!
      -PoF

  • This was one of my favorite posts when it published and still digging it. After the fire we have jumped a few spots on this! Very fun indeed.

  • If I were just starting out I would literally plan a series of parties to help motivate me to achieve these. As it was – I just took in a big breath, smiled, and went back to doing my thing. I’m overdue for some celebrations!

  • Ginzu

    I’d like to say I’ve reached #14, but that is when I define #14 as equal to #13 (spending is still pretty frugal; stealth wealth style)

    #15: Enough in a Trust for one generation of your family to be FI. Of course educated in a work ethic that placed you through #14.

    #16: Legacy. What ever you want it to be.

  • I have achieved #5, although I haven’t bought a home (#2), nor have I paid off my student loans (#4). I’m hoping to hit #4 within 6-12 months, and #2 isn’t a priority for me, so I think I’m doing pretty well for less than 3 years into practice.

  • A little depressing that I am still trying to outpace the bum! Fortunately, we have a good plan in place. We should accomplish zero net worth within a year from finishing training. We should be millionairre’s by the time we are 38 (6 years out from training) and be able to retire by 45 at the latest. Hoping sooner.

    I look forward to all of these celebrations and think it is sage advice to keep the heart happy after going to great lengths to achieve these financial goals!

    Thanks for the post POF!

    • Gasem

      Just took my wife and kid and her new boyfriend out for fillets and chit chat. He’s 6 mos out of school and 1099 at Electronic Arts writing video games, aka gig economy. Soon enough anyone left working will be doing gig economy I think. If I’m eating fillet I’m celebrating something even if it’s being on the right side of the dirt!

      Man! I finished residency at 38! I had my 1st million by 44. We lived like residents and had zero debt coming out of residency. There’s a message in there somewhere.

    • Gary Simms

      You’re not at the level of the bum even being $300,000 in debt because of your human capital. Thats what you insure with life and disability insurance.

  • I almost did 7 not long after college – I took out a car loan to build credit history and autopaid it out of the car savings account. The next car will definitely be paid for in cash, but that is hopefully 5-10 years away.

    We should hit 9 by the end of this year. We have 10 already though. We have enough in retirement accounts to cover our current budget plus 40% at age 65. We have hit 12. We haven’t quite gotten around to 11 – that would take the condo equity from 35% of our net worth to 45%, so we are going slowly there. I expect we will be around 13-14 in another five years or less, so by age 35.


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  • $500k is my next big BIG milestone. But I have a slightly less amount in mind of a sort of mini goal that I’m working towards. I swear I look at Personal Capital every damn day. Probably not very healthy! lol!

  • Great idea. I’ve passed all those milestones and have new ones now but I never celebrated anything. Looking back, I wish I had. We have started this notion. Now when I reach a goal my wife says “How should we celebrate this.” It is important to acknowledge the accomplishments of jobs well done. It motivates you to do another one.

    Dr. Cory S. Fawcett
    Prescription for Financial Success

  • Nice list but I’d move buying a new car with cash to after your net worth passes a million dollars. New cars are money disposals and I wouldn’t advise anyone to shred their money like that until they’ve hit all 14 of the milestones. I passed all of those a long time ago as have you and I still don’t buy new cars, its too much like using a wad of Benjamins to start a fire in my fireplace. I could afford it but why throw money away on something that isn’t any better at getting from point A to point B than a much less expensive used car? I will admit my spending crazed wife does buy a brand new car with cash, once every 15 years. It is a wonder we are FI.

  • hatton1

    Yes I have hit all these. It is hard to celebrate these when no one else is achieving these goals. I am trying to figure out a new set of goals.

  • It is always good to reflect on your accomplishments along the journey. I’m not much into celebrations as it always seems like I’m pushing to make progress. Once I hit some of the bigger milestones I will pause to reflect and celebrate.

    Nice post!

  • Awesome list if milestones! I find it fun to track our progress. We are around #7 and #8. Looking forward to paying for our Tesla in cash. And hopefully reaching #8 by the end of the year. We are still in our early mid-30s and on track to reach #11 and #12 in 6 years 🙂

  • Ann

    Nice post. We’re somewhere in the 12-13 range, although we skipped #11 (I’m including mortgage payment in the basic needs category of #12–although we could pay it off right now, and if we were going to stop working, would) and also skipped #7 (old car is working just fine so no need to buy a new one). Not sure how #14 would be different from #13 for us–as we already buy whatever we want–readjusting my thoughts to be content with what I have has increased my happiness as much as it has my wealth, so I wouldn’t want to shift back to wanting more.

    My work environment, as well as my attitude towards work, has also markedly improved since I became interested in FIRE 6 years ago, and at this point I don’t see myself quitting work anytime soon. That attitude shift was definitely a milestone worth celebrating. Of course, the tide could always shift again, so I’m glad I’ll be prepared if it does.

    As far as celebrating, if you’ve ever lost a significant amount of weight, you’ve learned to celebrate each loss of 10 lbs without a pizza party or a pan of brownies. Likewise, as one increases in their financial success, they often learn to celebrate small victories without breaking the bank. My favorite way to celebrate is to go for a run, cook a nice meal, have dinner with friends, go for a walk with the family, plan my next vacation, etc.–so in that way I guess I just celebrate my life daily.

  • We are at #12. We honestly never really celebrated any of the milestones along the way. Maybe we should have, to give us more appreciation for what we had, but we’ve largely been content along the way. I only started to really pay attention when there started to be a conflict between how much time I spent working and other things that I’d rather spend more time on (family). That required a more critical look at the exchange between time and money. We also have an abundance of steak. Our neighbor raises his own cows that we partake of which, along with the company, hasn’t had us out to too many steak houses. However, a warm Carribean celebration is looking pretty attractive right now.

  • Great list. We are between 13 and 14… or maybe at both as another commenter mentioned above. I went to my state’s medical school and took out minimal loans (hubby was working full time), so my med school debt didn’t linger too long. We have lived with the same lifestyle for the entirety of my time in med school, residency, and beyond. I think this is key.

  • moonshadow

    5% real returns? Now I am depressed!

  • Debbie

    I’m closing in on #8. Was just thinking yesterday where I would like to go to celebrate and who to bring with me. Want to stay stealth wealth.

  • Congrats on being at #12/14. I have managed to get to #4 within the first year of pursuing FI, so I guess that is OK. Looking forward to celebrating the many milestones ahead 🙂

  • TJ

    For the past 2 years, net worth exceeded annual compensation after taxes. So I guess we are 13? Obviously our rate of return has blasted the estimated 4% SWR out of the water. Psychologically, I’d consider myself a 12 or maybe 11.5.

  • Buying my first new car with cash was the biggest milestone for me in a way, and I’m not even a car guy. I drove used beaters for years and when I was FI and bought my new Outback, I had a big sense of accomplishment. It was pretty amazing plopping down that much money at once and knowing that it wouldn’t affect my finances or security at all.

    Of course I had to keep telling the finance guy “no, I don’t want to finance even if it’s 0%!!” but he kept asking over and over… He didn’t get it obviously.

  • Joe Schmo

    We are somewhere around #13. Although our current rate of spending is a little off as we just renovated our home and made a few extravagant purchases.

    Purchasing a new car with cash felt pretty cool. Paying off the house was good, but bittersweet. Smart money says I should have kept the low interest (tax deductible) payment, but the idea of not having to make that payment every month just seemed like it would be a huge mental relief (it was a good feeling – no regrets).

    Getting to the next milestone of being able to buy a second home AND still be able to live at or above our current spending is the next big one for us.

  • FIRE2020

    We just achieved #9 and #11 this year! However, I have not gotten around to #4 yet. It is hard to do when your students loans are at 1.6% a year. The next couple years will be focused on #12 and hubby will take over to reach #13. This is a good reminder for us to go and celebrate the big milestones that we’ve reached. Sometimes I get so caught up in trying to save as much as we can that I forget to celebrate what we have accomplished so far.

  • Gary Simms

    Finished #14 in 2015 but took 2 years to sell the practice so fired with full replacement income 2/2017.

    Biggest event was paying off office building after 5 years of a 15 year loan with a baloon payment of $38,000.

    That put me debt free. It was an amazing feeling i still enjoy to this day.

    Now pay cash for everything. No more begging banks for loans!

    All the payments for student loan debt, equipment loans, and the office building loan immediately went into saving for what you now call fire. What Bob Brinker called the land of Critical Mass.

    I now get my same paycheck each month, but dont have to go to work. I enjoy that.

    My big decision now is what time to get out of bed each day.

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