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Their Finances After 2 Full Years of FIRE: Up More Than $1 Million

Like me, the FI Heroes left their careers behind in 2019. Also like me, they saw their net worth decline by more than a million dollars the next year, only to see a rebound so great that they’re up seven figures overall since leaving their jobs.

While I’m not sold on their plans to live off dividends alone, it is clearly working out very well for them. My main issue with dividends is the associated taxation, but this couple falls into a tax bracket where those dividends will be coming tax-free.

The biggest “danger” in such a plan is a tendency to underspend by never touching capital, but that’s a “problem” that typically leaves you with a lot more money than you started with. Thus far, they appear to be headed down that wealth-growing highway.

Two years’ worth of asset growth, spending, and dividend income are detailed below in this Friday Feature, which originally appeared on FI Heroes.




In March, we hit the 2 year anniversary marking the milestone when we both ripped off the training wheels and retired early. (FI Girl technically FIRED in December 2018 but that’s neither here nor there.)

For those that have been following our journey for a while, you know that we both got very lucky with our exit from the workforce as a lot of things went in our favor. Including both of us getting laid off just months apart from when we were originally planning on quitting anyway.

I actually regretfully quit just a few days before a voluntary layoff was announced only to rescind my resignation. Fortunately, my company was kind enough to let me participate in the layoff. Talk about timing.

The severance packages that we both received carried us both for about six months.  It allowed us to continue receiving bi-weekly paychecks and health insurance while we were selling our house and converting it into dividend-producing ETFs.  Once again, this felt like we got an asterisk next to our plan because who gets this lucky?

Two years ago, we finished selling our house and within a few short weeks of that, our severance ran out.  This meant from that point forward we were living entirely off of our investments with no other source of income.

Everything after this milestone is more of a fair assessment of how our FIRE plan has been working out.

So, let’s see how the FI Heroes FIRE machine is actually working 2 years in…




It is important to note that the first few years after retirement is the most critical time for any retiree’s long-term success.  A recession just after retirement can mean that the assets just won’t go the distance.

As luck would have it, in the first year of our retirement we hit a recession due to a global pandemic. Thanks, COVID. However, we kind of got lucky because it was the shortest recession in modern economic history.

If you took a snapshot of our assets two years ago versus today, it would look something like this:


Asset Comparison 2019 to 2021
Asset Comparison between 2019 and 2021


Wow! Without even thinking about it, in just two years our net worth increased by over $1 Million!!!

If I only showed those two data points to a financial planner, they would have a hard time believing that we entered and exited a recession where we lost $1 Million in net worth in just 40 days.

[PoF: I know the feeling, having achieved my Life Goal: To Lose a Million Dollars at that same time.]


Our net worth in two years is up over 38% or 19% annually.  That is completely bonkers for selling our home and converting everything into just four ETFs!

No, we didn’t invest in any crypto or single shares in any meme stocks.

Honestly, if you held your shares through the last two years, I would guess that you did just fine no matter what you were invested in.

Despite living through it, I can hardly believe our returns over the last 2 years since my expectations were so low to begin with. In our last few years of work we knew a recession was on the horizon, so we ended up working longer than we really needed to.

We have also been spending a lot less than we could spend by making sure that we are always budgeted for lower than our forecasted dividends would allow.  The idea was to never sell any shares and live entirely off of dividend income.

If I could lock in 19% annual gains, I would be putting some of our budget into top hats, monocles and canes, because I could spend like a fat cat.  As our results were not typical and there is no such thing as guaranteed returns, we will continue to live on a modest budget for the foreseeable future.

A year where our investments are down in the double digits is almost a certainty in our future.

It could happen next year or five years from now. No one knows for certain and I won’t claim to.  We could also have another bonkers two years and achieve a net worth of over $5MM.  I’m not going to bet on it though, since PE Ratios have been and will continue to be on the high end until some sort of correction takes place.

Still, it’s nice to look back at a plan that worked out because it gives us enough buffer for any bad news that impacts our investments in the near future.  If we were to lose forty percent of our investments in a sudden crash tomorrow, we would still have $2.2 Million, which happens to be our original target for achieving FIRE.


FI Heroes Assessment

If we had to give a grade to the performance of our assets over the last two years, we’d say they did really well. Certainly better than we had imagined.

  • Assets over two years:  A+



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An argument I have always heard about dividends is that they are not predictable.  That can be true when you think of a single company.  To hedge against this, we decided to invest in over 3,000 companies from around the world all at once.  We do this by investing over 97% of our assets into four ETFs.  (To learn more, check out our article titled “Are Indexes Really Diverse?”.)

Our original goal two years ago was to generate $55,000 annually in dividends so that we could spend $55,000 annually in retirement.

Here is what we actually ended up receiving:


Actual dividends received


In eight quarters, we received almost $108,000 in dividends.  The first year we made $55,000 and the second year we made $52,300.

Given that the second year included a recession, I’d say that we made it pretty close to the mark.

While we achieved 98% of our target, which is pretty good, I was originally hoping for dividend growth in our second year to go up by inflation.  The reality is that we should have achieved about $112,000.  Falling just short isn’t so bad though, as I have high expectations for next year.

We have a lot of exposure in Europe, and regulators over there put restrictions on companies and their ability to pay dividends.  These freezes are going to end in Q3 of this year.  I expect the shortfall of $2,000 to be eclipsed by any special dividends received over the next year.


FI Heroes Assessment

If we were to give our dividend performance over the last two years a grade, we’d say we did OK considering there was a pandemic and recession.

  • Dividends over two years:  B+




Our target was to spend what our dividends produced.  So theoretically, over the course of 2 years we should have spent $108K.  The reality is that we fell really short when compared to that goal.

In two years, we only spent $51,000, or less than half of our target.

Here’s a closer look at what we spent each month over the last two years:


Monthly spending over two years


While it is far better to underspend than overspend, this is still a ding against our plan.  When we decided that FIRE was for us, we dreamt of experiencing different adventures around the world.

We got off to a good start when we lived the Disney FIRE Lifestyle between September 2019 through February 2020.  In fact, during our first seven months, we spent $22,000.  If we continued spending at that rate we would have spent $77,000 over two years.  This is still short of our spend goal, but it would have been a much smaller gap than the one we ended up with… and a lot more fun.

When COVID and the lockdowns happened, we saw our assets drop hard.  Analysts were forecasting dividends to drop significantly over the next year worldwide.  While there was some drop, it was not nearly at the magnitude the consensus estimates were predicting.  We decided to slam the brakes on our spending and revised our budget numbers down.

Knowing what we know now, we can say that we overreacted a bit and cut way more than we needed. Given that our dividends dropped by less than 5%, slashing our budgets to less than 50% was a bit much.

Restrictions during the pandemic probably contributed to this mindset.  We created a game to see how low we could get our spending when there were no high-cost adventures to be had. This gave us some feeling that we had control over our situation.

If we were to go back in time knowing what we know now, I don’t think our spending would have changed much, though.  We would have been burning money on things that we would just have to throw away later.  Experiences and travel just weren’t options for us or nearly anyone else during the COVID pandemic.  So I guess I can give us a partial pass on missing our spending goal by so much.



FI Heroes Assessment

If we had to grade our spending over the last two years, when compared to our original plan, we’d say we fell a little short…which isn’t a bad thing given there was a global pandemic which restricted travel, adventures and activities.

  • Spending over two years: B-


Overall Financial Picture After 2 Years of FIRE


Reflecting on our finances after experiencing a global pandemic, a recession within our first year of retirement, and living on only dividend income over the last two years has been eye-opening.

We’re honestly shocked that we spent so little and yet we never felt like we were missing out on anything. Sure, the pandemic prevented us from spending on adventures and certain activities, but if we had continued our pre-pandemic spending, we still would have spent well under our original target.

Out of everything though, the biggest shocker has been seeing our assets increase by more than $1 Million dollars without working for two years and through a global pandemic and recession.

Overall, we’d say our FIRE plan has panned out better than anticipated and we have more confidence now that we will be able to continue living only off of dividend income for the foreseeable future and that we’ll be able to weather the next recession when it comes.

On paper, we did really well. However, thinking about all of this a bit more, there is certainly more than just “math metrics” needed to evaluate success. There are other softer, less tangible criteria that need to be considered.



The FI Heroes gave their assessment of the first 2 years of FIRE. What’s yours?


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5 thoughts on “Their Finances After 2 Full Years of FIRE: Up More Than $1 Million”

  1. Pingback: Journal Club 1-21-22 – Own Your Hustle
  2. Subscribe to get more great content like this, an awesome spreadsheet, and more!
  3. Pingback: Journal Club 1-21-22 | Passive Income MD
  4. If you sold the house, where do you live? Do you have kids, cars, vacations? I’d love to spend 3k per month but don’t see how that could work.


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