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Financial Independence / Retire Early Calculator

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Re: Financial Independence / Retire Early Calculator

#51

Post by auxym »

holoduke wrote: post #24

I see a lot of people wanting to retire as early as possible. Most of those never are able too. Then I know some people who are able to retire right now. But they don't. I fall in the latter category. And my theory is that once you get enough income you can actually do what you like. In my case still coding, but only projects I like to do. But I will probably never retire. Way too boring.

I used to want to retire early and ASAP, firmly in the "lean fire" category.

Then I found a job which pays significantly under market but that I actually enjoy doing. My priorities have changed a lot.

Unfortunately said job is highly unstable and provides little opportunity for transferrable skills, so I still aim for a 50% savings rate, for peace of mind.

Re: Financial Independence / Retire Early Calculator

#52

Post by auxym »

randomopining wrote: post #23

Who wants to “retire” and do nothing for the rest of your life? Just save a ton, buy whatever stuff truly makes you happy, and your savings give you flexibility. Like taking a year off between jobs, etc.

Buying stuff is not a universal recipe for happiness.

Neither is retirement, obviously, but you are correct that being financially independent gives you the freedom do do what you want. Whether that is time off between jobs, working on independent projects, etc.

Re: Financial Independence / Retire Early Calculator

#53

Post by satellite2 »

gjsman-1000 wrote: post #8
rebelos wrote: post #7

Earlier quoted context omitted.

This shouldn't be a problem if you're invested. There's a reason the S&P went up almost 30% this year - a lot of it was an adjustment for the boost in money supply.

To me, even though the experts say otherwise, this feels very pre-2008. I know the experts are saying to have no fear... but that's what they were saying in pre-2008 too. I guess I'm too nervous to invest and that's on me.

The key difference is that central bankers were in a very different state of mind in 2008. MMT realy imposed itself post 2008.

So while it's relevant to brace for a small crash due to interest rates adjustments if inflation continues, I wouldn't bet on a full scale snowballing cash grab, that killed relatively healthy institutions like in 2008.

Short term money market have been greatly improved and central banks have shown multiple times their readiness to intervene.

The part that is always glossed over in MMT is that taxation is thr regulatory factor. Except that in this low trust political climate it's absolutely impossible that anyone manages to raises taxes.

Thus, I think that inflation is the greatest of current risks. Especially unacounted inflation (housing, healthcare services...).

Re: Financial Independence / Retire Early Calculator

#54

Post by rebelos »

satellite2 wrote: post #53
gjsman-1000 wrote: post #8

Earlier quoted context omitted.

To me, even though the experts say otherwise, this feels very pre-2008. I know the experts are saying to have no fear... but that's what they were saying in pre-2008 too. I guess I'm too nervous to invest and that's on me.

The key difference is that central bankers were in a very different state of mind in 2008. MMT realy imposed itself post 2008. So while it's relevant to brace for a small crash due to interest rates adjustments if inflation continues, I wouldn't bet on a full scale snowballing cash grab, that killed relatively healthy institutions like in 2008. Short term money market have been greatly improved and central banks have…

> The key difference is that central bankers were in a very different state of mind in 2008. MMT realy imposed itself post 2008.

> So while it's relevant to brace for a small crash due to interest rates adjustments if inflation continues, I wouldn't bet on a full scale snowballing cash grab, that killed relatively healthy institutions like in 2008.

This is a dangerous view because you're assuming the Fed won't be backed into a corner like Volcker. They may end up having to choose between the markets and the integrity of the dollar. When entertaining the counterfactual, it seems in hindsight like Volcker made the right call (and many economists endorse that notion), even though it manifested considerable short term pain.

Re: Financial Independence / Retire Early Calculator

#55

Post by satellite2 »

rebelos wrote: post #54
satellite2 wrote: post #53

Earlier quoted context omitted.

The key difference is that central bankers were in a very different state of mind in 2008. MMT realy imposed itself post 2008. So while it's relevant to brace for a small crash due to interest rates adjustments if inflation continues, I wouldn't bet on a full scale snowballing cash grab, that killed relatively healthy institutions like in 2008. Short term money market have been greatly improved and central banks have…

> The key difference is that central bankers were in a very different state of mind in 2008. MMT realy imposed itself post 2008. > So while it's relevant to brace for a small crash due to interest rates adjustments if inflation continues, I wouldn't bet on a full scale snowballing cash grab, that killed relatively healthy institutions like in 2008. This is a dangerous view because you're assuming the Fed won't be bac…

I think the situation might be similar that's right. But Volcker increasing rates took a lot of time to curb inflation and didn't cause a crash like in 2008.

Re: Financial Independence / Retire Early Calculator

#56

Post by cheschire »

loeg wrote: post #13
gjsman-1000 wrote: post #4

For the uninitiated, this calculator is actually for a broader movement called FIRE (Financial Independence Retire Early). They have subreddits at r/financialindependence and r/fire, and variants for the more ambitious like FatFIRE. The general FIRE modus operandi is to live very financially frugally for a period of time (several years or more) to save as much money as possible to, well, retire early (or at least be…

> The general FIRE modus operandi is to live very financially frugally for a period of time (several years or more) to save as much money as possible to, well, retire early (or at least be comfortable with a less intensive and lower paying job). This is a subset. The only real mechanism/requirement is saving enough to retire or be financially independent, over whatever timeframe you want. That means typically means 2…

There're several illegal ways as well.

Re: Financial Independence / Retire Early Calculator

#57

Post by gombosg »

randomopining wrote: post #23

Who wants to “retire” and do nothing for the rest of your life? Just save a ton, buy whatever stuff truly makes you happy, and your savings give you flexibility. Like taking a year off between jobs, etc.

> Just save a ton, buy whatever stuff truly makes you happy, and your savings give you flexibility.

Retirement simply means that you could just live off of your savings interest. But that doesn't mean that you have to stop working.

For me, this is about three things: 1) Prioritizing joyful experiences, social connections, self-development and happiness over (expensive) material possessions 2) Being financially responsible, knowing how much I earn, owe, spend and save 3) Maximizing future life options involving less well-paying jobs (working part-time, retiring, taking some time off, starting a new career, whatever) when I get bored/burnt out of my current career or get health issues, need to look after a family member etc. So much can happen in a life.

Re: Financial Independence / Retire Early Calculator

#58

Post by cercatrova »

holoduke wrote: post #24

I see a lot of people wanting to retire as early as possible. Most of those never are able too. Then I know some people who are able to retire right now. But they don't. I fall in the latter category. And my theory is that once you get enough income you can actually do what you like. In my case still coding, but only projects I like to do. But I will probably never retire. Way too boring.

That's why there's a distinction between FI (financial independence) and RE (retire early). One can be financially independent without having to retire early. You also might be missing the definition of retirement that's usually used in FIRE, which is that you can go do whatever you want without needing to treat it as a job; it doesn't mean to just laze around on a beach somewhere as one might normally think of retirement.

Re: Financial Independence / Retire Early Calculator

#59

Post by loeg »

cercatrova wrote: post #58
holoduke wrote: post #24

I see a lot of people wanting to retire as early as possible. Most of those never are able too. Then I know some people who are able to retire right now. But they don't. I fall in the latter category. And my theory is that once you get enough income you can actually do what you like. In my case still coding, but only projects I like to do. But I will probably never retire. Way too boring.

That's why there's a distinction between FI (financial independence) and RE (retire early). One can be financially independent without having to retire early. You also might be missing the definition of retirement that's usually used in FIRE, which is that you can go do whatever you want without needing to treat it as a job; it doesn't mean to just laze around on a beach somewhere as one might normally think of retir…

> just laze around on a beach somewhere as one might normally think of retirement.

This is also a weird thing to think about "normal" retirement.

Re: Financial Independence / Retire Early Calculator

#60

Post by loeg »

cheschire wrote: post #56
loeg wrote: post #13

Earlier quoted context omitted.

> The general FIRE modus operandi is to live very financially frugally for a period of time (several years or more) to save as much money as possible to, well, retire early (or at least be comfortable with a less intensive and lower paying job). This is a subset. The only real mechanism/requirement is saving enough to retire or be financially independent, over whatever timeframe you want. That means typically means 2…

There're several illegal ways as well.

I think that is already covered under lower your expenses or raise your income.
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