Camp FIRE Finance
A personal finance community for those seeking FIRE, by those seeking FIRE
The Rule of 25, also know as the Multiply by 25 Rule, attempts to define how much money you’ll need to save for your retirement. Not surprisingly, based on the name of the rule, that amount is 25 times your annual expenses (not income).
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From Opt Out of Mediocrity …
“Do you need $1 million to retire? I certainly don’t. Don’t get me wrong, I’m not saying I wouldn’t love to have it, I’m only saying it’s not necessary for me to have. As it stands, my annual expenses are no more than $30,000. I’m certain that, with a little geographic arbitrage, I could bring that number way down.
However, let’s assume that my annual expenditures will remain the same during retirement. How much will I need to have in savings to allow me to withdraw $30K each year, without jeopardizing my retirement security?
According to the controversial 4% safe withdrawal rule, which estimates the amount you can withdraw annually from your initial investments over a 30 year period of time, that number would be $750,000.
It’s not a million dollars, but I’ll take it. Hey, I’d even gladly accept $500,000.
The question now becomes, how does one get there?”
Keep reading … HOW TO GO FROM $0 TO $500K IN 11 YEARS
From The Money Nerds Podcast …
“Little hacks are the greatest!
Here are five back of the napkin money calculations that are sure to make you the coolest person at the party…. maybe that’s just the parties I go to”
Listen to … BACK OF THE NAPKIN CALCULATIONS
From Paula Pant at Afford Anything …
“Dr. Pfau is a Professor of Retirement Income at The American College of Financial Services.
He holds a Ph.D. in economics from Princeton. He’s a chartered financial analyst. He won two awards for “most outstanding contribution” from the Journal of Financial Planning. He won another award for “best paper in retirement planning” from the Academy of Financial Services.
This guy knows his stuff.
And he’s … cautious … about the 4 percent rule of thumb. What are his concerns? What can we expect? And how much money can we spend in retirement — whether we enjoy a traditional or early retirement? Find out in today’s episode.”
Listen to … HOW MUCH CAN I SPEND IN RETIREMENT? WITH DR. WADE PFAU
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What is FIRE and how does it work? In the world of personal finance, FIRE stands for Financial Independence Retired Early, or some variation thereof and there is a growing movement behind this concept.
Within the FIRE Movement, one is considered to be FIRE, or FIRE’d, when their living expenses can be covered by their investment returns. At that point, you are financially independent (FI) and can retire early if you so choose (RE) because work is optional for you.
But FIRE is so much more than budgeting, investments, or a math equation. FIRE is a way of life and a growing movement that is spreading across the globe and being embraced; not because people suddenly love budgeting and personal finance but because FIRE provides hope.
For anyone that’s ever felt trapped by the thought of a working career that could last into their late 60’s or early 70’s, FIRE provides a feasible alternative to the traditional path that society peddles. And once embraced, the idea of reaching financial independence and retiring early is nearly impossible to snuff out. That’s because, at its core, FIRE is reclamation of one’s personal freedom.
And people long to be free.
[Read more…] about The FIRE Movement. What is FIRE Finance and How Does it Work?