FIRE (Financial Independence Retire Early) Anyone Doing This?

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snoopy7548

Diamond Member
Jan 1, 2005
8,126
5,151
146
Have to account for costs of living going up though so that 30k of expenses 1 year is maybe 40k the next year, then 50k and so on. Though I guess if you retire late and then have that money in the bank then it might be enough to last the rest of your life time.

Thankfully healthcare here in Canada is free so don't have to worry about that... though Doug Ford here in Ontario wants to privatize it, hopefully that does not go through.

If I'm not mistaken, the 4% rule takes inflation into account, as your principal will grow with an average return of something like 5-7%.
 

Red Squirrel

No Lifer
May 24, 2003
68,459
12,613
126
www.anyf.ca
If I'm not mistaken, the 4% rule takes inflation into account, as your principal will grow with an average return of something like 5-7%.

Is it really enough to keep up though? Seems like a risky thing as interest rates etc change all the time. Especially if there's any economical downturns.
 

ultimatebob

Lifer
Jul 1, 2001
25,134
2,446
126
isn't it the 4% rule?
if your yearly expenses is $30k then 30k/.04 = $750k needed to retire??? :eek:

4% of $750k = $30k
conservative stock portfolio (40% stock/60% bonds) should keep up with inflation, on avg.

and as a safety buffer, you have social security later in life.

now the main problem is health care...

I thought that the rule was always 10% of gross income. I think that I've managed to save that much annually on average, but only because I'd had "help" with company 401K matching and corporate pension plans. I saved about 7%, and they covered the difference.
 

skull

Platinum Member
Jun 5, 2000
2,209
327
126
Have to account for costs of living going up though so that 30k of expenses 1 year is maybe 40k the next year, then 50k and so on. Though I guess if you retire late and then have that money in the bank then it might be enough to last the rest of your life time. You don't want to depend on any sort of investment for retirement money as you are screwed if there is a market crash. Though you can invest some of it to cash out later to buy toys etc. Only invest money you can afford to lose. The money you live off of should be liquid.

Thankfully healthcare here in Canada is free so don't have to worry about that... though Doug Ford here in Ontario wants to privatize it, hopefully that does not go through.

Inflation is 2% a year not 25%, funny when yedi posted this morning I came close to replying que red squirrel saying the costs of living keep going up. Here you are to make more exaggerated claims that have no basis in reality.
 

Red Squirrel

No Lifer
May 24, 2003
68,459
12,613
126
www.anyf.ca
Inflation is 2% a year not 25%, funny when yedi posted this morning I came close to replying que red squirrel saying the costs of living keep going up. Here you are to make more exaggerated claims that have no basis in reality.

I'm just going by my own experience. My costs of living go up by around 10% each year give or take. (never said 25%) Municipal taxes are the overall worst. Some costs are not as drastic but that bill alone is what hits the hardest.
 

Exterous

Super Moderator
Jun 20, 2006
20,481
3,601
126
Is it really enough to keep up though? Seems like a risky thing as interest rates etc change all the time. Especially if there's any economical downturns.

They backtested it for a 30 year withdrawal period against the US market using a 50/50 stock/bond portfolio and it never failed for the entirety of the US market history. So it includes all the downturns like the Great Depression, Great Recession and high inflation of the 70s and 80s. My guess would be Canada would also fare well but it doesn't work for some countries like Japan or the UK

https://www.forbes.com/sites/wadepf...o-success-rates-updated-to-2018/#6a1199c66860

But its also just viewed as a planning tool\rough target. In reality you'd use a variable withdrawal rate to adjust to changing market conditions
 

skull

Platinum Member
Jun 5, 2000
2,209
327
126
I'm just going by my own experience. My costs of living go up by around 10% each year give or take. (never said 25%) Municipal taxes are the overall worst. Some costs are not as drastic but that bill alone is what hits the hardest.

I still don't believe you because you don't know how to do math ala 30k to 40k is 33% 40k to 50k is 25%.
 

skull

Platinum Member
Jun 5, 2000
2,209
327
126
Lets see some proof of this 10% increase in expenses if municipal taxes are the worst did they start out at 400/year and end up at 1037/year over 10 years or did they start out at 3000 and end up at 7781. Because if its the first I could see that happening and it wouldn't be hard to absorb, the second would be ridiculous. I'm betting this is also some one time expense your leaving out like yall needed a new water treatment plant and it was voted to raise rates 10% a year for so many years til it was paid for? Then if rates stay where they end up they'll have enough money to pay for stuff like this is the future and won't have to keep raising rates.
 

Ken g6

Programming Moderator, Elite Member
Moderator
Dec 11, 1999
16,360
4,066
75
I hate threads like these. I'm nowhere near where I want to be, am in no position to amass wealth, and have no expectation of retiring early. Debt needs paid down, and the big moments in life still need to happen (I'm a bachelor, no kids or anything, just a mortgage that serves to tie me down at the moment).
Don't think of it like that. Think of it as investing your money and getting a good guaranteed rate of return. It's also probably improving your credit score, so if you need money you can get a loan more easily. If, for instance, you were to set up a home equity line of credit for emergencies (and not use it unless there was an emergency), you might be able to invest more money into your mortgage and pay it off sooner.
 

JEDI

Lifer
Sep 25, 2001
29,391
2,736
126
They backtested it for a 30 year withdrawal period against the US market using a 50/50 stock/bond portfolio and it never failed for the entirety of the US market history. So it includes all the downturns like the Great Depression, Great Recession and high inflation of the 70s and 80s. My guess would be Canada would also fare well but it doesn't work for some countries like Japan or the UK

https://www.forbes.com/sites/wadepf...o-success-rates-updated-to-2018/#6a1199c66860

But its also just viewed as a planning tool\rough target. In reality you'd use a variable withdrawal rate to adjust to changing market conditions
hm.. wonder why it doesn't work for Japan or the UK?
 

Red Squirrel

No Lifer
May 24, 2003
68,459
12,613
126
www.anyf.ca
Lets see some proof of this 10% increase in expenses if municipal taxes are the worst did they start out at 400/year and end up at 1037/year over 10 years or did they start out at 3000 and end up at 7781. Because if its the first I could see that happening and it wouldn't be hard to absorb, the second would be ridiculous. I'm betting this is also some one time expense your leaving out like yall needed a new water treatment plant and it was voted to raise rates 10% a year for so many years til it was paid for? Then if rates stay where they end up they'll have enough money to pay for stuff like this is the future and won't have to keep raising rates.


10% is just a rough estimate, I sat down and calculated once and it came up to around that. Maybe it's like 8 or something, I don't remember, just rounding off.

I don't really remember how much I paid in taxes when I first bought the house and my bank statements don't go back that far, but it was probably in the order of like 200-300/mo and now it's about 400, then water is another 100, it was like 60ish before. Nothing is ever a "1 time increase". They did increase it because of a new water treatment plant which is STILL not done (they actually have to completely rebuild one of te buildings because it's sinking) , but those increases are cumulative every year. Then they increase it on top of those increases.
 

skull

Platinum Member
Jun 5, 2000
2,209
327
126
10% is just a rough estimate, I sat down and calculated once and it came up to around that. Maybe it's like 8 or something, I don't remember, just rounding off.

I don't really remember how much I paid in taxes when I first bought the house and my bank statements don't go back that far, but it was probably in the order of like 200-300/mo and now it's about 400, then water is another 100, it was like 60ish before. Nothing is ever a "1 time increase". They did increase it because of a new water treatment plant which is STILL not done (they actually have to completely rebuild one of te buildings because it's sinking) , but those increases are cumulative every year. Then they increase it on top of those increases.

So you can't remember its either a 33% or 100% total increase since you've lived there at how many years? Of course its going to keep going up but it shouldn't keep being drastic.

That was one hell of a guess , of course the increases are cumulative just like the examples I gave in the last post its ten 10% on 10% and so on otherwise 10% times ten years would be an even double at 100%. You should look up the bill they put through to raise the rates guessing its no where near as vicious as you've made it up to be. Which we can already see it isn't because if you've lived there 10 years and its went up 100% thats 7.2% a year not 10%, which I doubt its even went up that much 10 years in a row.

Thats not even touching the fact that there is no way everything else in your life is going up anywhere near 10% year over year, you're full of shit. You should sit down and learn some math and go over it all, it'd be good for you.

Then you'll be able to see the 30,000/year in expenses would be more like $30,600 the next not $40,000.

Edit Made math mistakes while telling someone else to learn to do math.
 
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overst33r

Diamond Member
Oct 3, 2004
5,761
12
81
A lot of the folks part of this movement do not understand the 4% rule that many are basing their "number" on.
i.e. a person retiring at today ~40 with a ~45 year projected retirement should not rely on a 4% SWR especially with expected returns being lower based on today's high valuation. It's a good starting point, but FIRE time horizons are much longer than the Trinity study was based on. I think 3% SWR, perhaps as high as 3.5% are more reasonable.

https://earlyretirementnow.com/2016/04/15/pros-and-cons-of-different-withdrawal-rate-rules/
 

Blackjack200

Lifer
May 28, 2007
15,995
1,686
126
This is why I largely stay out of self-praising threads. I try to be happy with what I got, but what I got isn't all that much, and what I do have is largely thanks to debt.

You really get a peak behind the curtain in these brag threads. Imagine needing to impress people so badly. Posting about your challenges, like you're doing, takes guts and emotional maturity.
 

zinfamous

No Lifer
Jul 12, 2006
111,136
30,086
146
Is it really enough to keep up though? Seems like a risky thing as interest rates etc change all the time. Especially if there's any economical downturns.

Yes--it's designed for an extended number of years and takes into account cyclical recessions. But I remember it being closer to 3% and not 4%
 

skull

Platinum Member
Jun 5, 2000
2,209
327
126
Planning my retirement in SE Asia due to being out priced any were in the US.

How much can you buy a place for in SE Asia? An article I read on living abroad not too long ago, had rent for a 1 bedroom apartment at $400/month+ anywhere they considered safe. Which is what I pay for PITI on my 2 bedroom fixer upper house in the midwest.
 

Dr. Detroit

Diamond Member
Sep 25, 2004
8,257
713
126
How much can you buy a place for in SE Asia? An article I read on living abroad not too long ago, had rent for a 1 bedroom apartment at $400/month+ anywhere they considered safe. Which is what I pay for PITI on my 2 bedroom fixer upper house in the midwest.

Exactly - There are plenty of LCOL places in the US that I would rather live than a foreign country in SE asia.

I just assume the allure of cheap sex is what attracts people to SE asia.
 

Raincity

Diamond Member
Feb 17, 2000
4,477
12
81
Exactly - There are plenty of LCOL places in the US that I would rather live than a foreign country in SE asia.

I just assume the allure of cheap sex is what attracts people to SE asia.


Naw its the cheap beer I am interested in.
 

Svnla

Lifer
Nov 10, 2003
17,986
1,388
126
OP, I have been to numerous developing countries around the world and there are a few things that I am not sure I want to deal with if I want to retire over there.

1. Traffic. Horrible. Too many people and vehicles with too little infrastructure. If you think NYC, DC, LA are bad, you ain't see nothing yet.

2. Corruption. From the traffic cop to government officials, you are expected to pay them off (greasy palm).

3. Pollution. Air and Noise are the worse ones. So noisy and too many vehicles = massive exhaust fume = bad for your breathing.
 

Red Squirrel

No Lifer
May 24, 2003
68,459
12,613
126
www.anyf.ca
OP, I have been to numerous developing countries around the world and there are a few things that I am not sure I want to deal with if I want to retire over there.

1. Traffic. Horrible. Too many people and vehicles with too little infrastructure. If you think NYC, DC, LA are bad, you ain't see nothing yet.

2. Corruption. From the traffic cop to government officials, you are expected to pay them off (greasy palm).

3. Pollution. Air and Noise are the worse ones. So noisy and too many vehicles = massive exhaust fume = bad for your breathing.

Sounds like most big cities to me. :p Hence why I don't really want to live in one either. Though the 3rd world country ones are much worse than 1st world country ones.
 

Raincity

Diamond Member
Feb 17, 2000
4,477
12
81
OP, I have been to numerous developing countries around the world and there are a few things that I am not sure I want to deal with if I want to retire over there.

1. Traffic. Horrible. Too many people and vehicles with too little infrastructure. If you think NYC, DC, LA are bad, you ain't see nothing yet.

2. Corruption. From the traffic cop to government officials, you are expected to pay them off (greasy palm).

3. Pollution. Air and Noise are the worse ones. So noisy and too many vehicles = massive exhaust fume = bad for your breathing.

Yep were I am going. Everything you mention is a big problem in the Metro area. But I am planning a simple life in the country. I dont care about internet speeds and cell service. Taking it easy in a relaxed friendly environment is what I am after.
 

Red Squirrel

No Lifer
May 24, 2003
68,459
12,613
126
www.anyf.ca
Yep were I am going. Everything you mention is a big problem in the Metro area. But I am planning a simple life in the country. I dont care about internet speeds and cell service. Taking it easy in a relaxed friendly environment is what I am after.

That''s my goal too. Crappy internet would be one downside, but I'd learn to live with it. Probably get satellite. I'd have plenty of stuff to do on the property anyway.
 
Nov 8, 2012
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I would say that this is indirectly related to the OP topic (Financial independence) but moreso it really helps illustrate essentially... why people are financially well off, and why people are poor.

You can easily relate this to the topic because if you want to be financially independent, well off, and retire early - you better be following the majority of these: