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Your FIRE (Financial Independence, Retire Early) Number?

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OasisMan
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In reply to [removed post] • 8:08a, 1/14/21
AG
SoupNazi2001 said:
...the 4% withdrawal number was...
testing SWR from 3-12%, every 30yr period from 1926-1995, backtesting the S&P






they found that "A 100% allocation to stocks and a 3.5% withdrawal rate still have more than a 98% success rate (50yr period)."


depending on your portfolio and your "SWR," you might even end up accumulating even more during retirement -- also, in down years you could potentially take less


will be interesting to see if/how my mindset changes as i near FI +/- RE
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RangerRick9211
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In reply to 10andBOUNCE • 9:35a, 1/14/21
AG
10andBOUNCE said:
I feel like an lolpoor after reading the replies here.
I would nudge a bit of encouragement that we've all been there and that at some point, it really is a blink and you go from solid to woah savings. Do your journey your way - comparison is a thief yada yada.

For us, it took 8 years to get to $500k. It only took another 3 to reach two commas. The power of compound returns will start doing it's thing. Just keep consistently shoveling in the dollars and keep the life inflation low.
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JamesBREI06
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10:47a, 1/14/21
AG
This has been a fun read. The ability to delay gratification is probably the most potent arrow in the quiver.
Whoop!
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YouBet
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In reply to RangerRick9211 • 10:54a, 1/14/21
AG
RangerRick9211 said:
10andBOUNCE said:
I feel like an lolpoor after reading the replies here.
I would nudge a bit of encouragement that we've all been there and that at some point, it really is a blink and you go from solid to woah savings. Do your journey your way - comparison is a thief yada yada.

For us, it took 8 years to get to $500k. It only took another 3 to reach two commas. The power of compound returns will start doing it's thing. Just keep consistently shoveling in the dollars and keep the life inflation low.
Yep. If you have a long time horizon the best thing you can do is keep investing throughout a downturn (assuming we don't fundamentally change as a country going forward). I was absolutely floored coming out of 2008 how quickly we jumped into 7 figures and it's because we maxed everything throughout the entirety of that downturn coupled with the previous 10 years of investing and just kept going. Next thing you know we had 40%+ returns coming out of that and it was a rocket ship.

The big boys aren't predicting a downturn within the next year but when one happens the younger folks on here need to plow money into the market while it's down.
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10andBOUNCE
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In reply to RangerRick9211 • 11:00a, 1/14/21
AG
RangerRick9211 said:
10andBOUNCE said:
I feel like an lolpoor after reading the replies here.
I would nudge a bit of encouragement that we've all been there and that at some point, it really is a blink and you go from solid to woah savings. Do your journey your way - comparison is a thief yada yada.

For us, it took 8 years to get to $500k. It only took another 3 to reach two commas. The power of compound returns will start doing it's thing. Just keep consistently shoveling in the dollars and keep the life inflation low.

Thanks. I'm a finance guy by trade and enjoy these discussions. For a few years out of college and marriage life was on a similar trajectory as many here. Life happens and priorities change - I suppose that is why they call it Personal Finance. We decided my wife should be a stay at home mom and I put them above anything career wise for me, so my long term earning power just isn't gonna carry a big bang realistically. Thankfully we invested and saved a lot on the front end, so as long as the market gives us ~9% on avg per year over the next 25 years we should have a few mil by 59/60.
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FrioAg 00
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In reply to JamesBREI06 • 11:06a, 1/14/21
AG
No doubt. I may be the only Honda on my level of the parking garage, and I love it.

The measure I focus on is what I spend (not counting principle payments against debt) divided by my income after taxes.

In 2020 I came in at 22%, and due to some nice increases on the income side I should be around 19% this year depending on my ability to avoid impulse purchases.
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YouBet
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In reply to FrioAg 00 • 11:19a, 1/14/21
AG
FrioAg 00 said:
No doubt. I may be the only Honda on my level of the parking garage, and I love it.

The measure I focus on is what I spend (not counting principle payments against debt) divided by my income after taxes.

In 2020 I came in at 22%, and due to some nice increases on the income side I should be around 19% this year depending on my ability to avoid impulse purchases.


Yes, in hindsight if we had controlled our spending better my early retirement could have been permanent retirement. Still could be if my wife stays where she is, but she could have probably hung it up as well with me with better spending habits.

Oh well. I did really enjoy all those margaritas though!
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Goldie Wilson
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In reply to RangerRick9211 • 11:25a, 1/14/21
RangerRick9211 said:


For us, it took 8 years to get to $500k. It only took another 3 to reach two commas. The power of compound returns will start doing it's thing. Just keep consistently shoveling in the dollars and keep the life inflation low.
Completely agree with this. Between student loans, saving for first down payment, etc., the first $500k took forever. From there it's kind of snowballed.
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JamesBREI06
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In reply to YouBet • 7:05p, 1/14/21
AG
YouBet said:
FrioAg 00 said:
No doubt. I may be the only Honda on my level of the parking garage, and I love it.

The measure I focus on is what I spend (not counting principle payments against debt) divided by my income after taxes.

In 2020 I came in at 22%, and due to some nice increases on the income side I should be around 19% this year depending on my ability to avoid impulse purchases.


Yes, in hindsight if we had controlled our spending better my early retirement could have been permanent retirement. Still could be if my wife stays where she is, but she could have probably hung it up as well with me with better spending habits.

Oh well. I did really enjoy all those margaritas though!


Definitely a give and take, but if you enjoyed the margaritas then those were the right call! We spend plenty and could certainly spend less, but I'm doing things now to increase my passive income moving into the future. It helps that I enjoy what i get to do.
Whoop!
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dallasag12
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8:28p, 1/14/21
AG
Glad to have come across this thread as it actually got me thinking about what my wife & I's target really is. So far all we did was save a ton with a monthly goal, but never really looked more than 5+ years out.

We think our target is $6.5M or so for a monthly spend of $18,950 at 3.5% SWR. Assuming the market averages 6-8% over the next 20-30 years, I think it's doable so long as we don't splurge on anything too fancy.
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Killin Me Smalls
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8:50p, 1/14/21
AG
$10MM

That would assume all 3 kids college educations funded and House paid off.

I think we can hit that number by 55. Youngest would be a sophomore in college. That would be great.

Healthcare would be the only barrier, but it will all be socialized by then anyways, so whatever.
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RockOn
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In reply to dallasag12 • 8:51p, 1/14/21
dallasag12 said:
Glad to have come across this thread as it actually got me thinking about what my wife & I's target really is. So far all we did was save a ton with a monthly goal, but never really looked more than 5+ years out.

We think our target is $6.5M or so for a monthly spend of $18,950 at 3.5% SWR. Assuming the market averages 6-8% over the next 20-30 years, I think it's doable so long as we don't splurge on anything too fancy.
Honest question, but is $18,950 a month considered not splurging on anything fancy?

I didn't spend $18,950 last year.
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YouBet
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In reply to RockOn • 9:03p, 1/14/21
AG
RockOn said:
dallasag12 said:
Glad to have come across this thread as it actually got me thinking about what my wife & I's target really is. So far all we did was save a ton with a monthly goal, but never really looked more than 5+ years out.

We think our target is $6.5M or so for a monthly spend of $18,950 at 3.5% SWR. Assuming the market averages 6-8% over the next 20-30 years, I think it's doable so long as we don't splurge on anything too fancy.
Honest question, but is $18,950 a month considered not splurging on anything fancy?

I didn't spend $18,950 last year.
When your wife discovers Amazon and that buying clothes online is actually more effective and easier than in person....
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Gig-Em2003
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In reply to RockOn • 9:04p, 1/14/21
AG
RockOn said:
dallasag12 said:
Glad to have come across this thread as it actually got me thinking about what my wife & I's target really is. So far all we did was save a ton with a monthly goal, but never really looked more than 5+ years out.

We think our target is $6.5M or so for a monthly spend of $18,950 at 3.5% SWR. Assuming the market averages 6-8% over the next 20-30 years, I think it's doable so long as we don't splurge on anything too fancy.
Honest question, but is $18,950 a month considered not splurging on anything fancy?

I didn't spend $18,950 last year.


For real? How much is your monthly rent/mortgage?
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RockOn
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In reply to Gig-Em2003 • 9:38p, 1/14/21
Gig-Em2003 said:
RockOn said:
dallasag12 said:
Glad to have come across this thread as it actually got me thinking about what my wife & I's target really is. So far all we did was save a ton with a monthly goal, but never really looked more than 5+ years out.

We think our target is $6.5M or so for a monthly spend of $18,950 at 3.5% SWR. Assuming the market averages 6-8% over the next 20-30 years, I think it's doable so long as we don't splurge on anything too fancy.
Honest question, but is $18,950 a month considered not splurging on anything fancy?

I didn't spend $18,950 last year.


For real? How much is your monthly rent/mortgage?
The place I'm currently renting is month to month for $650 all bills included. I work remotely, roaming around Utah/Idaho/Montana so I try not to get locked in to a lease.

When I get to a place, I'll try to ride my bicycle everywhere. I spent $636 on gas last year. No car loan, so only liability insurance but I carry $300k/$500k coverage plus an umbrella policy. Mint Mobile 3gb phone plan is $15/month (paid yearly for $213 incl tax). The rest is just food ($4,173), some trail running shoes/gear, and one big splurge of backcountry skis/boots/skins (2nd hand of course).

2020 was a really fun year too. I enjoyed the hell out of it.
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YouBet
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In reply to RockOn • 9:45p, 1/14/21
AG
This is probably extreme on the frugal end of the spectrum. I'm assuming your income is higher than the way you live though. Also, it sounds like you are single so it may not be apples to apples.

I will say covid cut our spending dramatically so from that point it was actually a good thing for us because we won't be going back to pre-covid level of spend. We've learned to live differently. Good for us....not good for the economy. And me not working cut it even more.
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Keeper of The Spirits
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9:48p, 1/14/21
AG
Just remember if you die tomorrow that money won't we worth anything
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RockOn
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In reply to YouBet • 9:57p, 1/14/21
Yes income is decently high, but not crazy. I paid more in federal/FICA taxes than I spent, even after maxing out 401k and HSA.

It's almost structured frugality. If I buy something, then I have to tote it around to the next place and I have only so much I can fit in my car. So it better be worth it. And I don't have time to spend money - work until 3 then head out to trail run, climb a mountain, backcountry ski - all free hobbies.
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YouBet
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In reply to RockOn • 9:59p, 1/14/21
AG
RockOn said:
Yes income is decently high, but not crazy. I paid more in federal/FICA taxes than I spent, even after maxing out 401k and HSA.

It's almost structured frugality. If I buy something, then I have to tote it around to the next place and I have only so much I can fit in my car. So it better be worth it. And I don't have time to spend money - work until 3 then head out to trail run, climb a mountain, backcountry ski - all free hobbies.


Lucky bas^ard.
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GE
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In reply to Keeper of The Spirits • 10:22p, 1/14/21
AG
Keeper of The Spirits said:
Just remember if you die tomorrow that money won't we worth anything
How do you figure?
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John Francis Donaghy
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In reply to RockOn • 11:29p, 1/14/21
RockOn said:
Yes income is decently high, but not crazy. I paid more in federal/FICA taxes than I spent, even after maxing out 401k and HSA.

It's almost structured frugality. If I buy something, then I have to tote it around to the next place and I have only so much I can fit in my car. So it better be worth it. And I don't have time to spend money - work until 3 then head out to trail run, climb a mountain, backcountry ski - all free hobbies.
Where did my life go so wrong to end up in a damn office job in Dallas....
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dallasag12
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In reply to RockOn • 6:12a, 1/15/21
AG
RockOn said:
dallasag12 said:
Glad to have come across this thread as it actually got me thinking about what my wife & I's target really is. So far all we did was save a ton with a monthly goal, but never really looked more than 5+ years out.

We think our target is $6.5M or so for a monthly spend of $18,950 at 3.5% SWR. Assuming the market averages 6-8% over the next 20-30 years, I think it's doable so long as we don't splurge on anything too fancy.
Honest question, but is $18,950 a month considered not splurging on anything fancy?

I didn't spend $18,950 last year.


Seems like other posters have already asked what I was thinking. Our annual mortgage + property tax expenses already surpass that and we only have about a 2,500 sq.ft. house so it's not like we are splurging there. Different strokes for different folks.

After looking back at my model, I am more and more impressed by the power of compounding. I don't think think younger people can have compounding and investing patience beaten into their heads enough. My kiddos will probably get sick and tired of hearing the word compounding, but compounding will be paying for their college and hopefully giving them a little starter for their own nest egg.
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Charismatic Megafauna
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6:49a, 1/15/21
AG
Compounding is such an abstract concept out minds really aren't wired to understand it. Dr. Albert Bartlett provided my favorite illustration of it:

Suppose I had a magic eye dropper and I placed a single drop of water in the middle of your left hand. The magic part is that this drop of water is going to double in size every minute.

At first nothing seems to be happening, but by the end of a minute, that tiny drop is now the size of two tiny drops.

After another minute, you now have a little pool of water that is slightly smaller in diameter than a dime sitting in your hand.

After six minutes, you have a blob of water that would fill a thimble.

Now suppose we take our magic eye dropper to Fenway Park, and, right at 12:00 p.m. in the afternoon, we place a magic drop way down there on the pitcher's mound.

To make this really interesting, suppose that the park is watertight and that you are handcuffed to one of the very highest bleacher seats.

My question to you is, "How long do you have to escape from the handcuffs?" When would it be completely filled? In days? Weeks? Months? Years? How long would that take?

I'll give you a few seconds to think about it.

The answer is, you have until 12:49 on that same day to figure out how you are going to get out of those handcuffs. In less than 50 minutes, our modest little drop of water has managed to completely fill Fenway Park.

Now let me ask you this at what time of the day would Fenway Park still be 93% empty space, and how many of you would realize the severity of your predicament?

Any guesses? The answer is 12:45. If you were squirming in your bleacher seat waiting for help to arrive, by the time the field is covered with less than 5 feet of water, you would now have less than 4 minutes left to get free.

And that, right there, illustrates one of the key features of compound growththe one thing I want you take away from all this. With exponential functions, the action really only heats up in the last few moments.

We sat in our seats for 45 minutes and nothing much seemed to be happening, and then in four minutes bang! the whole place was full
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Charismatic Megafauna
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In reply to John Francis Donaghy • 6:51a, 1/15/21
AG
John Francis Donaghy said:
RockOn said:
Yes income is decently high, but not crazy. I paid more in federal/FICA taxes than I spent, even after maxing out 401k and HSA.

It's almost structured frugality. If I buy something, then I have to tote it around to the next place and I have only so much I can fit in my car. So it better be worth it. And I don't have time to spend money - work until 3 then head out to trail run, climb a mountain, backcountry ski - all free hobbies.
Where did my life go so wrong to end up in a damn office job in Dallas....

Perhaps you have larger aspirations than just getting by? Perhaps rockon does too, and this is a temporary lifestyle
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tsuag10
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In reply to RockOn • 7:17a, 1/15/21
AG
RockOn said:
Yes income is decently high, but not crazy. I paid more in federal/FICA taxes than I spent, even after maxing out 401k and HSA.

It's almost structured frugality. If I buy something, then I have to tote it around to the next place and I have only so much I can fit in my car. So it better be worth it. And I don't have time to spend money - work until 3 then head out to trail run, climb a mountain, backcountry ski - all free hobbies.
Let me take a wild guess and say you aren't married and don't have kids....
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QBCade
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In reply to RockOn • 1:59p, 1/15/21
AG
RockOn said:
dallasag12 said:
Glad to have come across this thread as it actually got me thinking about what my wife & I's target really is. So far all we did was save a ton with a monthly goal, but never really looked more than 5+ years out.

We think our target is $6.5M or so for a monthly spend of $18,950 at 3.5% SWR. Assuming the market averages 6-8% over the next 20-30 years, I think it's doable so long as we don't splurge on anything too fancy.
Honest question, but is $18,950 a month considered not splurging on anything fancy?

I didn't spend $18,950 last year.


Depends. As others have said, having wife & kids really drives up the monthly spend.
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In reply to QBCade • 8:21p, 1/15/21
ABATTBQ11
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In reply to tsuag10 • 8:24p, 1/15/21
AG
tsuag10 said:
RockOn said:
Yes income is decently high, but not crazy. I paid more in federal/FICA taxes than I spent, even after maxing out 401k and HSA.

It's almost structured frugality. If I buy something, then I have to tote it around to the next place and I have only so much I can fit in my car. So it better be worth it. And I don't have time to spend money - work until 3 then head out to trail run, climb a mountain, backcountry ski - all free hobbies.
Let me take a wild guess and say you aren't married and don't have kids....


THIS. And it goes beyond just then spending money or spending money on them.

With a wife, you have to balance where you live with where you both work. That can limit your renting/buying options considerably. In my case, we work 20+ miles apart. There's no way one of us is riding a bike while the other commutes across San Antonio.

Having kids puts you in the same boat. You, generally, want to live in a good school district, and that further limits your options. It also, generally, comes with a higher property tax bill.

Kids also dictate your house size. You can get by on your own or with a wife in a tiny place, but you WILL want, and IMO need, a larger place with kids. You don't want them sleeping in your room, and there will be plenty of times you need more than one bathroom. This further limits your renting/buying options.

You also can't just up and move for a higher paying job on another city, so your ability to climb the ladder or chase money is more limited.

You HAVE to have a car with kids. You're not biking them to a friend's house, or the pediatrician, or daycare, or a myriad of other places.
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ABATTBQ11
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In reply to RockOn • 8:30p, 1/15/21
AG
RockOn said:
dallasag12 said:
Glad to have come across this thread as it actually got me thinking about what my wife & I's target really is. So far all we did was save a ton with a monthly goal, but never really looked more than 5+ years out.

We think our target is $6.5M or so for a monthly spend of $18,950 at 3.5% SWR. Assuming the market averages 6-8% over the next 20-30 years, I think it's doable so long as we don't splurge on anything too fancy.
Honest question, but is $18,950 a month considered not splurging on anything fancy?

I didn't spend $18,950 last year.


$19k seems all inclusive. Health insurance, mortgage/rent, property taxes, home insurance... That all adds up quick. We're pretty frugal, but if I weren't working, those alone would add up to around $3500/mth. That's with a fairly cheap house. With a nice home in a better neighborhood and school district, it could be double that.

Then add food, car insurance, utilities, hobbies and things to do during retirement, and you could take on a few more thousand. In a higher cost of living location like parts of NY or CA, $19k a month is totally doable while still being "frugal".
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RangerRick9211
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In reply to ABATTBQ11 • 7:58a, 1/16/21
AG
ABATTBQ11 said:
tsuag10 said:
RockOn said:
Yes income is decently high, but not crazy. I paid more in federal/FICA taxes than I spent, even after maxing out 401k and HSA.

It's almost structured frugality. If I buy something, then I have to tote it around to the next place and I have only so much I can fit in my car. So it better be worth it. And I don't have time to spend money - work until 3 then head out to trail run, climb a mountain, backcountry ski - all free hobbies.
Let me take a wild guess and say you aren't married and don't have kids....
You HAVE to have a car with kids. You're not biking them to a friend's house, or the pediatrician, or daycare, or a myriad of other places.
I won't pontificate on the rest - well, except to say $19k is a lot.

But I've been WFH for almost a year now. I used to travel a lot or work in DT Houston. Anything beyond my normal commute to the home office is billable. For the past 3 years I spent a lot of time commuting on my bike from the Heights to DT (we have a full gym and showers in the office). If I need to go to a client, per firm policy, I just Uber and bill it.

We live in the Heights so our location is advantageous for a single car household. I sold my car in the summer of last year because of WFH. Wife works in the Med Center and has a car. I bike our daughter to day care every day. I bike her to the park and to our "bubble" friends' houses. In December I also biked her to her 2 year check up at TCH Heights. It's only been a handful of times we wished we had two cars.

I think it slots well into the philosophy of minimizing the maintenance costs and maximizing your time. Not only have a trimmed some costs, but I'm adding quality time with my daughter, putting some more volume miles into my legs, and making my commute less stressful (even if a few minutes longer).

Yeah, the summers suck. Like really suck. But during the summer I typically get my rides in at 4A (~200-250 miles/wk). I'm already disgusting for the daycare and commute rides.
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Ed Carter
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In reply to tsuag10 • 9:03a, 1/16/21
AG
LOL this x1000
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Ed Carter
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In reply to Keeper of The Spirits • 9:06a, 1/16/21
AG
Keeper of The Spirits said:
Just remember if you die tomorrow that money won't we worth anything


I get what you're saying but this is such a tired argument. I have a wife and children, and if I died tomorrow what I have accomplished financially in this life will continue to impact theirs moving forward.

Even if you don't have direct family beneficiaries, I'm sure a charity or two of your choice would not consider a large financial donation to be inconsequential.

It's all about balance.
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YouBet
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9:31a, 1/16/21
AG
19k is a lot, however you can easily attain that with housing closer to a city center, eating out all the time, and if your wife has a nice little executive clothing habit. I know because we lived it. We were DINKS who hit our savings goals first and then everything else was gravy. Could have obviously saved way more with more discipline but, hey, we didn't.

One year later and those days are over. Our spending now is what it takes to cover our fixed costs and hit our savings goals. She has enough clothing for six women at this point, so she no longer buys any at all outside the occasional casual shirt. She also stopped drinking so not buying clothes, eating out about 90% less, and not purchasing wine at the level we were by themselves is huge.

The surrounding impacts of COVID have been a life changing event for us. It forced a reset in many ways. We've pretty much cut everything we reasonably can without majoring in minors at this point. Next move the needle cut would be to move which is in serious contemplation as previously noted. The property tax cut alone i suspect would be another $10k per year saved.
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FrioAg 00
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9:58a, 1/16/21
AG
I really don't think you should count principle portion of debt payments against you're going to "cost of living". Only taxes, interest and maintenance.

In my long term projection I exclude ppmt but also exclude real estate equity in my "invested assets" value target. Those assets will not provide a spin-off income in perpetuity.

I actually discount my portfolio at target date by the remaining debt balance, basically assuming payoff. If interest rates stay far below expected return, I doubt I'd pay it off. But the added arbitrage would just be "extra" not accounted for.
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cgh1999
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10:22a, 1/16/21
AG
I have no desire to retire extra early. Kids are happy in schools with friends and all their extra curricular activities. Moving from our suburban neighborhood is a non-starter for our family.

That being said, we have set aggressive savings/investment goals to allow us full control of what, where, and how we live when the kids are off the payroll. I've got about 13 years until all kids should be standing alone financially. I'm busting my tail until that point to allow maximum flexibility.

By building up passive income (dividends, RE investment, etc), I can easily choose how hard I want to work (if at all). Goal is $100k annually without touching principal.

Options include:
- pushing for an executive management role which will fuel my ego and bank account.
- taking a similar role in a rural market which would cut my income by 50% or more, but would be a much slower/easy pace of life (as well as provide insurance and benefits until I'm eligible for Medicare/SS)
- quit and travel

Of course, if I win the lotto all bets are off!!
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