On the road to real success

[ZacharySmithR]

Hello Everyone, I'm hoping to contribute great things to a community of like minded individuals, this seems like the right place for me.

Honestly, Early Retirement is my #1 goal in life, I believe it is the meaning of true freedom. Forgive me if this is said all the time, but I'm a Frugalist, I like to live a simple life and enjoy simple things, I think I'm pretty lucky I came to recognize this dream, especially early on, not everyone has the will, determination, or opportunity to educate themselves on Finances.

I will be Financially Independent in 10 years, I track everything major, I plan everything major, of course little things change from here to there, but the big picture is Early Retirement!

Please feel free to get to know more about me, I'd love to Converse.

 

[retire2020]

Welcome to forum. You can start with sharing your current financial situation and your plans to be FI in 10 years and ask away any questions you may have.

 

[38Chevy454]

Welcome, it sounds like you have the motivation to make it happen. There is a lot of very skilled people on here, with very wise advice. Ask more specific questions and you will get great answers to help you meet your goal.

 

[heeyy_joe]

As with most projects add 20%.

 

[ZacharySmithR]

Welcome to forum. You can start with sharing your current financial situation and your plans to be FI in 10 years and ask away any questions you may have.

As per my current Financial Situtation, I have $13,800+ in a Roth Ira, and $13,800+ in an individual retirement account. $6,000+ in savings.

My plans to be FI in 10 years include saving a certain percentage of my income from this chart into my individual account, I will also max my roth IRA each year of my working years

Savings Rate Years Until Retirement
5% 66yrs
10% 51yrs
15% 43yrs
20% 37yrs
25% 32yrs
30% 28yrs
35% 25yrs
40% 22yrs
45% 19yrs
50% 17yrs
55% 14.5yrs
60% 12.5yrs
65% 10.5yrs
70% 8.5yrs
75% 7yrs
80% 5.5yrs
85% 4yrs
90% under 3yrs
95% under 2yrs
100% 0yrs

I invest in Total U.S Stock Index Funds and ETFs, I use the 4% rule to determine how much I would need, but my real goal is to beat that amount, Estimated I need $700,000 in today's dollars to be FI. I'm a pretty extreme saver.

Welcome, it sounds like you have the motivation to make it happen. There is a lot of very skilled people on here, with very wise advice. Ask more specific questions and you will get great answers to help you meet your goal.

Thank you, I would like to hear from some very early retiree's

As with most projects add 20%.

Alright.

 

[whipsaw]

Income? Expenses? Age?

 

[Golden sunsets]

ZFL; Welcome. I must be dense. Could you explain your chart. Do you mean year of retirement vs years until retirement? And what assumption are you making on your savings vs income?

 

[FIGuy]

This is "years of savings (of net income) at given rate to reach FI". What is missing is some assumption of ROI, but one finds it matters surprisingly less at very high savings rates. The math is the math, but the question is whether a person has the commitment to stick to it just like dieting calories in < calories out. The math is the math there too. Higher net savings means lower net spending so it captures everything on the budget end. A popular meme on FI blogs right now is "save 75% for 5 years", which has some expected ROI built in. Basically, years of expenses saved * real ROI > 100% is FI. Example: 25 years * 4% real ROI (6-8 nominal) = decent chance of being FI.

Regarding whether it was worth it, I'd say definitely. People say YOLO to justify pissing away all income, but in reality 5-7 years of high savings goes by quick and I'm so glad former me wasn't a selfish prick. Even if we decided to spend all employment income now, we still have a better chance at a fantastic traditional retirement than 95% of the country would saving at 15% for 40 years. I do consider us financially independent at this point, but both DW and I continue to work until we can figure out a more interesting option. I don't consider us "rich", but rather just secure as long as we stay smart and have OK luck with health and wealth. The excel sheets do show riches 30 years down the line, but who knows what the future will bring. We both enjoy our careers more now that it doesn't feel as much like we need the paychecks. It also allows me to "rock the boat" at work more. I'd rather get fired than live in fear of speaking the truth (with respect of course) at this point. Nice feeling!

 

[ZacharySmithR]

Income? Expenses? Age?

Income: Approx $3800/mo
Expenses: <$400/mo
Age: 19

ZFL; Welcome. I must be dense. Could you explain your chart. Do you mean year of retirement vs years until retirement? And what assumption are you making on your savings vs income?

Savings rate of income % = Years until retirement using 4% rule, assuming 5% ROI after inflation (forgot to include, sorry)

This is "years of savings (of net income) at given rate to reach FI". What is missing is some assumption of ROI, but one finds it matters surprisingly less at very high savings rates. The math is the math, but the question is whether a person has the commitment to stick to it just like dieting calories in < calories out. The math is the math there too. Higher net savings means lower net spending so it captures everything on the budget end. A popular meme on FI blogs right now is "save 75% for 5 years", which has some expected ROI built in. Basically, years of expenses saved * real ROI > 100% is FI. Example: 25 years * 4% real ROI (6-8 nominal) = decent chance of being FI.

Regarding whether it was worth it, I'd say definitely. People say YOLO to justify pissing away all income, but in reality 5-7 years of high savings goes by quick and I'm so glad former me wasn't a selfish prick. Even if we decided to spend all employment income now, we still have a better chance at a fantastic traditional retirement than 95% of the country would saving at 15% for 40 years. I do consider us financially independent at this point, but both DW and I continue to work until we can figure out a more interesting option. I don't consider us "rich", but rather just secure as long as we stay smart and have OK luck with health and wealth. The excel sheets do show riches 30 years down the line, but who knows what the future will bring. We both enjoy our careers more now that it doesn't feel as much like we need the paychecks. It also allows me to "rock the boat" at work more. I'd rather get fired than live in fear of speaking the truth (with respect of course) at this point. Nice feeling!

My apologies, the chart Assumes 5% ROI after inflation, of course numbers and outcomes are never going to be exact, but there is very little chance of a High deviation either way up or down, Yes calories in vs Calories out can compare to this, but savings rate is a lot more easier to track than a calorie, you could think a potato has 130 calories, but maybe you ate a rather large potato, above the 5oz serving size, and you did this everyday, with more than one item, you did not accurately track calories in/calories out and did not lose any weight.


Some people just can't handle the lifestyle, but If you truly want FI, this chart is a good Rule of Thumb to follow.

 

[chris2008]

Interesting projection.
Please explain a bit about your living conditions so that we can understand such little expenses

Expenses: <$400/mo

 

[ZacharySmithR]

Interesting projection.
Please explain a bit about your living conditions so that we can understand such little expenses

Military, no housing expenses, gym expenses, Car expenses(yet). Just Entertainment expenses really.

 

[gooddog]

I noticed you have a ROTH & apparently a traditional IRA, have you considered a 401? You can put some money away that way pretax. Are you concerned that you will not have access to it when you retire (from the military?). What branch of the military are you in, and is it your intention to retire from the military?

 

[heeyy_joe]

I am LOST IN SPACE.

 

[JoeWras]

Zac, congrats on your lofty goal. Keep it going!

Do keep in mind the expense part of the equation when you are 30 or so. Especially concerning is medical expenses. You are in the military now and are getting medical care along with possible housing. If you ER, you won't have that anymore, right? (I thought it takes 20 years to get a decent pension, no?)

Do you plan on marrying? Kids?

I'm not going to crush your dreams. We have people on this board in this 30s with kids who HAVE ER'd. Just keep your eyes open!

 

[Nords]

Could you explain your chart. Do you mean year of retirement vs years until retirement? And what assumption are you making on your savings vs income?

This is "years of savings (of net income) at given rate to reach FI". What is missing is some assumption of ROI, but one finds it matters surprisingly less at very high savings rates.

Here's a post about the math behind the chart, and a calculator for you to enter your own rates of return:
How many years does it take to become financially independent? (the math)
How many years does it take to reach financial independence? (Todd Tresidder's calculators from FinancialMentor.com)

 

[martyb]

Military, no housing expenses, gym expenses, Car expenses(yet). Just Entertainment expenses really.

Ah yes....I remember the good old days! Circa 1977-'79. Then I got married, and whoosh....good-bye carefree low-budget lifestyle, hello rent, car payments, groceries & utilities for two, vacations, extra trips to visit family....etc. Oh well....at least I have a couple of beautiful daughters to show for marriage number 1, which lasted a total of 7 years.

 

[ZacharySmithR]

I noticed you have a ROTH & apparently a traditional IRA, have you considered a 401? You can put some money away that way pretax. Are you concerned that you will not have access to it when you retire (from the military?). What branch of the military are you in, and is it your intention to retire from the military?

Roth & INDIVIDUAL INVESTMENT ACCOUNT, It's taxable

I do not need a 401k because of Early retirement, I would need my money before 59 1/2, the Roth being maxed out for 10 years is for an extra kick when I do reach that age, but the Individual is for actually retiring on. I am in the Marines, it is not my intention to retire from the military, that would take 20 years, but I plan to retire in 10, plan is Military - College (post 911 gi bill is very generous - work - Financial independence.

I am LOST IN SPACE.

How can I better explain?

Zac, congrats on your lofty goal. Keep it going!

Do keep in mind the expense part of the equation when you are 30 or so. Especially concerning is medical expenses. You are in the military now and are getting medical care along with possible housing. If you ER, you won't have that anymore, right? (I thought it takes 20 years to get a decent pension, no?)

Do you plan on marrying? Kids?

I'm not going to crush your dreams. We have people on this board in this 30s with kids who HAVE ER'd. Just keep your eyes open!

Yes of course I keep in mind expenses, as for housing, I plan on buying a Fourplex with a VA loan, living in one unit and renting the other 3 out, so housing expenses will me minimal. I am married, no kids though.

Ah yes....I remember the good old days! Circa 1977-'79. Then I got married, and whoosh....good-bye carefree low-budget lifestyle, hello rent, car payments, groceries & utilities for two, vacations, extra trips to visit family....etc. Oh well....at least I have a couple of beautiful daughters to show for marriage number 1, which lasted a total of 7 years.

Luckily, my wife has the same goals as me, We are gonna hold off on kids for a while.

 

[Gumby]

I am LOST IN SPACE.

How can I better explain?

Given your tender age, it's not surprising that this flew right by. Lost in Space was a 1960s TV show about the space family Robinson. The principal villain of the show was Dr. Zachary Smith.