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Old 08-08-2013, 07:23 PM   #21
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Ok.therefore the FI function is defined as what we agree upon but annually, IMO. Not over a life time. If the function can be true and verified annually, whatever your age is, you are FI.
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How about changing "all interests from all investments" to "all distributions from all investments" to include dividends and other distributions.
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Old 08-08-2013, 07:34 PM   #22
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In it's simplest terms - FI means you have enough money (income streams, nest egg, whatever) to not need to work for income. How much of a buffer will be debated here forever... Some folks are fine with 90% success on firecalc... others want 200%. But as long as they are comfortable with the "I don't need a paycheck to pay my expenses" they are FI.
+1

The ability to wake up and pursue the day on my own terms, choosing if I work (and if I choose to work having the choice of the type of work), as well not not being a financial burden on anyone else, is how I see it.
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Old 08-08-2013, 07:46 PM   #23
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How about anyone with pension (+SS) > living expenses?
That is my formula for FI and retirement. If that formula ever quits working, then I most certainly will be!
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Old 08-08-2013, 07:50 PM   #24
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Quote:
Originally Posted by rodi View Post
In it's simplest terms - FI means you have enough money (income streams, nest egg, whatever) to not need to work for income. How much of a buffer will be debated here forever... Some folks are fine with 90% success on firecalc... others want 200%. But as long as they are comfortable with the "I don't need a paycheck to pay my expenses" they are FI.
Another +1

Of course, having "enough" begs the question of what it is that we have enough for? I'm happy to go with an indefinite continuation of our current materialistic standard of living. If we wanted "more" to keep up with the Jonses, then we wouldn't have "enough".
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Old 08-08-2013, 08:04 PM   #25
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Mine would be:

(living expenses - pensions - annuities - SS)/retirement savings < SWR

SWR would vary depending on age.

Or where Firecalc success rate > 98%
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Old 08-08-2013, 08:12 PM   #26
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"I don't know how to define it, but I know it when I see it." Seems to fit here, too, doesn't it?

Perhaps that is why the magazines are called financial porn.
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Old 08-08-2013, 08:52 PM   #27
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It's all relative NW. I reinvest all interest and dividends, and live only on my pension. However, the proof is in the details. If you had my portfolio to live on solely, you would throw your hands up in the air, give up and say you never ever will be able to retire.
One is certainly FI if he has some fixed income sources and does not need to rely on external savings. See my earlier post below.

I was only teasing scrabbler because he said he might not spend the extra money he was going to have.

I myself initially thought it would be nice to see my stash keeping on growing once I have SS as additional income, but now realize that the market may not cooperate, and then with all this talk about means testing SS, who can be sure anymore.

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...
PS. If a person has a substantial pension, his portfolio can be smaller as he only needs to supplement his pension. Of course, if the pension is large enough to live on (and is COLA'ed), then he can be FI with not much more than some emergency funds.

PPS. Oops! The above is true if his pension is not with Detroit!
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Old 08-09-2013, 12:04 AM   #28
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Having FIREd in 2010 at age 55, I hoped that I would be able to pay my bills for many, many years to come. I bought health, umbrella, and other insurance to protect (I hope) the financial nest egg I had gathered over the past 30-some years. I also factored in Social Security $, to kick in when I'm 70.

All-in-all, today I do feel financially independent. I wake up whenever, I do whatever I want during the day, and I go to sleep afterward.
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Old 08-09-2013, 12:19 AM   #29
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Similar what others have said, FI is when you have enough funding to live the life style as desired forever without any reliance on an income from working. In our case, FI is 2% SWR from portfolio.
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Old 08-09-2013, 12:20 AM   #30
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Suppose some catastrophic economic event happens, and my stash gets pummeled down to a fraction of its value, and this before I get to SS age. Would I still be FI?

Well, perhaps I can still do it. I would sell my homes, pack up in my little motor home and head for the forests in New Mexico. In that state, a non-resident camping permit is only a few hundred bucks a year. My living expenses will be much reduced, before I need to work. That is if I do not want to work, but chances are that I would want to. Or my wife will make me to.

See, one can achieve FI on many levels. It does not have to include foreign travels, stick homes, or new cars, etc... For more ideas, search the Web for "cheaprvliving".

PS. This site shows a typical budget of $1000/month. At $12K/year and a 4% WR, that still requires a $300K stash. My 2 homes are much more than that. I will always be FI.

Hmmm... Just look at their numbers again. See nothing for health insurance. I guess Obamacare comes just in time.
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Old 08-11-2013, 06:24 PM   #31
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I defined FI as function of assets/annual expenditures and your age.

59 and younger minimum 25X expense maximum 35X
59 and older minimum 20X expense maximum 30x.
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Old 08-11-2013, 06:41 PM   #32
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I'm interested in how others would define FI in quantifiable terms. I know it can be defined as having enough money to last for the rest of your life. But in more specific terms, I'd say it's having a portfolio worth 50 times your annual expenses. OK it may really be 25 or 40, but to be cautions, I'd tend to say more like 50. Many posters post here that they are FI, and I'm curious what definition you use.
Interesting question...

By numbers I am FI: spending need ~$40K + health ins, portfolio can support ~$100K + with 100% FIRE success, am I?!

I still w$rk. The question is why? I am trying to exercise so-called passive, 'critical mass' definition (by Bob Brinker) of FI. But always puzzled by moral/emotional aspect of the question. Not sure I answered any questions, feels like just added more of mine :-)

RE Bob Brinker Bob Brinker's Land of Critical Mass : bobbrinker.com Marketimer © Moneytalk Bob Brinker :

"Critical Mass:

A state of freedom from worry and anxiety about money due to the accumulation of assets which make it possible to live your life as you choose without working if you prefer not to work or just working because you enjoy your work but don't need the income. Plainly stated, the Land of Critical Mass is a place in which individuals enjoy their own personal financial nirvana. Differentiation between earned income and assets is a fundamental lesson to learn when thinking in terms of critical mass. Earned income does not produce critical mass......critical mass is strictly a function of assets."
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Old 08-11-2013, 11:49 PM   #33
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My definition of FI is when pensions, SS, and annuities are greater than annual living expenses AND your SWR of your investable assets can sustain your living expenses for a minimum of 40 years. If there is a short-fall on one side you are still FI if the other side can make up the difference. This way if the market crashes, hopefully the other side can carry the load and vice-versa. I guess having been an engineer I like to have a substantial safety factor. While this definition will not work for most, it does work for me.
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Old 08-12-2013, 12:04 AM   #34
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My definition of FI is when pensions, SS, and annuities are greater than annual living expenses AND your SWR of your investable assets can sustain your living expenses for a minimum of 40 years. If there is a short-fall on one side you are still FI if the other side can make up the difference. This way if the market crashes, hopefully the other side can carry the load and vice-versa. I guess having been an engineer I like to have a substantial safety factor. While this definition will not work for most, it does work for me.
So if someone was 80 and had SS and pensions that covered 80% of their expenses and their investible assets would sustain living expenses for only 30 years then that person isn't FI?
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