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Old 08-05-2022, 05:09 AM   #21
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If I recall correctly, "FI/RE" simply means "Financially Independent / Early Retire." Overall, I'd say the article is decent enough, but where they screw up is throwing out the sentence "They do this by saving at least 50% and as much as 75% of each paycheck", as if it's some sort of absolute, that must not be deviated from.

I think I only put away that much of my paycheck for a few years, back in the early/mid 2000s. My success has come from a variety of sources...saving/investing (even if not a consistent 50-75%), compounding/reinvesting dividends and capital gains (this was a big part), rent from having house mates, and inheritance. Although, maybe I don't count, since I'm not "FI/RE'ed" yet. I'd say, at 52, I'm definitely at the "FI" part. And if I back test my data, I have a feeling I pretty much hit "FI" around the age of 48. But, I just can't make the jump to "RE"...at this point the job is easy money, and I keep having "One More Year" syndrome issues. Guess I'd better do something soon, or I'm just gonna be "FI/R"
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Old 08-05-2022, 05:48 AM   #22
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Originally Posted by Andre1969 View Post
I'm definitely at the "FI" part. And if I back test my data, I have a feeling I pretty much hit "FI" around the age of 48. But, I just can't make the jump to "RE"...at this point the job is easy money, and I keep having "One More Year" syndrome issues. Guess I'd better do something soon, or I'm just gonna be "FI/R"
^I feel the same way Andre. DW and I have 2 military pensions so basically FI as soon as we hit our 20. 39 years for her and 45 years old for me. We are trying to get our heads around the RE or R part of the equation. She loves her post military gig and has been doing it for 10 years now. She will get a second pension from that government job eventually. I go from contract to contract since my military time was up. All jobs I like in a field I generally like. Working on/with stuff that flies and/or blows up is always fascinating. We still do all the stuff we would do if fully retired. In the past 12 months we have been to Roatan, St Croix (x2), San Diego (x2), Vermont, PA, Outer Banks(NC) and VA Beach. After her case is decided today (jury duty) we are heading to the lawn mower races. Yes, it's a thing here in Southern MD. If fully retired I can't seeing doing much more than that. My recruiter (USMC) lived off the 50% rule. Everytime he got a raise in the military he saved 50%. In 1991 as an E-6 he was still living off of E-4 pay. Lost track of him so don't know how it all turned out for him but he was one of the first to interduce me to money management. Thanks SSgt Barnes.
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Old 08-05-2022, 06:41 AM   #23
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Originally Posted by Andre1969 View Post
If I recall correctly, "FI/RE" simply means "Financially Independent / Early Retire." Overall, I'd say the article is decent enough, but where they screw up is throwing out the sentence "They do this by saving at least 50% and as much as 75% of each paycheck", as if it's some sort of absolute, that must not be deviated from.

I think I only put away that much of my paycheck for a few years, back in the early/mid 2000s. My success has come from a variety of sources...saving/investing (even if not a consistent 50-75%), compounding/reinvesting dividends and capital gains (this was a big part), rent from having house mates, and inheritance. Although, maybe I don't count, since I'm not "FI/RE'ed" yet. I'd say, at 52, I'm definitely at the "FI" part. And if I back test my data, I have a feeling I pretty much hit "FI" around the age of 48. But, I just can't make the jump to "RE"...at this point the job is easy money, and I keep having "One More Year" syndrome issues. Guess I'd better do something soon, or I'm just gonna be "FI/R"

Yup, this mirrors my situation almost perfectly. As of late I'm at about (1/3 taxes, 1/3 savings, 1/3 spending) My investments at this point could likely replace more than my current spending. I'm in OMY phase as well. I'm targeting 55 at this point, then I will re-assess.

Obviously I'm not in the extreme RE camp, tho I thought about it at that time and there are threads of mine on here discussing it, but even if I'm not an extreme RE, the fundamentals give one options earlier in life than normal, and I think this is the real value of the FIRE movement.
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Old 08-05-2022, 06:46 AM   #24
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Originally Posted by TheWizard View Post
Gross pay is the denominator, correct.

Including all employer contributions to your retirement plan.

Them's the rules...


Well, no, there are no rules. One can decide for oneself.

The article says “half one’s paycheck”, which implies take-home pay, which is different than gross income. If you’re trying to save half of gross pay, how do you count taxes: Spending or savings? What about SS and Medicare taxes? Those things benefit you later, so are forms of savings.

And what about mortgage payments? Part of those go to expenses, while principal payments go to savings and building equity, in my book.

There are debatable nuances involved.
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Old 08-05-2022, 08:14 AM   #25
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Originally Posted by NW-Bound View Post
+1



+1

Nowaways, people talk about FIRE as quitting work in the 40s, or even mid to late 30s. The young'uns will have to save hard and spend little in order to accomplish this. I am not such an ascetic, and did not retire till 55.
Folks without kids can do it by 40-45 at any income level IMO, especially with hard work - start saving 25% in your mid to early 20s should be enough to do so, especially if you start banking 50% of any promotions you get with higher income (someone right out of college at average pay at 22, then get a 12% pay raise every 3-4 years with 3% other years would save $2-$2.5m by 45 with this approach - double that for DINKs together). 30s is harder but 2+ decade of compounding does a lot in most 20+ year periods.
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Old 08-05-2022, 11:39 AM   #26
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Originally Posted by deserat View Post
This is an excellent point with regard to two incomes. I noticed when I was married we were able to essentially save one income. That accelerated savings quite a bit. I am now divorced and working again. It would be difficult to save 50% of my income being single, however, I calculated and do save about 26%.
We live in a HCOL area with some competitive, type A neighbors and coworkers. A surprising number, whom we didn't know all that well, seemed to be visibly upset when they heard we retired early. This has prompted me to think about why were we so different than the retire late (and not by choice) households? The reasons I came up with were LBYMs; blue collar backgrounds and spending habits; two professional incomes; good ROI schools (in state, public, community college courses, internships, etc.) and tech degrees for us and one of the kids, which only require 4 years of college; and so, far at least, we haven't gotten divorced.

Most of those factors didn't require any undo hardship or extreme sacrifice but they all really added up.
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Old 08-05-2022, 12:26 PM   #27
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Originally Posted by Markola View Post
Well, no, there are no rules. One can decide for oneself.

The article says “half one’s paycheck”, which implies take-home pay, which is different than gross income. If you’re trying to save half of gross pay, how do you count taxes: Spending or savings? What about SS and Medicare taxes? Those things benefit you later, so are forms of savings.

And what about mortgage payments? Part of those go to expenses, while principal payments go to savings and building equity, in my book.

There are debatable nuances involved.

Right, I've always done it by take home pay with the addition of my and my employer's contributions to my retirement plan as money saved and earned. I know that was the MMM way also. Doing it based on gross income doesn't make any sense to me since so much of that is taxes. Using the MMM method, I've topped 80% savings in multiple recent years, despite being single, but with inflation soaring and a cut I made to my retirement plan contribution at work, I'm sure I'll be below that this year. I've never changed my standard of living since moving into my current home 20 years ago, because I always saved a lot, even before I ever heard about the "FIRE" movement. I didn't retire very early, but I'm still looking at 50's despite no pension.
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Old 08-05-2022, 05:38 PM   #28
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Originally Posted by Bigdawg View Post
^I feel the same way Andre. DW and I have 2 military pensions so basically FI as soon as we hit our 20. 39 years for her and 45 years old for me. We are trying to get our heads around the RE or R part of the equation. She loves her post military gig and has been doing it for 10 years now. She will get a second pension from that government job eventually. I go from contract to contract since my military time was up. All jobs I like in a field I generally like. Working on/with stuff that flies and/or blows up is always fascinating. We still do all the stuff we would do if fully retired. In the past 12 months we have been to Roatan, St Croix (x2), San Diego (x2), Vermont, PA, Outer Banks(NC) and VA Beach. After her case is decided today (jury duty) we are heading to the lawn mower races. Yes, it's a thing here in Southern MD. If fully retired I can't seeing doing much more than that. My recruiter (USMC) lived off the 50% rule. Everytime he got a raise in the military he saved 50%. In 1991 as an E-6 he was still living off of E-4 pay. Lost track of him so don't know how it all turned out for him but he was one of the first to interduce me to money management. Thanks SSgt Barnes.
Oldest (O-2) will only get 2%/year under the new system but saves 30%+ in Roth to get the 5% match in traditional in their TSP.
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