I guess critical mass for me was when it became clear that the incremental savings I was adding to the pile were largely besides the point.
+3 (I think)
sub-critical mass.
The point where your assets are large enough that you are better off spending more time managing your portfolio, than working the extra hours trying to get a bigger raise.
Sure you can add more money (reactivity), but even if you didn't the problem would "solve itself" (you'd reach FI/the reactor is self-sustaining).
Thus, most of us probably reach portfolio "critical mass" before we reach FI, and one is not necessarily linked to the other.
/nerd
True, but only if the portfolio has no stocks or (esp long-term) bonds. If the portfolio has assets with volatile prices, it can lose value even if it keeps throwing off enough income to keep the annual "take" stable/growing.To me, critical mass is when the income from my portfolio, in addition to my SS, is enough to cover all our expenses. This will leave the value of my portfolio from ever declining.
I never thought of critical mass as having an exact numerical definition, but referring generally to the point past which in an average year, portfolio growth was due far more to investment gains than to contributions. In other words, what brewer and a few others have said.
Most have expressed the same understanding of the concept of critical mass in this thread. The danger I see is that many people underestimate their true needs and wants. That is particularly true for people who ER 50 or younger. Their longer number of years in ER increase the chance of an unanticipated series of adverse financial events, marriage problems and all sorts of other cash eating problems that they have no reason to work into their projections. Not to sound overly pessimistic this same group may have huge excess in their portfolios if the markets, personal health and personal life go well.
Most have expressed the same understanding of the concept of critical mass in this thread. The danger I see is that many people underestimate their true needs and wants. That is particularly true for people who ER 50 or younger. Their longer number of years in ER increase the chance of an unanticipated series of adverse financial events, marriage problems and all sorts of other cash eating problems that they have no reason to work into their projections. Not to sound overly pessimistic this same group may have huge excess in their portfolios if the markets, personal health and personal life go well.