Shockingly simple math behind early retirement
This is based on the Trinity Study and you can learn more about it on this awesome Mad Fientist post on Safe Withdrawal Rate. This is also interchangeable to the 4% rule of safe withdrawal rate which means you can withdraw 4% from your FI number annually and in most cases not run out of money throughout retirement. If your annual expenses is $40,000, just multiply that number by 25 and tada!!! Your FI number is $1,000,000. Of course, this number is different for everyone and the part of “retiring early” is up to you. Your FI number is the amount you will need to provide enough passive income to cover your day to day expenses.
#SHOCKINGLY SIMPLE MATH BEHIND EARLY RETIREMENT FULL#
We know that achieving it will not solve all of life’s problems or lead us to a life full of happiness, but we have come to realize that this journey, while at times challenging, is extremely WORTH IT!
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It’s definitely not an end goal for us, but it is a goal we’re working hard to achieve. I would, however, love for my husband to retire from his law enforcement career as soon as possible so that he can have more time for things he loves: photography, videography, and creating stuff!
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So, for me it’s really about having options to do what I want and not being stuck in something that doesn’t bring any value to my life. I’m not so sure if I’m going to retire early as I love my profession as a Registered Nurse, but having the option will be pretty damn nice! I’m also exploring other projects like this blog which I’m enjoying so much.
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I know that we will hit “ our FI number” in about five years and by that time I will be 39 years old. real estate, index funds, businesses).įor me, I’m focusing on the FI part. It means that you are financially capable of retiring early by generally having enough passive income from your investments (e.g. FIRE stands for Financial Independence Retire Early.