Author Topic: Hitting FI Goal - Could use some advice - Am I REALLY FI??  (Read 8169 times)

justostash

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Hitting FI Goal - Could use some advice - Am I REALLY FI??
« on: January 26, 2018, 10:43:05 PM »
Recently my FI goal has been reached a bit faster than I imagined due to the market run. I find myself wondering, should I continue to slave away at the job I don't much care for to add a buffer for the inevitable downturn? Or can I consider myself FI no matter the circumstances? What are the FI rules :) ?

Fishingmn

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #1 on: January 27, 2018, 06:12:13 AM »
To me it would depend on a number of questions -

  • How old are you and what are you using to determine you are FI (4% rules?)
  • If the market does go down do you have flexibility to cut expenses? Would you go back to work in some capacity?
  • Do you dislike the work you are doing now? Are there other options for making money you want to pursue during transition? (Consulting, PT job, different career, side hustle)

In my opinion there's nothing wrong with either working a little longer (if you don't hate it) or considering alternatives if it means a better chance of RE success and/or the ability to even spend a little more than you planned.

Retire-Canada

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #2 on: January 27, 2018, 08:47:35 AM »
Recently my FI goal has been reached a bit faster than I imagined due to the market run. I find myself wondering, should I continue to slave away at the job I don't much care for to add a buffer for the inevitable downturn? Or can I consider myself FI no matter the circumstances? What are the FI rules :) ?

You are not FI if you can't withstand a market downturn. Crashes are normal so your FI plan has to be robust enough to weather the kinds of crashes we've seen historically.

You are not FI if you don't have faith in your financial situation for whatever reason. Perhaps you picked a very tight budget figure to plan FI from and you are not confident it's an amount of money per year you can live on longterm. If that's the case go back and address whatever element of your FI plan is bothering you and see what the new version looks like relative to the amount of money you have invested.

Let's assume you've sorted out your FI plan so you are confident in the fact your longterm financial needs are covered then I would no longer work at a job you don't care for. It's a waste of your most precious resource...time. Quit your job. Give yourself a reasonable amount of time [say 1 year] to decompress and recover from the mental and physical damage you did to yourself amassing your stash. Then see how you feel and what you want to do with the rest of your life.

jamesplease

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #3 on: January 27, 2018, 09:31:56 AM »
justostash, there is no set rules that determine with certainty if you are ever FI or not. Any ďruleĒ that comes from historical analysis, such as the 4% rule, is based on statistical methods that aim to reduce the likelihood of the portfolio running out during your lifetime. When looking at historical data, even portfolios with a 4% withdrawal rate fail (even though it happens a small fraction of all of the simulated runs).

Further, there is the chance that the marketís past performance will not accurately reflect the future. For instance, the market could continue to climb and climb, and a 4% withdrawal rate could be overly pessimistic. Or it could crash for longer than it ever has crashed before, making the 4% rate too optimistic. We canít know this until it happens.

Anyway, the way I think about this is that it is about building the confidence that you are FI.

Iíve been studying the historical success method recently, and I think there are some things that could help you determine if you feel confident enough to call yourself FI.

1. long retirements are less likely to succeed than early ones. So someone who is 30 is more at risk for ďfailedĒ portfolios than someone who is 50, given the same start year, portfolio, withdrawal strategy, etc. Looking at ďextremeĒ situations makes this very clear: given $1,000,000, you could probably withdraw 50% of the portfolio and not run out of money if you only plan to FIRE for 2 years. This same idea (just less exaggerated) applies to longer retirements as well.

2. retirements that begin right before big stock market crashes are the ones least likely to succeed. So if you think the market is due for a correction, then maybe this is worth factoring in.

3. folks who can adjust their spending when there is a market downturn (i.e.; going for 3% or 3.5% inflation-adjusted withdrawal rates, rather than 4%) are more likely to have a stash that lasts as long as they do. How well do you think you would do living on 3% of your portfolio for a few years? Would that be too difficult for you to do, or do you think you could pull it off?

With all of this said, I donít want to scare you into thinking that 4% is risky, or anything like that. The presence of risk doesnít make something risky (a lot of risk is what makes something risky). The 4% withdrawal rate is a conservative estimate, and has a high rate of success independent from the above factors.

These are just some things to consider that may help you adjust your confidence level.

One more thing: there are ďsmarterĒ withdrawal strategies than the 4% rule. Right now, I prefer a slightly modified version of the Hebeler autopilot method. My modification is to put a cap on withdrawal rates during good years. Going from a 4% withdrawal rate to something like a 10% withdrawal rate, and then back down to 4% sounds like it would be very annoying to adjust to. Iíd rather my spend rate be a little more consistent.
« Last Edit: January 27, 2018, 09:33:57 AM by jamesplease »

justostash

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #4 on: January 27, 2018, 12:42:36 PM »
I'm always pleased by the well informed and detailed responses here.  Thank you all, I really appreciate it.

I do understand that there is no steadfast RULE to FI for everyone, only the rules we decide for ourselves. However, I've been using the cfiresim (http://www.cfiresim.com/) to work out my spending plan. I like the data modeling approach. With my current savings I'm set with a near 100% chance of historical success (cfiresim) to age 90 as long as my withdraw rate starts at about 22K/yr and adjusts with inflation. I understand for a lot of people that is very lean, but I have lived lean all my life (40 now), and am used to spending about 20K/yr on everything I need/want in life. BTW, I'm running the cfiresim leaving out social security income, inheritance, or any other income in the future which I am likely to have (I just didn't want to count on it).

You all make a good point about having flexibility to adjust your withdraw rate when the investments get a little rocky. Perhaps getting all my expenses below 20K/yr could be difficult if I ever need to do that for a few years let's say. Maybe that's what my fear is.

So, 2 withdraw rate issues really:
- Unknown future life events that could affect what I would like to withdraw: health, marriage, children?? All unknowns to me right now.
- Starting FIRE at the 'top' of the market: Something I could never know until the future.

It does sound like the solution is to either continue working a while or quit the current job I don't like and be at ease knowing I can always pick up some work in the future if needed.

In recent years I've noticed that I have been passing up on enjoyable opportunities that cost money in a rush to reach FI... This is kind of the 'dark side' of moustacheism for me: the laser focus on this FI goal... obviously my choice.

LessIsLess

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #5 on: March 08, 2018, 07:48:16 AM »
You can try FIRE to see if you like it.  You're young enough that you can recover from the experience.  Learning by doing.

Linda_Norway

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #6 on: March 08, 2018, 08:30:55 AM »
This thread started in January. Was the just before the current dip in the market?

If you are uncertain of your FIRE, why then not quite your fulltime job and do something else part time. Would you be able to make your current spending money by working part time in a low stress job? Or as a consultant, only working as much as you like. This way you can semi-FIRE and still not start digging into your stash.

bluebelle

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #7 on: March 08, 2018, 09:01:13 AM »
Your FIRE number is very lean, but we all lead different lives.  I have 3 numbers for FIRE, (1) bare bones, I won't starve and can keep the lights on (2) keep living the life I have now (3) take a big trip once a year.   

I know that if the markets 'correct', living a year or two somewhere between option 1 and 2 isn't hard.

It sounds like you're already living a bare bones life based on your comment about missing out on things in your rush to hit FI

But I've worked soul crushing jobs that suck the life out of you.

In your position, perhaps you can find a part time gig for 10-15K (2% WR) a year that would allow your stache to grow a little more.

My concern is that you've said that your FIRE number is very lean at 22K and that you're currently missing out on enjoyable things to get to FIRE.  Do you really want to stay that lean for the next 50 years?

Financial Ascensionist

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #8 on: March 11, 2018, 11:52:39 AM »
I used to look at the six-month rolling average for my savings-rate to know if I was truly FI.  Once the six-month average hit 100%, I was very confident that I was ready to go.  As others have mentioned, being able to scale your expenses down if things would go bad is another good way to give you peace of mind.  If you have a backup plan and that your numbers look reasonably solid, I would not hesitate to pull the trigger.  Life in FIRE is amazing!

justostash

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #9 on: March 11, 2018, 11:56:51 AM »
Thanks all for adding some new advice to the thread.  I'll update:

Indeed, I made the original post just a day or 2 before the volatility started. Thanks to the MMM and all the nice forum folks, I didn't freak out (too much :).  My stash now just about back to where it was.

I'm still working away in the same job, I've decided to keep going until the early summer, and then I'll likely wind the job down.

MMM's most recent blog post regarding confidence is especially prescient for my situation. It's more about the confidence rather than the money at this point. Like Linda_Norway and bluebelle say, just find a part time gig.

evanc

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #10 on: March 12, 2018, 02:37:26 PM »
Recently my FI goal has been reached a bit faster than I imagined due to the market run. I find myself wondering, should I continue to slave away at the job I don't much care for to add a buffer for the inevitable downturn? Or can I consider myself FI no matter the circumstances? What are the FI rules :) ?

You are not FI if you can't withstand a market downturn. Crashes are normal so your FI plan has to be robust enough to weather the kinds of crashes we've seen historically.

You are not FI if you don't have faith in your financial situation for whatever reason. Perhaps you picked a very tight budget figure to plan FI from and you are not confident it's an amount of money per year you can live on longterm. If that's the case go back and address whatever element of your FI plan is bothering you and see what the new version looks like relative to the amount of money you have invested.

Let's assume you've sorted out your FI plan so you are confident in the fact your longterm financial needs are covered then I would no longer work at a job you don't care for. It's a waste of your most precious resource...time. Quit your job. Give yourself a reasonable amount of time [say 1 year] to decompress and recover from the mental and physical damage you did to yourself amassing your stash. Then see how you feel and what you want to do with the rest of your life.

To elaborate on Canada's comment, you can expect (historically speaking) for a market downturn to last up to 3 years. If you can adjust expenses or earn addl income accordingly, them what are you waiting for?! :)

RetireAbroadAt35

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #11 on: April 09, 2018, 12:50:33 AM »
I too had the sense that retiring at the end of a long market runup might give one a false sense of security around their finances if retiring today and applying the 4% rule to their draw-down strategy.

I read this: https://earlyretirementnow.com/2016/12/07/the-ultimate-guide-to-safe-withdrawal-rates-part-1-intro/

In my case I decided that if I were going to begin drawing down today, I would do so at 3.5%.  I would intentionally spend below what 4% would predict while times were good.  In my case this also prompted me to work a bit longer and save enough that 3.5% would generate my anticipated spending.  I've reached that point, so I really have no excuse not to retire now I suppose.

I think you sound pretty damn FI.  But if you were going to RE today, you might want to lower your withdrawals as we slip into trade war and deal with other looming economic shocks.  If that spending level makes you nervous, you might want to do what I did and save a little bit more.

dude

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #12 on: April 09, 2018, 08:44:59 AM »
It might help to know that, even in the worst most recent time to retire (Jan. 2000), a 60/40 portfolio (Vanguard Balanced Fund) would still have 92% of its starting value today, even after 18 years of 4% inflation-adjusted withdrawals. John Greaney updated his "Real Life Retiree Returns" a month early this year:

http://www.retireearlyhomepage.com/reallife18.html

(scroll to bottom of the page)

Though it's worth noting that the 75/25 portfolio did not fare nearly as well, with only 60% of its starting value remaining. I suspect a 100% S&P 500 portfolio would have fared even worse.

NWOutlier

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #13 on: April 09, 2018, 11:38:33 AM »
The rules are up to you; it's the options you have that are important, be flexible.

If you want to leave the job and your numbers make sense, you can - but be flexible enough to go back to work. 

Another option, go part time at something else - decrease the draw down on your account, use your accounts only to supplement

You can work another year or so if you want, I do like the thought of extra money working for me.....

The cool part?  it's all up to you!  I guess that's why they call it "personal" finance.   :^D



MonkeyJenga

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #14 on: April 09, 2018, 06:25:13 PM »
Your FIRE number is very lean, but we all lead different lives.  I have 3 numbers for FIRE, (1) bare bones, I won't starve and can keep the lights on (2) keep living the life I have now (3) take a big trip once a year.   

I know that if the markets 'correct', living a year or two somewhere between option 1 and 2 isn't hard.

It sounds like you're already living a bare bones life based on your comment about missing out on things in your rush to hit FI


22k a year for one person really isn't very lean for many Americans, let alone compared to the rest of the world. The median household income in 2016 was 59k, so many people live on around that much or less by necessity. My bare minimum FIRE is 12k, last year was 15k plus charity in a HCOLA. That 15k includes housing, multiple trips, healthcare, and a ton of fun activities and new friends. 22k can go far, unless you're dealing with a lot of unavoidable healthcare costs.

I agree that if justostash feels like they're missing out, they should change something. That doesn't need to mean spending more! It could be finding cheap/free alternatives to the activities you used to do. Invite your friends over for dinner instead of going out to eat, usher in exchange for free shows and concerts, take off-peak vacations, things like that.

People forget that the 4% is already conservative. Unless we have a huge, sustained depression greater than anything our country has seen before, you will likely end up with much more money than you need. And as other people have mentioned, a small part-time gig can cover your spending if you need it for a few years.

DreamFIRE

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #15 on: April 10, 2018, 06:30:48 PM »
22k a year for one person really isn't very lean for many Americans, let alone compared to the rest of the world. The median household income in 2016 was 59k, so many people live on around that much or less by necessity. My bare minimum FIRE is 12k, last year was 15k plus charity in a HCOLA. That 15k includes housing, multiple trips, healthcare, and a ton of fun activities and new friends. 22k can go far, unless you're dealing with a lot of unavoidable healthcare costs.

Yeah, my bare bones is $15K/yr, and that includes long term home maintenance averaged out monthly.  This year, I might have to take a little more from the pot for home maintenance, so my actual spending could be $2K or more above my barebones.  Unfortunately, I'll lose my very low cost low deductible healthcare insurance (and dental/vision) when I FIRE, so I'm estimating barebones to increase to $19K/yr unless I relocate and/or live with someone else.

Quote
People forget that the 4% is already conservative. Unless we have a huge, sustained depression greater than anything our country has seen before, you will likely end up with much more money than you need.

There are some high profile people in the RE community that are suggesting using a 2.9% or lower SWR due to current high valuations.  Here's one recent thread where this came up:
https://forum.mrmoneymustache.com/investor-alley/cape-and-safe-withdrawal-rates/

The admin over at ERE made a comment at the beginning of March about not being comfortable using anything more than a 1.5% SWR if he were to retire at that time.
https://forum.earlyretirementextreme.com/viewtopic.php?f=3&t=9725#p162418
« Last Edit: April 10, 2018, 06:35:07 PM by DreamFIRE »

Monkey Uncle

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #16 on: April 11, 2018, 04:50:17 AM »

There are some high profile people in the RE community that are suggesting using a 2.9% or lower SWR due to current high valuations.  Here's one recent thread where this came up:
https://forum.mrmoneymustache.com/investor-alley/cape-and-safe-withdrawal-rates/

The admin over at ERE made a comment at the beginning of March about not being comfortable using anything more than a 1.5% SWR if he were to retire at that time.
https://forum.earlyretirementextreme.com/viewtopic.php?f=3&t=9725#p162418

For the OP's 50 year time frame, cFiresim gives a 100% historical success rate for a withdrawal rate that is a shade under 3.2% for a 75/25 asset allocation.  So I would classify 2.9% as a bit too conservative, and 1.5% as fucking insane.

tooqk4u22

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #17 on: April 11, 2018, 10:32:47 AM »

There are some high profile people in the RE community that are suggesting using a 2.9% or lower SWR due to current high valuations.  Here's one recent thread where this came up:
https://forum.mrmoneymustache.com/investor-alley/cape-and-safe-withdrawal-rates/

The admin over at ERE made a comment at the beginning of March about not being comfortable using anything more than a 1.5% SWR if he were to retire at that time.
https://forum.earlyretirementextreme.com/viewtopic.php?f=3&t=9725#p162418

For the OP's 50 year time frame, cFiresim gives a 100% historical success rate for a withdrawal rate that is a shade under 3.2% for a 75/25 asset allocation.  So I would classify 2.9% as a bit too conservative, and 1.5% as fucking insane.

I am not sure I would say 2.9% is TOO conservative as it depends on the person, values are high, rates are low, and there is the whole past is not the future disclaimer but I would think it is pretty darn safe and therefore on the conservative side.   But I am biased as I am in the 3% WR camp. 

But I agree with you on the 1.5%.....the S&P500 Dividend yield is 1.83% which means that if you were 100% stocks you could still afford about a 20% cut in dividends and still not touch principal.  Its even more cushion if you have some bonds as total bond fund is yielding about 3%.  That's just crazy.  Not to mention if your spend was $40k that means $1mil at 4% SWR to $2.67mil at 1.5% SWR....yup, sounds fucking insane to me too. 



MonkeyJenga

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #18 on: April 11, 2018, 12:44:00 PM »
Quote
People forget that the 4% is already conservative. Unless we have a huge, sustained depression greater than anything our country has seen before, you will likely end up with much more money than you need.

There are some high profile people in the RE community that are suggesting using a 2.9% or lower SWR due to current high valuations.  Here's one recent thread where this came up:
https://forum.mrmoneymustache.com/investor-alley/cape-and-safe-withdrawal-rates/

The admin over at ERE made a comment at the beginning of March about not being comfortable using anything more than a 1.5% SWR if he were to retire at that time.
https://forum.earlyretirementextreme.com/viewtopic.php?f=3&t=9725#p162418

1.5% is insane to me. That almost triples the stash needed to retire, which for many people means never retiring, let alone retiring early. It is much easier to be flexible on the spending side than it is to work a decade or three extra. Worst case scenario if your portfolio falls dangerously low and you refuse to cut spending? You get a job. Why make certain your worst case scenario out of fear of maybe going back to work in the future?

I read Jacob's book. I like his systems thinking and commitment to low spending. I do not look to him for investing expertise.

RetireAbroadAt35

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #19 on: April 11, 2018, 03:12:16 PM »
After running simulations in cfiresim left me with doubts about 4% on a hot market, I started exploring the difference between 4% as a planning rule and 4% as a withdrawal strategy.

https://earlyretirementnow.com/2016/12/07/the-ultimate-guide-to-safe-withdrawal-rates-part-1-intro/

That analysis, along with cfiresim, helped me land on 3.5% for myself.  Under 3.2% seems unjustifiable for most FIREes.

DreamFIRE

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #20 on: April 11, 2018, 05:32:13 PM »
Quote
People forget that the 4% is already conservative. Unless we have a huge, sustained depression greater than anything our country has seen before, you will likely end up with much more money than you need.

There are some high profile people in the RE community that are suggesting using a 2.9% or lower SWR due to current high valuations.  Here's one recent thread where this came up:
https://forum.mrmoneymustache.com/investor-alley/cape-and-safe-withdrawal-rates/

The admin over at ERE made a comment at the beginning of March about not being comfortable using anything more than a 1.5% SWR if he were to retire at that time.
https://forum.earlyretirementextreme.com/viewtopic.php?f=3&t=9725#p162418

1.5% is insane to me. That almost triples the stash needed to retire, which for many people means never retiring, let alone retiring early. It is much easier to be flexible on the spending side than it is to work a decade or three extra. Worst case scenario if your portfolio falls dangerously low and you refuse to cut spending? You get a job. Why make certain your worst case scenario out of fear of maybe going back to work in the future?

Just to be clear, I'm not advocating the 1.5% rule, but those were just some examples of high profile people in the community that were suggesting lower SWR's based on the data and aren't simply "forgetting" about the 4% rule being conservative.  Of course, if someone has to cut their spending to less than 4% or go back to work because they can't afford to spend 4% from the stash, then the 4% rule hasn't really succeeded.  In it's purest sense, you should be able to live off the stash and 4% rule alone.  Of course, real life is likely a different story since most people aren't likely to spend exactly 4% with inflation adjustment every year, may bring in extra money, get SS, have a pension, get an inheritance, spend more/less from one year to the next, etc.  Heck, for me personally, if my stash lasts 15 years, that would get me to SS, which the calculator shows a benefit that is significantly higher than my bare bones, but I still expect to have stash.  But my point is that the shorter retirement window to SS gives me even more comfort in heading into FIRE using the 4% rule.  And like you, I have a pretty low barebones that allows me a lot of flexibility for cutting back vs. what the 4% rule will provide.  I could get by on less than 2%.  As for going back to work part time or side gigs, I should never have a financial need for that, but I suppose there could be some other internal drive for that in the future.

Quote
I read Jacob's book. I like his systems thinking and commitment to low spending. I do not look to him for investing expertise.

I have to admit, I don't know anything about his investing or book - I've simply read some in the forum but not as much as here.
« Last Edit: April 11, 2018, 05:42:40 PM by DreamFIRE »

BTDretire

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #21 on: April 13, 2018, 07:28:06 AM »
 I just want to add my two cents.

I think it's nuts to want to retire on $22k and less.

Are you truly doing that now?
Have you replaced a roof?
Have you bought a used car?
Have you had a transmission repaired?
Did all this come out of your $22k?
 How about a hospital trip?
 Property tax, car insurance, Utilities, Health Ins, Cellphone, Electric,
House Ins, Cable, Food, etc.
 Just my fixed bills are about $30k.

 Just to make my position clear, retiring on $22k is nuts.

However, to each their own.






jim555

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #22 on: April 13, 2018, 08:11:58 AM »
22k would leave me with 6k for whatever spending.  If you have no mortgage then 22k could be enough.

MonkeyJenga

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #23 on: April 13, 2018, 09:08:37 AM »
I just want to add my two cents.

I think it's nuts to want to retire on $22k and less.

Are you truly doing that now?
Have you replaced a roof?
Have you bought a used car?
Have you had a transmission repaired?
Did all this come out of your $22k?
 How about a hospital trip?
 Property tax, car insurance, Utilities, Health Ins, Cellphone, Electric,
House Ins, Cable, Food, etc.
 Just my fixed bills are about $30k.

 Just to make my position clear, retiring on $22k is nuts.

However, to each their own.

In regards to the bolded, I suggest writing up a case study. Other forum members can give you advice on how to live more efficiently. If you need motivation, you can check out the Mr Money Mustache blog or the book Your Money or Your Life.

There are people on this forum who post budgets under 22k. Over at ERE, there are even more people spending much less than that. That seems reasonable to me, since we're on websites dedicated to simple living and financial badassity.

Most of your questions are about home and car ownership. I don't own either and don't want to. Rent is cheap. Public transit is cheap and better for the environment. Health insurance costs are budgeted for. I don't have cable. My cellphone is cheap, my food is inexpensive, and my wants are few. Roommates cut the costs of utilities and Internet.

My emergency OH CRAP budget is under $10k a year, but I am splurging by staying in the US and paying for a home. Not right now, since I've been couchsurfing for months, but I know I'll start paying rent again soon. My rent was so low anyway that the cost of travel and eating on the road is almost as high.

I have an advantage in being reasonably young, reasonably healthy, and totally unattached. No house, no car, no pets, no spouse, no job tying me to one place.

Much Fishing to Do

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #24 on: April 13, 2018, 11:23:58 AM »
I just want to add my two cents.

I think it's nuts to want to retire on $22k and less.

Are you truly doing that now?
Have you replaced a roof?
Have you bought a used car?
Have you had a transmission repaired?
Did all this come out of your $22k?
 How about a hospital trip?
 Property tax, car insurance, Utilities, Health Ins, Cellphone, Electric,
House Ins, Cable, Food, etc.
 Just my fixed bills are about $30k.

 Just to make my position clear, retiring on $22k is nuts.

However, to each their own.

I think this actually has good points to bring up and challenge a 22 year old with this plan and not enough history to have tested it.... but given the OP is 40 he seems to have the skills to pull it off just fine.

Yabous

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #25 on: April 13, 2018, 05:50:24 PM »
Cake or death? He likes Eddie Izzard. In my experience this is enough to guarantee eternal life satisfaction. ;)

MonkeyJenga

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #26 on: April 13, 2018, 11:41:29 PM »
Cake or death? He likes Eddie Izzard. In my experience this is enough to guarantee eternal life satisfaction. ;)

Hah! From your lips to God's ears. I'm a she, but I assume I can still get the eternal life satisfaction.

MrThatsDifferent

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #27 on: April 14, 2018, 03:50:51 PM »
I just want to add my two cents.

I think it's nuts to want to retire on $22k and less.

Are you truly doing that now?
Have you replaced a roof?
Have you bought a used car?
Have you had a transmission repaired?
Did all this come out of your $22k?
 How about a hospital trip?
 Property tax, car insurance, Utilities, Health Ins, Cellphone, Electric,
House Ins, Cable, Food, etc.
 Just my fixed bills are about $30k.

 Just to make my position clear, retiring on $22k is nuts.

However, to each their own.

How can this be nuts when itís slightly less than MMMís budget for his family of 3 (ignoring the business expenses) and OP is alone? As long as you can manage housing and healthcare, it seems reasonable to me. And worst case, as has been mentioned, find a PT job that gives you $20k and youíre rolling in it.

jlcnuke

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #28 on: April 19, 2018, 02:55:14 PM »
I just want to add my two cents.

I think it's nuts to want to retire on $22k and less.

Are you truly doing that now?
Have you replaced a roof?
Have you bought a used car?
Have you had a transmission repaired?
Did all this come out of your $22k?
 How about a hospital trip?
 Property tax, car insurance, Utilities, Health Ins, Cellphone, Electric,
House Ins, Cable, Food, etc.
 Just my fixed bills are about $30k.

 Just to make my position clear, retiring on $22k is nuts.

However, to each their own.

How can this be nuts when itís slightly less than MMMís budget for his family of 3 (ignoring the business expenses) and OP is alone? As long as you can manage housing and healthcare, it seems reasonable to me. And worst case, as has been mentioned, find a PT job that gives you $20k and youíre rolling in it.

Just for an alternate point, if ACA subsidies go away and a person comes down with a chronic health condition and $22k/year could easily just cover their medical expenses..

Personally, I wouldn't be comfortable with a 4% SWR in early retirement for a "barebones" budget, as the "trimming" has already largely happened. That means, to me, that any bad sequence of returns in the early part of retirement would necessitate going back to work since you wouldn't have anywhere to really cut spending significantly and, not being able to predict the future, it wouldn't be a great idea to just blindly "follow the course"; thus turning that "retirement" into a failed attempt at retirement. If on a budget where a significant portion of the spending (30%+ for an arbitrary number) was discretionary costs, then I'd be a lot more comfortable considering a 4% SWR since spending could be significantly reduced in such a situation.

Prairie Stash

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #29 on: May 04, 2018, 12:18:03 PM »

How can this be nuts when itís slightly less than MMMís budget for his family of 3 (ignoring the business expenses) and OP is alone? As long as you can manage housing and healthcare, it seems reasonable to me. And worst case, as has been mentioned, find a PT job that gives you $20k and youíre rolling in it.

Just for an alternate point, if ACA subsidies go away and a person comes down with a chronic health condition and $22k/year could easily just cover their medical expenses..

Personally, I wouldn't be comfortable with a 4% SWR in early retirement for a "barebones" budget, as the "trimming" has already largely happened. That means, to me, that any bad sequence of returns in the early part of retirement would necessitate going back to work since you wouldn't have anywhere to really cut spending significantly and, not being able to predict the future, it wouldn't be a great idea to just blindly "follow the course"; thus turning that "retirement" into a failed attempt at retirement. If on a budget where a significant portion of the spending (30%+ for an arbitrary number) was discretionary costs, then I'd be a lot more comfortable considering a 4% SWR since spending could be significantly reduced in such a situation.
[/quote]
Because its not that hard to earn a small amount of money. If you were unemployed and had to earn $5000 over an entire year, could you do it?

I would do the following
Plasma - $1000 (50 hours total)
Babysit/daycare during school breaks - $50/day/kid in my area for 20 days - $1000
Lawncare/snow removal for neighbours - $600 (I was offered a $50/month job last year)
Actual seasonal job - $1000/month part time - $3000 (desperate times require working again)
Paper route? they still exist in my area and I hear its great exercise. The newspaper say potential earnings are $500/month.

$5000 earned can turn a 4% into a 3% SWR when you spend so very little. Its hard to earn enough to make $20k, but its fairly easy to make $5000. A lot of jobs exist that are very temporary and sporadic, most people with FT work can't do them, since they have real jobs.

I grew up doing random gigs on the side. Most can only make a few hundred dollars, not nearly enough to live off. But in FIRE you don't need to live off gigs, just supplement your main income if things go bad.

SugarMountain

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #30 on: May 09, 2018, 12:21:05 PM »
After running simulations in cfiresim left me with doubts about 4% on a hot market, I started exploring the difference between 4% as a planning rule and 4% as a withdrawal strategy.

https://earlyretirementnow.com/2016/12/07/the-ultimate-guide-to-safe-withdrawal-rates-part-1-intro/

That analysis, along with cfiresim, helped me land on 3.5% for myself.  Under 3.2% seems unjustifiable for most FIREes.

Started reading your guide.  It looks excellent.  One thing I've been thinking about  wrt CAPE Shiller is how much impact recent accounting changes have.  The E in CAPE is GAAP Earnings, which has changed a bit in the last 20 years.  There are some interesting articles like https://www.cfapubs.org/doi/pdf/10.2469/faj.v72.n3.1 which discuss this.  I mostly wonder whether 32 is as historically high as it appears to be.  (The other thing that will happen is 2009's horrible earnings will drop off next year, although that will only change things a few points.)

bluebelle

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Re: Hitting FI Goal - Could use some advice - Am I REALLY FI??
« Reply #31 on: May 09, 2018, 12:49:45 PM »
I just want to add my two cents.

I think it's nuts to want to retire on $22k and less.

Are you truly doing that now?
Have you replaced a roof?
Have you bought a used car?
Have you had a transmission repaired?
Did all this come out of your $22k?
 How about a hospital trip?
 Property tax, car insurance, Utilities, Health Ins, Cellphone, Electric,
House Ins, Cable, Food, etc.
 Just my fixed bills are about $30k.

 Just to make my position clear, retiring on $22k is nuts.

However, to each their own.

but how do you really feel about it?  :-)