Achieved 20x annual expenses in income producing assets

[No Name Guy]

I don't talk actual numbers, since that is TMI on the 'net.

But, since FI is scale invariant, it doesn't matter (e.g. with 10k annual expenses, one needs 25-33 times this, same as if one has 50k annual expenses). 

I recently achieved accumulating 20x of annual expenses in income producing investments.  I'll declare FI / ER / IW once I'm comfortably north of 33x, and hence have a 3% withdrawal rate.  I'm currently adding at least 1.5 years worth of expenses to the 'stache each year.  Add to that investment returns and I figure I'm under 5 years to FI / ER / IW.

Nice thing of having 20x expenses in the 'stache?  My current job is insecure, as in a real possibility of layoff in the near future....I'm NOT in panic mode.  If need be, part time minimum wage work will suffice to supplement the passive income.

[NumberCruncher]

Nice thing of having 20x expenses in the 'stache?  My current job is insecure, as in a real possibility of layoff in the near future....I'm NOT in panic mode.  If need be, part time minimum wage work will suffice to supplement the passive income.

w00t! 

Must be an awesome feeling.  :)

[arebelspy]

Congrats!  5% SWR is a badass milestone. :D

[Johnny Aloha]

Congrats!

How have you done it - stocks, real estate, starting a business, other?

[No Name Guy]

Congrats!

How have you done it - stocks, real estate, starting a business, other?

The most fundamental way possible:

Spending a heck of a lot less than what I earn.....since long before discovering Jacob / ERE and subsequently MMM.  (Shout out to Jacob for crystallizing / providing a framework around which my habits / inclinations could gel.)  Time is your friend, although I wish my natural inclinations had been toward a 40-60% savings rate when I was younger, in lieu of 20-ish percent.  I'd be FI by now.

After that, its all flavor......yeah, stocks, bonds, RE that could be an asset that (in my book) currently isn't (as in, I live in said RE, so there's no net cash inflow, however it does provide the non-cash utility value of shelter, and I suppose I could rent it out and move it to the "asset" side of the ledger at whim, in which case I'd be at 28-30x expenses).  I'd though about a business in the past, but didn't do it do to changing circumstances.

So nothing magical - modest savings rate when younger, coupled with a much higher savings rate in recent years.

Future:  I'll look into rental RE for part of getting from 20x to 33x and beyond, if it pencils out in my local market.

[Megatron]

may I ask your age and if you did it with an SO or by yourself.

[No Name Guy]

Solo & 40's. 

The recent SO (in the last few years) is also approaching ER / FI / IW, although she doesn't quite know it.....yet.  She's north of 20x as well.

If we combined finances (e.g. married) and lived like MMM and Mrs MM, we'd be there today.  But until such time, we're on a parallel path to ER / FI / IW.

[ChoicesChoices]

I need to ask a question here about the term income-producing assets.  When that term is used, is the income restricted to the dividends/interest paid, or would the income include market appreciation that you "harvest" during the year, thus maintaining the principal?  The withdrawal to cover expenses could be either/both, right?

Thanks for entertaining my rather basic question.

[arebelspy]

I need to ask a question here about the term income-producing assets.  When that term is used, is the income restricted to the dividends/interest paid, or would the income include market appreciation that you "harvest" during the year, thus maintaining the principal?  The withdrawal to cover expenses could be either/both, right?

Thanks for entertaining my rather basic question.

The classic 4% SWR from the Trinity study is based on a total return, so the latter (harvesting appreciation).  Seem design a strategy to only live off of dividends, but this is typically less than a 4% SWR.