Can everyone retire in 6 years if they have a 6 figure income?

[totoro]

Those assumptions apply to very few people - nowhere near 3-4%.  I'd say you are well under 1%. 

Isn't there a 50% divorce rate in the US?  Seems like that rules out a significant part of your sample's ability to save that much. 

Add in those with kids or medical bills or kids and medical bills and another huge swath of the sample is ruled out.   

Your title is totally misleading and should really read "Can a single person earning an average of $183,000 a year who doesn't ever plan on having kids retire after six years?".

[2Birds1Stone]

I think the title should read "Please click this link to my blog".

[Alectejas]

However, a dollar saved has a greater value than a dollar earned for a number of reasons....

This is wrong for reasons that I have explained in countless past posts (although every time it provokes obstinate reactions).

Let's suppose you are currently earning $100,000 per year after taxes and spending it all because you are a consumer sucker. Applying frugality can allow you to reduce your expenses to some value ɛ>0, but for simplicity, we'll say frugality allows you to reduce your expenses to zero, so that you can save $100,000 per year. That is the upper bound. No matter how frugal you become, frugality can only allow you to save $100,000 more per year than you were saving before. By contrast, if you increase your income to $1,000,000 per year after tax while continuing to spend only $100,000 per year, now you are saving $900,000 more per year than you were before. In other words, increasing your income was 9 times as powerful as frugality.

I explain this every time, but I will state it again: I am not suggesting that you should not be frugal. Frugality and income enhancement are not mutually exclusive. The best case scenario is that you increase your income to $1,000,000 and decrease your spending to zero. But as a matter of basic math, it is just wrong to say that frugality is more powerful than increasing income, because spending has a floor -- namely, zero -- whereas income has no ceiling. Once again, this is not something that should upset you. The only reason I continue to point this out is that I do not understand why some forum members insist on peddling nonsensical claims like "only your saving percentage matters" or "saving is more powerful than increasing income". We should be encouraging people to do everything they can to retire faster, and advocating bad math does not help with that.

Math is only part of the story.  ER is a counter-culture phenomenon.  The central concept is that a free-thinking individual can make a conscious choice to opt out of consumerism in exchange for early retirement.  The emphasis is therefore on savings and frugality, forum members "peddling nonsensical claims" are merely staying true to the original idea.  Saving is more powerful than increasing income because it represents an alternative to the standard Western approach.  In Walden, Thoreau didn't say that he should quit his "cabin in the woods" to a get a second job in town to boost his income, did he?

[tmoneyearlyretiree]

I assumed the person in the sample had $100k of debt to start out at a 6% rate. If I dropped it to no debt but 100k income, ie a lot of the chem eng, materials eng, and programming friends I graduated with from a low cost state university, use a lower effective rate of 25% for taxes (lower income) and use the actual spending I experienced as a single male in Philadelphia of $18 k annually, my title is extremely accurate. I included an example of a worker w debt and only slightly more income than 100k to prove the point.

Also yes divorce happens but if ppl followed that plan they would be FI before their first marriage on average. Also can ppl expound on kids medical bills? Doesn't ACA impose out of pocket max ? Truly ignorant of expenses that could fall outside of this cap as no kids right now

[totoro]

I'm not disagreeing that a single male earning $180,000/year could do this if they wanted to continue living at $25,000 a year including shelter costs for life and didn't want a family or married someone who earned as much or more.  Just need to re-title it is all cause everyone can't.   

Earning $180,000 a year puts you in the top 3-4% in the US. I hope engineering grads earn this much - my son starts his degree next year.

Raising kids on $25,000/year including shelter costs is tough.  If you get divorced where I live you'd have to pay child support.  If you have an engineering degree and can earn that much the courts will impute income to you at the level you are able to earn and you'd end up paying more than that $25,000 a year in child support alone, not counting spousal or division of assets and not counting any set-off from spouse's income if children are 50:50. 

As for medical costs, maybe that is just my impression of the US and things have changed.
 

[MoonShadow]

I assumed the person in the sample had $100k of debt to start out at a 6% rate. If I dropped it to no debt but 100k income, ie a lot of the chem eng, materials eng, and programming friends I graduated with from a low cost state university, use a lower effective rate of 25% for taxes (lower income) and use the actual spending I experienced as a single male in Philadelphia of $18 k annually, my title is extremely accurate. I included an example of a worker w debt and only slightly more income than 100k to prove the point.

You should be wary of using your own life experiences to generalize.  It's great that you make such a great income, and have known many young professionals who do the same.  This is not normal, however; and your thread (article) title is misleading.

Also yes divorce happens but if ppl followed that plan they would be FI before their first marriage on average.

When is this average marriage?  I married at 20, first kid at 25.  The average graduate, able to earn $150K or more, graduates at what; 24?  The average BS degree takes 6 years, correct?  Sure, it can be done in four; sometimes even less.  But you switch back and forth from an extraordinary single adult to an average?  That's nonsensical.  You would have your average graduate not consider marriage or kids before 30?

 Also can ppl expound on kids medical bills? Doesn't ACA impose out of pocket max ? Truly ignorant of expenses that could fall outside of this cap as no kids right now

The medical costs of kids is almost negligible for the overall cost of raising a child in the United States.  I believe the average cost of raising a child, not counting education, is around a quarter of a million dollars each.  http://money.cnn.com/2014/08/18/pf/child-cost/

I have five.

So, could I (personally) retire in 6 years making what I make?  No.  My home will be an empty nest 5 weeks after I turn 55.  At that point, I predict that my wife & I's expenses will drop below $40K (in current dollars) not counting any remaining mortgage payments.  I can retire at any point afterwards, which I may or may not actually do.  But if I was single and childless, I could have already been retired, but more likely I'd just be drunk on a beach somewhere; which is far from the same thing.  A wife has a huge regulating effect on a man's lifestyle; children more so.  IMHO, an early retirement wouldn't really have the same attraction without family; wife, kids and eventually grandkids; to spend that time with.  As has been noted on this forum many times, men were made to work whether we are "retired" or not.  MMM is a fine example of that, himself.  I don't even imagine that I will simply stop working altogether.  My idea of FIRE is to have enough of a stache that I don't need to worry about the next layoff, or hunting for more work in my field should that occur.  That I don't need to concern myself with what my 10-years-my-junior manager thinks about how much family time I take off, he does.  And it also means that I may just be spending more of my work day in the sun, cutting firewood or weeding my garden, than under fluorescent lighting.

[MoonShadow]

Earning $180,000 a year puts you in the top 3-4% in the US.

$180K annual income, particularly over a period of several consecutive years, would put that earner into the 99th+ percentile in the United States, and at least the 99.9th percentile worldwide.  In a nation with over 300 million people, I'd be shocked if half a million ever earn that much in two consecutive years.

And the national median household income last year was $51K.  That counts all the income of every person in the family during that year; which usually means spouses, but also any wages of children (adult or not) who file as dependents upon the 'rents taxes.  That can be up to 26, if the adult child is primarily a full-time student without a separate address.

The median individual income in the US (2012 was the most recent data I could find here) was only $26,965.  (http://www.mybudget360.com/how-much-do-americans-earn-what-is-the-average-us-income/)

So our mythical single earner starts out making almost 6 times typical, and ends up making almost 8 times typical in less than a decade.

[totoro]

Earning $180,000 a year puts you in the top 3-4% in the US.

$180K annual income, particularly over a period of several consecutive years, would put that earner into the 99th+ percentile in the United States, and at least the 99.9th percentile worldwide.  In a nation with over 300 million people, I'd be shocked if half a million ever earn that much in two consecutive years.

I think that is incorrect.  Over 180 and you were in the top 4.7% in 2011 in the US - probably more people earning this now.  http://www.payscale.com/career-news/2011/10/the-one-percent

[EricP]

@OP,

If it's for "6 figures" then why use $150k scaling up to $200k as the assumption?  I get that it was the way to make the phrase work, but I think it should be based on $100k in income as that is what 6 figures is.

I like the premise, though, and have no issue with you only addressing a small subset of the population, I mean it's pretty much MMM's target audience anyways, so I see little difference.

[tmoneyearlyretiree]

The truthful reason is I'm dating a medical fellow with 100,000 in debt and we were debating if early retirement applied to doctors and the medical profession in general. I said that it did if someone was so motivated and she wasn't convinced, so that was the genensis of the article. In my head I was picking a hypothetical pediatrician or family doctor w 100k of med school debt that would start off at 150k and gradually increase to 200 before leveling off there.

My comment above though looks at the scenario of 100k. I never experienced this salary full disclosure but the folks that came out of undergrad and took jobs in New Orleans working for Exxon all made more than that.

The 100k a year for six years math while saving 55% pre tax works out. Someone feel free to challenge me if I'm wrong but the only scenario I see that not working out is if the stock market cratered in year 5 or 6. That's why I think the article is accurately titled. Perhaps I should've done the scenario in my post without any debt I just did it to show that even coming out w student loans you can do it.

[2Birds1Stone]

Most doctors end up with much more debt than $100k after med school.
Most doctors don't finish residency/fellowship till age ~30, during which they make $40-60k/yr while interest accrues on student loan debt.
Most doctors are not interested in pulling the plug on work so soon after spending 10-12 years in higher education.

[MDM]

The 100k a year for six years math while saving 55% pre tax works out. Someone feel free to challenge me if I'm wrong

See reply #1, and note that calculation assumed 7% returns.

Background can be found in http://forum.mrmoneymustache.com/ask-a-mustachian/fire-in-8-years/.

[tmoneyearlyretiree]

so i think why I probably sounded confusing is the def of "works out." Just ran the numbers w 6% return and 55k savings a year w 0 debt and got a little over $15,000 a year in safe withdrawal amount. That's tight but doable as blogs like ERE have shown. Also, if you move to a cheaper place than where you got that 6 figure income, it's a definite yes that you can retire in 6 years with a 6 figure income. IE I worked in Philadelphia but grew up in Pensacola. If I was willing to share an apartment with someone there I could be living in luxury there on 15k a year. You could go down an extreme path in that thinking though. A friend in Teach For America told me when they were working in the MS River Delta region that you could rent a nice room in a big house for $100 a month. It all depends on where and how you want to live as to whether it's possible to retire early.

[totoro]

The truthful reason is I'm dating a medical fellow with 100,000 in debt and we were debating if early retirement applied to doctors and the medical profession in general. I said that it did if someone was so motivated and she wasn't convinced, so that was the genensis of the article. In my head I was picking a hypothetical pediatrician or family doctor w 100k of med school debt that would start off at 150k and gradually increase to 200 before leveling off there.

My comment above though looks at the scenario of 100k. I never experienced this salary full disclosure but the folks that came out of undergrad and took jobs in New Orleans working for Exxon all made more than that.

The 100k a year for six years math while saving 55% pre tax works out. Someone feel free to challenge me if I'm wrong but the only scenario I see that not working out is if the stock market cratered in year 5 or 6. That's why I think the article is accurately titled. Perhaps I should've done the scenario in my post without any debt I just did it to show that even coming out w student loans you can do it.

Show us your math at $100,000 a year with no debt and it might make sense as a title. 

In Canada at 100k following no income while in school there is no RRSP deduction.  $18,000 could be contributed in each successive year and tax sheltered.  First year taxes would be $24,000 or so.  Second year and each year after with RRSP taxes would be $18,000.

If you can live on $24,000 a year, which is possible as single renter here living carefully without a car, you'll end up with about $342,000. 

So six figures for a six-years to retirement scenario does not work for Canadians, especially since RRSPs are taxable upon withdrawal.

[thd7t]

Earning $180,000 a year puts you in the top 3-4% in the US.

$180K annual income, particularly over a period of several consecutive years, would put that earner into the 99th+ percentile in the United States, and at least the 99.9th percentile worldwide.  In a nation with over 300 million people, I'd be shocked if half a million ever earn that much in two consecutive years.

I think that is incorrect.  Over 180 and you were in the top 4.7% in 2011 in the US - probably more people earning this now.  http://www.payscale.com/career-news/2011/10/the-one-percent

On the face this looked incorrect to me, but it could be true if we correct for age groups (younger professionals are not usually the highest earners)

[sirdoug007]

so i think why I probably sounded confusing is the def of "works out." Just ran the numbers w 6% return and 55k savings a year w 0 debt and got a little over $15,000 a year in safe withdrawal amount. That's tight but doable as blogs like ERE have shown. Also, if you move to a cheaper place than where you got that 6 figure income, it's a definite yes that you can retire in 6 years with a 6 figure income. IE I worked in Philadelphia but grew up in Pensacola. If I was willing to share an apartment with someone there I could be living in luxury there on 15k a year. You could go down an extreme path in that thinking though. A friend in Teach For America told me when they were working in the MS River Delta region that you could rent a nice room in a big house for $100 a month. It all depends on where and how you want to live as to whether it's possible to retire early.

You keep moving the goal posts to maintain the catchy "six years with six figures" theme.

To get to 6 years to FI with 6% real returns you need so save the following amounts with various levels of spending:

Annual Spending            Accumulation Savings/Yr
$5000                           $18,000
$10,000                        $36,000
$15,000                        $54,000
$20,000                        $71,000
$25,000                        $90,000

Basically you need a 78% after tax savings rate to get to FI in six years.  That is very aggressive, more aggressive than even MMM.  Hardly something you are going to convince your average medical resident to go for.

[MoonShadow]

Earning $180,000 a year puts you in the top 3-4% in the US.

$180K annual income, particularly over a period of several consecutive years, would put that earner into the 99th+ percentile in the United States, and at least the 99.9th percentile worldwide.  In a nation with over 300 million people, I'd be shocked if half a million ever earn that much in two consecutive years.

I think that is incorrect.  Over 180 and you were in the top 4.7% in 2011 in the US - probably more people earning this now.  http://www.payscale.com/career-news/2011/10/the-one-percent

The article that you reference is talking about household incomes, not individual incomes.  A two income household, both adults earning $80K to $100K, would land this household right in that zone.  Individually, however, neither is very likely to meet the criteria of this thread's OP; which by it's own definition, was an individual income.

[totoro]

I think you are right. On a personal income level those who earn over 159k are in the top 5%.  Data is on financial samurai's website - I'll link it later when not on the iPhone.

[ysette9]

I believe someone already mentioned it above, but just to make sure it is stated clearly, the places in the country where individuals can earn $100K+ year after year are almost always going to come with a much higher COL price tag. As an anecdote, my husband and I have both been fortunate enough to pass that mark in our careers but a fixer-upper 1300ft^2 house will also run you over a $million. Very few are living on $15K/year in our area.

[Cathy]

...If you have [a marketable] degree and can earn that much the courts will impute income to you...

This is potentially a threat to being able to retire early for people who enter into romantic relationships or have children or both.

I did locate one case where the spouse had been previously ordered to pay spousal support (commonly referred to as "alimony"), but after the order, the spouse decided to take "early retirement". After the "early retirement", he applied to the Court to end the spousal support obligation on the basis that he no longer had any employment income. His former partner attempted to impute income to continue the support obligation, but the Court found that the decision to retire early was "not unreasonable, and was not made for any improper motive", and so the obligation to pay support was cancelled. Shiels v. Shiels, 2015 BCSC 1060, ¶ 55. However, the so-called "early retirement" in this case took place after the retiree was 60 years old. Id., ¶ 17. That doesn't sound very "early" to me. It might be harder to avoid income imputation in case of an actual early retirement.

[Scandium]

You say engineering grads can start over six figures? Maybe in petroleum industry, with 200+ travel days a year. Maybe. I'm in a small engineering field in a HCOL area and I doubt most managers (in their upper 40s) here break $150).

Heck, I'm six years in and just shy of six figures! And COL here is $25k just in housing. If you lived in a dump maybe you'd only spend 50% of your proposed budget in rent..

I think starting salaries at Google are around $150k, but average rent in SF is also $3000+/month.

Kinda hilarious how unrealistic these assumptions are. There might be more lottery winners than people who could apply this advice.

[totoro]

It is a huge risk and completely unfair the way the law is right now in my opinion.  Early retirement is not an option for many of these folks.

In the case you cite the man was over 60 and in poor health and unable to work.  He had been paying spousal support for 20 years and his ex-wife had voluntarily retired early at 53 while continuing to get $1500/month in spousal.

Look what happens with spousal at 50 if you want to retire early: http://hhlaw.ca/2010/06/11/early-retirement-what-happens-to-spousal-support/

Child support has the same imputation rules.  Voluntary early retirement is not an option.  If you were a high earner but live on $25,000 your ex-spouse is not required to do so.  The income is payable with no thought to the requirement to be frugal or save by either party.

Here is the information on personal income levels in the US: http://www.financialsamurai.com/how-much-money-do-the-top-income-earners-make-percent/

[Cathy]

It is a huge risk and completely unfair the way the law is right now in my opinion.  Early retirement is not an option for many of these folks.

I agree with this. This area of law did not develop with Mustachian principles in mind. Indeed, I cited Shiels, supra, as an example of how the circumstances under which the courts will entertain an "early retirement" are much different from the kind of "early retirement" that we discuss on this forum.

However, given that the law is what it is (in jurisdictions where this is true, at least), entering into romantic relationships or engaging in potentially procreative sexual activities are calculated risks. A romantic relationship is a chance to double your income and decrease your expenses, potentially skyrocketing you to a rapid retirement, but it comes with significant risk. Similarly, potentially procreative sex might feel good (according to the popular news media) and children might be very worthwhile to raise, but under current law, these are activities that come with risks. As such, having one's early retirement derailed by spousal or child support obligations is not like being hit by lightning; it is rather an example of people "bear[ing] the consequences of the risk they have knowingly assumed". R. v. Levkovic, 2013 SCC 25, ¶ 35. (Levkovic has nothing to do with this topic; I just like this quote.)

[totoro]

Yea, I'd have to disagree strongly.  The system was built on case law developed from a time when women stayed home with kids and supported their husbands.  Times have changed drastically and the laws being applied are quite unreasonable and illogical imo.  Most people have no idea what kind of deal they are part of until relationship breakdown.  Given the 50% failure rate I think it is time to re-examine the laws with a view to incentivizing written agreements and reasonable standards of economy.  And I am a woman.

[MoonShadow]

Yea, I'd have to disagree strongly.  The system was built on case law developed from a time when women stayed home with kids and supported their husbands.  Times have changed drastically and the laws being applied are quite unreasonable and illogical imo.  Most people have no idea what kind of deal they are part of until relationship breakdown.  Given the 50% failure rate I think it is time to re-examine the laws with a view to incentivizing written agreements and reasonable standards of economy.  And I am a woman.

I don't know about other states, but Kentucky doesn't really order alimony anymore.  If the wife has any marketable skills at all, and often when she does not, family court only honors child support these days.

[Gone Fishing]

My rule of thumb is save and invest 50%+ of your income.  After a decade or so, you should be able to nail down some more detailed ER plans. 

[tmoneyearlyretiree]

The alimony consideration is certainly a real risk. Any links to threads or info on that would be appreciated. My point is there are always risks in everything we do that should be weighed against reward. For a lot of the people attempting ER, they hang around longer than needed after adjusting for side hobby income. That could save people years in their lives and I think erring the side of taking the plunge earlier is psychologically empowering to someone stuck in a job they dont like.

[Mmm_Donuts]

If the whole point is coming up with some sort of simple catchphrase that will make ER appealing and easy to understand for the 6-figure earning masses, then I am sceptical. Most six figure earners aren't interested in early retirement, in my experience. The pull of consumer culture is too strong. I don't see FIRE becoming a mainstream movement among the middle class higher earners, though maybe in time this will change, due to environmental necessity, or some other much deeper cultural shift. But a catchphrase is not enough.

[Baron235]

If the whole point is coming up with some sort of simple catchphrase that will make ER appealing and easy to understand for the 6-figure earning masses, then I am sceptical. Most six figure earners aren't interested in early retirement, in my experience. The pull of consumer culture is too strong. I don't see FIRE becoming a mainstream movement among the middle class higher earners, though maybe in time this will change, due to environmental necessity, or some other much deeper cultural shift. But a catchphrase is not enough.

Fixed it.  Most earners don't think about it.  But many on this forum are 6 figure earners and I bet that stats are out that a good percentage of those seeking FIRE earn well into the 6 figures. 

I bet in the normal population 6 figure earners actually think about it more because they are making enough money where it is easier to see being able to retire early. 

[sirdoug007]

If you are looking for something catchy how about "Save Fifty for Fifteen" as in 50% after tax for 15 years.

At 7% returns that gets you to FI.  It also doesn't require any magic *s about crazy starting salaries or nutty raises.  I think a lot more people can get behind that message.

[Mmm_Donuts]

If the whole point is coming up with some sort of simple catchphrase that will make ER appealing and easy to understand for the 6-figure earning masses, then I am sceptical. Most six figure earners aren't interested in early retirement, in my experience. The pull of consumer culture is too strong. I don't see FIRE becoming a mainstream movement among the middle class higher earners, though maybe in time this will change, due to environmental necessity, or some other much deeper cultural shift. But a catchphrase is not enough.

Fixed it.  Most earners don't think about it.  But many on this forum are 6 figure earners and I bet that stats are out that a good percentage of those seeking FIRE earn well into the 6 figures. 

I bet in the normal population 6 figure earners actually think about it more because they are making enough money where it is easier to see being able to retire early.

Well, in a HCOL area, six figures doesn't go very far with the typical family. I stand by my statement, as anecdotal as it is, that most six figure earners are also high spenders. In my life, mustachianism is a fringe movement, and I don't know anyone who has seen the light, or is even remotely interested in curbing consumption. It would be nice to see it happen mainstream scale, but I can't see it happening because of a catchphrase. And I certainly don't think it's as easy as saying "six figures = ER in six years." As others have mentioned, 25k is simply not doable for many families in HCOL areas. Where I live that would not even cover basic housing expenses for most people.

[MrsPete]

No, I don't believe that everyone with a 6-figure income can retire in 6 years. 

Too many possibilities exist, and people want different things.  Even if we assume that everyone with a high income recognizes this as a possibility and is willing to live a frugal life, so many choices /circumstances make a difference:

- One person never marries and has no children, while another marries and has a houseful of kids.
- One person is responsible only for himself, while another finds himself caretaker to an elderly parent or a mentally disabled sibling.
- One person feels sure 20K/year will be plenty, whereas another person is concerned about inflation and can't feel safe without a safety barrier.
- One person hates his job and can't wait to quit, while another likes his job well enough and doesn't 'specially want to retire extremely early.
- One person envisions his retirement years piddling around a hobby farm and enjoying grandchildren, while another sees himself traveling six months out of the year. 

The list could go on.  Some people could easily retire with this amount, while others couldn't. 

Certainly a high income increases the chances of early retirement being a possibility, but I wouldn't say it's an iron-clad promise.

[brooklynmoney]

I believe someone already mentioned it above, but just to make sure it is stated clearly, the places in the country where individuals can earn $100K+ year after year are almost always going to come with a much higher COL price tag. As an anecdote, my husband and I have both been fortunate enough to pass that mark in our careers but a fixer-upper 1300ft^2 house will also run you over a $million. Very few are living on $15K/year in our area.

Preach!!!

[Alectejas]

Yea, I'd have to disagree strongly.  The system was built on case law developed from a time when women stayed home with kids and supported their husbands.  Times have changed drastically and the laws being applied are quite unreasonable and illogical imo.  Most people have no idea what kind of deal they are part of until relationship breakdown.  Given the 50% failure rate I think it is time to re-examine the laws with a view to incentivizing written agreements and reasonable standards of economy.  And I am a woman.

Marry in haste, repent at leisure.

[Guses]

It's easy to fall into the trap of thinking that other people decide how much money you earn, and that you have no control over it other than to accept a meagre 3% raise each year, but that is not true. There are many things that can be done to raise income if you want to retire faster.

I have started several threads on this and many on this board can't seem to wrap their heads around this point.  It is amazing to me that otherwise extremely intelligent people can summarily dismiss their own capacity to generate income independently from their W2 employer.  They simply have never spent any effort trying and they'll generally fall back on the belief that cutting expenses is the only ticket to wealth.  Most of the wealthy people I know would prefer to focus their attention on earning more instead of clipping coupons because the former activity has a much higher return on their time and effort.

If your goal is consuming more ressources and having a more luxurious standard of living, sure, investing your time and energy in getting more income might be a good idea for you. On the other hand, learning to live on less is a much more satisfying (and quicker) approach if you don't seek that lifestyle inflation.

I could be FI right now if I was satisfied with $20K per year. Instantaneous retirement. I can't make enough money to retire as fast even if I mutiply my, already substantial, salary.

How much time and mental energy would I need to dedicate to create a business generating 250,000$ per year profits? I am guessing it is quite subtantial judging by the very small number of people pulling in those numbers.

[Bearded Man]

I wrote an article for my blog about the math of early retirement with a big income stream and how anyone with 100k plus should be able to be FIRE in 6 years max. Even with 100k in debt if you assume 50% savings rate and living on modest 20k expenses assuming no market crash it gets you to about 20-30k income after that point. The only folks I think there's no hope for our those unwilling to move away from SF or NYC as well as anyone with 200k or more in debt. I think translating early retirement into rules for the general public could help the movement. Six figures means six years to freedom. Hopefully that's a catchy phrase. Anyhow folks can click my site on my signature below if they care to read more or comment about it.

I wanted to comment on the relocation aspect of your post, as I think it is an often overlooked aspect to retirement, especially early retirement. If you have no intention of returning to a high paying career in the big city, it makes no sense to stay in the big city in retirement. The expenses mean you have to work longer to pay high expenses in retirement when you aren't benefiting from it by being in close proximity to a high paying job. At that point, it makes sense to relocate to a cheaper location, either in the same state or other states, with a lower cost of living, taxes, etc. You can buy a house for 50-80K in desirable, safe neighborhoods in many states, just because there are no real jobs in those areas, so the cost of living is low. I plan to do this myself, although, I will evaluate in 6 more years and see if I feel like quitting altogether or if I am willing to keep working but just change careers to something easy.

[Gone Fishing]

If you are looking for something catchy how about "Save Fifty for Fifteen" as in 50% after tax for 15 years.

At 7% returns that gets you to FI.  It also doesn't require any magic *s about crazy starting salaries or nutty raises.  I think a lot more people can get behind that message.

I like it!

[mr_orange]

If your goal is consuming more ressources and having a more luxurious standard of living, sure, investing your time and energy in getting more income might be a good idea for you. On the other hand, learning to live on less is a much more satisfying (and quicker) approach if you don't seek that lifestyle inflation.

Making more money does not mean you have to have lifestyle inflation.  Whether or not the approach of lowering your spending is quicker depends on your circumstances. 

How much time and mental energy would I need to dedicate to create a business generating 250,000$ per year profits? I am guessing it is quite subtantial judging by the very small number of people pulling in those numbers.

It certainly isn't easy.  If it was everyone would do it.  There are many people I know that make great profits from small businesses that are not rocket surgeons though.  They simply are selecting a different avenue for investing their most scarce resource which is their hours in the day. 

[bacchi]

It certainly isn't easy.  If it was everyone would do it.  There are many people I know that make great profits from small businesses that are not rocket surgeons though.  They simply are selecting a different avenue for investing their most scarce resource which is their hours in the day.

Obviously, the people on this forum you're preaching to (see your previous 3 threads) don't care to make that choice.

Perhaps a more relevant question is, why does this bother you so much?

[mr_orange]

Obviously, the people on this forum you're preaching to (see your previous 3 threads) don't care to make that choice.

Perhaps a more relevant question is, why does this bother you so much?

That's fine.  I appear to not be the only only because I was simply piggybacking on someone else's comment.  Feel free to ignore anything that doesn't fit with your personal philosophy, but don't pretend that everyone has the same views and goals as you do. 

Oh....and I bother so much because cutting expenses is not the only way to financial independence and is not actually optimal for some people. 

[MrMoogle]

I'm going out on a limb here and saying everyone making 6 figures *can* do it in 6 years.  Just most people aren't willing to make the sacrifices.  Even many mustacians living in HCOL are willing, as seen in this thread.  Just because you can do something, doesn't mean you should.

On the $1 saved > $1 earned.  There's a fiscal issue, and a standard of living issue.  Making minimum wage, making an extra dollar is better than saving, because of the standard of living decrease saving that dollar would cost.  Where most anti-mustacians are, saving a dollar wouldn't really cost anything in standard of living, where making an extra dollar would cost time at work. 

For me, I don't get overtime, so to get an extra dollar, I would have to take a part time job making less than I currently do.  So saving a dollar might cost me 3 minutes, but making another might cost 6 minutes of work time.

Starting my own business might be a valid way to make more money, but there's also more risk there too.   

[tmoneyearlyretiree]

Like multi billion dollar businesses like Uber and Airbnb have shown us, you don't have to have massive capital outlay to start a business. Your time is totally a cost, but if you can set up a gig doing some carpentry work like MMM or other hobby you'd do for fun anyway, then you can remove the uncertainty of the math not working out.

However, one of the previous commenters made a great point. Most people do not wish to consider making sacrifices to achieve early retirement. a $25,000 a year budget for a family of 3 might be an amazing achievement in Longmont, Colorado, but $25,000 a year in a rural community in the South puts you solidly in the middle class. It depends on what kind of life you want to lead. If you desire material comforts and expensive living quarters in a big metropolis it's not going to work out.

Another idea: A lot of grads working in higher end starting positions might make close to 6 figures, like 60-80k level. They could pick up a side gig tutoring, bartend on the weekends, or some other way to make more money and achieve that 100k a year level. Most jobs require 40-60 hrs of work and you could augment your working hours 10-20 a week below the Investment Banking route if it was for a serious goal you had in mind.