Poll

How many years until you hit financial independence? (Not necessarily Retire)

I am financially Independent now baby!!!
20 (8%)
OMY - One More Year - Yes it might be a symptom
9 (3.6%)
Two more years
10 (4%)
Three more years
11 (4.4%)
Four more years
10 (4%)
Five more years
11 (4.4%)
Six more years
8 (3.2%)
Seven more years
21 (8.4%)
Eight more years
14 (5.6%)
Nine more years
10 (4%)
10 - 12 years
69 (27.6%)
13 - 15 years
24 (9.6%)
16 - 20 years
27 (10.8%)
Over 20 years.
6 (2.4%)

Total Members Voted: 239

Author Topic: How Many Years to Financial Independence?  (Read 12811 times)

tomsang

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How Many Years to Financial Independence?
« on: August 10, 2013, 11:18:07 AM »
Last week I did my first poll and it was so exciting that I decided to try a couple of more. Note I figured out how to add more options, which may add more precision to an educated guess or just show people are all over the board. I am asking how many years until you hit financial forever independence based on what your expected future needs. So if you are single and FI, you may be putting a few more years if you anticipate marrying, having, kids, dog, or whatever your dreams of a future entail.

I am also going to put together another poll on how many years people are going to work after hitting FI.

Moderators I was checking to see if someone already did a poll like this and did not see one. If I missed it please feel free to delete. Also, would it make sense to have a forum of polls so people can see them all in one spot?


steveo

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Re: How Many Years to Financial Independence?
« Reply #2 on: August 10, 2013, 05:03:33 PM »
I said 10-12 and I'm 40.

Baylor3217

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Re: How Many Years to Financial Independence?
« Reply #3 on: August 10, 2013, 11:52:00 PM »
At mid-30s, I'm technically there now. I like my job and plan to work at least another 5 years. I'd like another decent sized market drop so I can plough some more cash into the market.

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Re: How Many Years to Financial Independence?
« Reply #4 on: August 11, 2013, 12:07:01 AM »
There now, thanks to my father. Still very overwhelmed with the idea.

Myrmida

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Re: How Many Years to Financial Independence?
« Reply #5 on: August 12, 2013, 08:42:49 AM »
I said 10-12, but that's assuming:

1. my spouse doesn't work again (he's a stay-at-home-dad to our young son);
2. we don't reduce our expenses any more; and
3. I don't get any raises beyond inflation.

So, it could be earlier than that, but I don't want to count on it.

AlmostIndependent

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Re: How Many Years to Financial Independence?
« Reply #6 on: August 12, 2013, 09:20:46 AM »
I said 2, but I'm hoping it's more like 1. I don't want to jinx it.

sleepyguy

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Re: How Many Years to Financial Independence?
« Reply #7 on: August 12, 2013, 01:37:38 PM »
Probably between 6-8yrs for us.  We're both 34 right now.  Our plan is to build up enough to draw 4%, but she'll still do some consulting work (she wants to) and I'll probably become a tennis instructor for fun.  We also have a rental condo that is doing well, that we can sell later or keep renting (long term tenant, but it's easy to rent... heart of Toronto).

seattlecyclone

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Re: How Many Years to Financial Independence?
« Reply #8 on: August 12, 2013, 04:00:12 PM »
I said four more years, but it could be longer depending on how our expenses change when we have kids and how my employer's stock price holds up over time.

sloof70

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Re: How Many Years to Financial Independence?
« Reply #9 on: August 12, 2013, 05:41:49 PM »
I hope 15.  I really do.  Less if possible.  I'm 25 now and only really started a year ago.

AlmostIndependent

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Re: How Many Years to Financial Independence?
« Reply #10 on: August 12, 2013, 06:57:39 PM »
I hope 15.  I really do.  Less if possible.  I'm 25 now and only really started a year ago.

I'm 32. When I was 25 it seemed a long way off. If you stick with it you'll get there a lot sooner than you imagine. I was shooting for my 50's when I started. Now I'm looking at 35 (barring any major catastrophes)

Rural

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Re: How Many Years to Financial Independence?
« Reply #11 on: August 12, 2013, 08:06:23 PM »
Seven.

tomsang

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Re: How Many Years to Financial Independence?
« Reply #12 on: August 17, 2013, 09:42:19 AM »
Interesting results with over half the people believing that they are going to be financially independent within 9 years, with 12% already financially independent and so far 0 taking 20 years or more to hit FI. In society that would be unbelievable, especially with the younger population here.

On my first poll I got so boxed in thinking that I only could have five choices, that I probably gave too many choices, but this poll shows how evenly by year people are planning on reaching FI.

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Re: How Many Years to Financial Independence?
« Reply #13 on: August 17, 2013, 10:56:03 AM »
I said 10-12, but that's assuming:

1. my spouse doesn't work again (he's a stay-at-home-dad to our young son);
2. we don't reduce our expenses any more; and
3. I don't get any raises beyond inflation.

So, it could be earlier than that, but I don't want to count on it.

Same situation here.  My wife works 60% FT, and I work 90% FT to be around our child more and have no daycare.  I always assume a flat amount of savings because it's easier, though I have hopes that when the youngest goes to school, we'll both be close to 100% FT again.

Myrmida

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Re: How Many Years to Financial Independence?
« Reply #14 on: August 19, 2013, 11:10:27 AM »
I said 10-12, but that's assuming:

1. my spouse doesn't work again (he's a stay-at-home-dad to our young son);
2. we don't reduce our expenses any more; and
3. I don't get any raises beyond inflation.

So, it could be earlier than that, but I don't want to count on it.

Same situation here.  My wife works 60% FT, and I work 90% FT to be around our child more and have no daycare.  I always assume a flat amount of savings because it's easier, though I have hopes that when the youngest goes to school, we'll both be close to 100% FT again.

A while after I posted that, I realized that I also assumed that:

1. I will not lose my job for any reason; and
2. we will not be hit by a (health or other) crisis that changes our ability to save.

So, FI could be further than my estimate, too.  I guess I'm just an optimist!

mindaugas

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Re: How Many Years to Financial Independence?
« Reply #15 on: August 19, 2013, 12:00:21 PM »
I'm 31 and said 12-15, my wife doesn't work and we're still in hair-on-fire-debt-emergency-mode.

kolorado

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Re: How Many Years to Financial Independence?
« Reply #16 on: August 19, 2013, 02:49:02 PM »
Assuming modest interest gains, average pay increases, good health and no lifestyle inflation, I figure 12 years. With good rates of return and higher than average raises we could be there in the 9 year range. We could downsize sooner rather than later and be FI in 7 years but without the possibility of world travel and we don't like that option very much. But it doesn't really matter since hubby doesn't want to stop working until he's 55 which is 14 years out. So that's what we're planning on. Honestly, I think we're saving way too much for retiring 14 years from now, and he only makes $20hr. But I'm allowing plenty of cushion should he change his mind 10 years from now and want to get out of the rat race. That and any extra will be cruise money. ;) If he collects any SS that's almost certainly going to be all cruise money since I'm not counting on collecting any.

Mike

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Re: How Many Years to Financial Independence?
« Reply #17 on: August 20, 2013, 02:38:22 AM »
Assuming my spending and income remain relatively constant and investment performance beats inflation by 5% / year, I will hit FI in around seven years.  The only events that could seriously alter this timetable would be the market taking a colossal shit in 2018-2020 or having some sort of serious health problems that obliterate my HSA and then some.

Realistically, I could hit FI anywhere from 5-10 years from now.

steveo

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Re: How Many Years to Financial Independence?
« Reply #18 on: August 20, 2013, 02:58:29 AM »
would be the market taking a colossal shit in 2018-2020

The stock market typically peaks at the end of each decade. Basically it often crashes at this point.

Mike

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Re: How Many Years to Financial Independence?
« Reply #19 on: August 20, 2013, 04:10:30 AM »
In 84 years, we've had nine major market declines in the S&P 500, and here they are:
October 2007-March 2009 (-56.4%) - real estate bubble burst
March 2000-October 2002 (-49.1%) - dot-com bubble burst
August 1987-December 1987 (-33.5%) - stock market crash
November 1980-August 1982 (-27.8%) - stagflation
January 1973-October 1974 (-48%) - oil embargo
November 1968-May 1970 (-36.1%) - Vietnam War escalated
December 1961-June 1962 (-28%)
May 1946-June 1949 (-29.6%)
September 1929-June 1932 (-86.1%) - Great Depression

Here's the distribution of the major declines' commencements based on the last digit of the year:
xxx0: 2
xxx1: 1
xxx2: 0
xxx3: 1
xxx4: 0
xxx5: 0
xxx6: 1
xxx7: 2
xxx8: 1
xxx9: 1

Aside from the fact this is a small sample size, I'd say this is fairly random.  Big declines are about as likely to commence near the end of a decade (years ending in 7-9) as they are at the beginning (0-2). 

steveo

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Re: How Many Years to Financial Independence?
« Reply #20 on: August 20, 2013, 04:52:34 AM »
To be fair I haven't verified this myself but I also wonder if you are cherry picking massive drops and not looking at the averages.

I did do a quick search and came up with this:-

http://www.seasonalcharts.com/zyklen_dekad.html
http://www.seasonalcharts.com/zyklen_dekad_dowjones_100j.html

and this one:-

http://www.dogsofthedow.com/deccyc-m.htm

I can't be bother verifying this in detail and maybe all you are concerned with is a massive drop which possibly can occur at any time.

Sofa King

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Re: How Many Years to Financial Independence?
« Reply #21 on: August 22, 2013, 06:34:31 PM »
4 years as long as I can keep making the $$$$$ I am now (or better) with no major breaks in employment.

Mike

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Re: How Many Years to Financial Independence?
« Reply #22 on: August 23, 2013, 06:55:02 AM »
maybe all you are concerned with is a massive drop which possibly can occur at any time.
I don't know about you, but I really don't care about 5-10% corrections.  They simply don't have much bearing on my FI date.  If my investments drop 5% the year I'm expecting FI, I would just work 2-3 extra months to recoup the losses between my contributions/market rebound and then walk away - all in all, not much different from the original scenario.

However, once you hit the bear market threshold (20% loss), the amount of time required to make additional contributions/wait for a market recovery grows.  If a bear market began one year pre-FI and lasted two years, it'd probably mean the FI date gets pushed back at least 18-24 months.  While not the end of the world, that would certainly be aggravating.  The bottom line is one must adapt to whatever the situation is - either by waiting a little bit to pull the plug due to a nasty market downturn or by cutting spending - or by doing a combination of the two.

GuitarStv

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Re: How Many Years to Financial Independence?
« Reply #23 on: August 23, 2013, 07:02:33 AM »
I'm 32 . . . hoping for retirement at 40.  We'll see how the kid on the way changes that plan though.

LalsConstant

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Re: How Many Years to Financial Independence?
« Reply #24 on: August 23, 2013, 12:00:43 PM »
I am still 20 plus years out but the fact is I am just getting started thinking about this.  I also use very conservative planning assumptions assuming a few worst case scenarios.

Anything significant like lowering major expenses (working toward cheaper housing next year already) or getting raises (I literally asssume stagnant income levels) would literally knock years off at a time.  I figure where there's a will there's going to be a way sooner or later.

arebelspy

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Re: How Many Years to Financial Independence?
« Reply #25 on: August 23, 2013, 12:15:30 PM »
One interesting thing about this poll that jumps out at me: the increase from people voting 9 years (9 people as of the time of this post) to people voting 10-12 years (54 people at the time of this post).

Given that the latter has three years worth of people retiring (anyone expecting to retire in 10, 11, or 12 years) versus one (people expecting to retire in 9 years), one would expect it to have 3 times the number of votes.

INSTEAD it has SIX times the number of votes, or more than double what one would expect!

It also has 2.5x the number of votes of the next one, 13-15 (which is also a three year span, so they should have approximately the same, but only has 21 votes at the time of this post).

My guess for this: people thing "eh, I have about ten years left" and vote that at a much higher rate.

People have no idea how long it will actually take, and are just guessing.  Otherwise the distribution would be much more spread out, not a huge jump for that one answer.

My guess?  Many of those people, taking the same poll in a year, would still pick that 10-12 year category (even though we'd expect 1/3 of them to move down to 9 years).
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travelbug

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Re: How Many Years to Financial Independence?
« Reply #26 on: August 23, 2013, 08:36:15 PM »
I voted 1 year.
Technically, we are FI now but we are selling our business and house to travel full time and we will be off in the middle of next year, so I chose 1 year on that basis.

mm31

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Re: How Many Years to Financial Independence?
« Reply #27 on: August 23, 2013, 08:43:12 PM »
According to networthify, about 11 years. If I decide on kids or a house, add 5-6 years to that date.

arebelspy

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Re: How Many Years to Financial Independence?
« Reply #28 on: August 23, 2013, 08:50:03 PM »
According to networthify, about 11 years. If I decide on kids or a house, add 5-6 years to that date.

If you do it right, a house should subtract time to FI, not add to it.
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Re: How Many Years to Financial Independence?
« Reply #29 on: August 24, 2013, 05:13:45 PM »
I said 16-20, but I really have no idea as I have not yet crunched the numbers.  I'm 23 and just started by first job out of college.  Debt free, single, and just now opening my eyes as to how wasteful my consumption has been up to this point.  I'm hoping that by putting the principles of frugality into practice I can become financially independent by the age of 40.  Here's to buying our freedom :)

Two9A

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Re: How Many Years to Financial Independence?
« Reply #30 on: August 25, 2013, 03:00:26 AM »
I voted over 20 years, based on the fact that I've only amassed $25k in savings by the age of 30, against a mortgage debt of $250k. I actually have no idea of the relative rates of accrual.

Recent developments may change that though, with one of the properties finally (finally) generating income.

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Re: How Many Years to Financial Independence?
« Reply #31 on: August 25, 2013, 07:02:48 AM »
I said nine more years, but since the next two of those are college that'll require a 75% savings rate. That's just a little bit of a stretch - just little enough that it's a challenge, not so much that it's overwhelming.

Zaga

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Re: How Many Years to Financial Independence?
« Reply #32 on: August 25, 2013, 07:08:14 AM »
My math says something around 18 more years, but I'm determined to make it in 15 or less.  I fully expect my income will be going up soon, plus this year is our best year for saving yet at above 45% of net.

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Re: How Many Years to Financial Independence?
« Reply #33 on: August 27, 2013, 03:44:39 AM »
My guess for this: people thing "eh, I have about ten years left" and vote that at a much higher rate.

People have no idea how long it will actually take, and are just guessing.  Otherwise the distribution would be much more spread out, not a huge jump for that one answer.
Posting a link to networthify or some other tool along with the poll may have smoothed out the distribution as well.

CorpRaider

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Re: How Many Years to Financial Independence?
« Reply #34 on: August 28, 2013, 07:13:52 AM »
Some of the confusion about how to compute the rate along with contingencies for future changes probably led a lot of us to "ballpark it".