Post
Topic
Board Economics
Re: Financial Independence Retire Early [F.I.R.E]
by
franky1
on 05/01/2025, 21:18:17 UTC
I don't like the particular execution of this idea because a goal of 25x your living expenses will only last you for 25 years and then after that you'd have to go to work again.  Grin
nope.. having 25x of lifestyle capital does not mean only 25 years of expenditure
if you are only removing 4% of the lump, but the lump grows by 8%-200% per year then the lump gets bigger not smaller(thus unlimited years)

But more importantly many people thing that the way to become rich enough to retire early is to penny-pinch as much as possible, but that makes you quite miserly and you won't be able to enjoy anything.

to be rich is to foolishly spend on lambos and glamorous stuff to show off..
to build wealth is to initially live frugally to start the investment if your income is low.. and then live lavishly once your 4% outgoings from wealth is less than growth, but where the 4% allows you to live a good lavish life of exploration and experiences

the difference between being wealthy vs rich is that:
being rich means you spend your capital on show-off stuff, such as owning 7 lambo's even though you are just one person (one person cant drive 7 cars at same time so unneeded spend)

being wealthy is where your capital increases even when you are lavishly spending on wise purchases that you do need and want. emphasis on the wise
such as one good performance car that does what its suppose to and is reliable