Editor: Crass Cash

Rarely do you learn something from a celebrity, other than what NOT to do, but in this instance we can take a note on budgeting from Keira Knightly.  It's been reported in Glamour magazine that even though Keira has a net worth of $50,000,000 she limits her annual budget to $50,000.  Why??

She was raised by two actors and the lessons that they instilled in her are that it can all end at any moment.  Actors and actresses are notorious for falling out of favor with Hollywood.  Have you ever heard of Lindsay Lohan?  Seen any movies with Meghan Ryan lately?  

"I think living an [expensive] lifestyle means you can't hang out with people who don't live that lifestyle. It alienates you. Some of my best most hilarious times have been in the least luxurious places."

If she can do it, why can't you?  I knew there was a reason I loved her! 

Editor: Crass Cash

It appears as if the whole early retirement theme is catching on.  If the BBC is picking up on it, than maybe it's worthy of your attention.  Here is an article that I read this morning and I agree with all of it 100%. 

http://www.bbc.com/capital/story/20140404-yes-you-can-retire-at-40

If you don't believe what I've been saying, maybe you'll believe it if the BBC says it.  I was recently chastised for telling people on Facebook how I'm able to save two-thirds of my income.  The response was,  "Do you live in a hovel. You ride your bike. Ha, that's a good one!"  What's that phrase, "haters gonna hate"?  

I've come to the conclusion that some people just aren't capable of helping themselves.  If you're one of these people.  Just shut the fuck up.  I don't take dieting advice from fat people, so society shouldn't take financial advice from broke people who live paycheck to paycheck.  

Editor: Crass Cash

Before you embark on the great unknown of retirement you should try it out first.  What do I mean by this? Well you need to see if you can live off of what you think you can.  Most people have a magic number of what they think they're going to need in order to supply them with enough income to retire one day.  

This is fine, but some people have no clue how much they're going to need to retire.  What's the greatest fear of people who are retired in the USA?  It's not dying or public speaking.  It's running out of money!  The traditional metric is that you need 25 times your annual income in investable assets.  I've even heard 11 times.  I like to see 33 times, especially if you're going to retire young.  Note, this also does not include the equity that you have in your primary residence or any other asset for that matter that does not produce cash.  A million dollars of assets tied up in boats, homes, and raw land does nothing but drain you of cash.  It doesn't give you any.  

Regardless, the only true way that you're going to be able to figure how much you need is to live it.  If you think you need $80,000 to live off of, but you actually "need" $100,000 you're in trouble.  But if you think you need $80,000, but in reality you're perfectly happy doing everything you need off of $50,000 than you're in better shape than you thought.    

In project planning this is called a 'dry run'.  It's like taking a boat out for a day with the previous owner to see how it works.  Now here is the caution that you need to realize.  It's not perfect.  Your expenses when you're retired are going to be different than when you're working.  You'll probably travel more, but you'll also spend less on gas because there's no commute. You'll probably eat in more, but spend more on entertainment.  Try to imagine how you're going to spend your time when you're retired.  This will also help you transition when the time comes due.