It means you can tell your boss, 'fuck you' I don't want to do that. I quit! This is the biggest and greatest fuck you of them all. What if you could just plug in some numbers and when the numbers were correct, you could march down the hall and say hey boss, "fuck you". Well hopefully we're on the brink!
Editor: Crass Cash Over the past few days I've been obsessed with the thought of quantifying what "fuck you money" is. Just in case you don't know, "fuck you money" is when you have enough so that you can tell anyone and everyone "fuck you" I don't want to. Of course this doesn't pertain to cops or the IRS because they don't give a shit.
It means you can tell your boss, 'fuck you' I don't want to do that. I quit! This is the biggest and greatest fuck you of them all. What if you could just plug in some numbers and when the numbers were correct, you could march down the hall and say hey boss, "fuck you". Well hopefully we're on the brink!
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Editor: Crass Cash When looking to retire extremely early look at cash flow not assets. You can look at assets to compare the rate of return but as my step dad says, "The utility company doesn't care about what your net worth is."
Have a goal of income from investments and strive for that. When it surpasses your expenses, you're free! It would also help to have some extra cushion depending upon if there's a disturbance in the cash flow like for instance the rent checks stop coming in or the stocks you own lower their dividends. Understand? Have a wide MARGIN OF SAFETY! Editor: Crass Cash For those of you who want to retire in your 30's and even 20's there are some specific problems that you need to think about. You need to think more in regards to cash flow rather than assets, but you still need to think about both.
If you max out retirement accounts like I do you need to be aware that you won't have access to that money until you're 59.5 years old, unless you want to pay a penalty. That's a problem if you want to retire 20 years before that. This money is great to build, but it's almost like Social Security, you can't really factor it in yet. As a result you need to think in terms of cash flow. What are your expenses and what does your revenue need to be? And as a result where will my revenue come from and how stable will it be? To use myself as an example. I generally spend on average about $3,000 a month on everything. When the mortgage is paid off it'll drop to a little over $2,100 a month. As a result I would need to find a way to make $3,000 off of my investments each month in order to sustain my lifestyle. Also, I would need to make sure that those investments increase enough each year to keep up with future inflation. (Hint: the less you spend the less inflation will impact you.) Another way to think about this is that you need anywhere from 25 to 33 times your yearly expenses in investable cash generating assets. That's a big range in numbers, so think about it like this. If you've got it all in stocks yielding 3% you're going to need 33 times your expenses. If you've got it in real estate yielding 6% you're going to need far less. If you've got it all in CD's yielding 1%, you're fucked! So me for instance, I would need some where in the range of $900,000 to $1,180,000. In all the calculations from all the different scenarios I've run I keep coming up with a very conservative figure of $1,100,000 net worth figure. As a result that's what I'm shooting for. Interestingly I already have the cash flow now to sustain my lifestyle, but it's really close and I don't want to risk something major in the event of a serious emergency. Paying off the mortgage would make a huge dint into what I need each month. It would drop what I needed from $1,180,000 to around $832,000, which comes to about 4-5 years worth of additional savings. It would be a drop in the bucket to pay it off in 25 years when the IRA funds become eligible without penalty, but by then it'll be paid off. See the types of problems that you need to think about when you plan to retire extremely early? |
AuthorThis website was created due to the atrociously misguided financial advice that I've heard over the decades. Financial freedom is not intellectually strenuous, but it takes discipline. Categories
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