![]() If you save 10% of your income, you can retire in 51 years If you save 5% of your income, you can retire in 62 years When can you retire if you save 50% of your income? You can cut your working years down to 17 if you save 50% of your income. But many people in the FIRE community have a saving rate of 50% or more by spending intentionally and finding additional ways to increase their income. Of course, there are people who fit in that category. The FIRE movement often gets a bad reputation of being a group of people who obsessively save and rob themselves of all joy, just to get to retirement. They’re striving to have a saving rate of 50% or more knowing that each dollar they don’t spend is a dollar that they’re using to buy their life back. The saving rate for the average American currently stands at 8%, which means it’ll take them 56 years to reach retirement.Īnd the harsh reality is, If it takes 56 years to retire, it’s likely you won’t have much of a retirement to enjoy.īut people who want to retire early aren’t average. Our saving rate - the percentage of your income that you save each month - is so low that many of us will never be able to afford to retire, let alone retire early. ![]() It’s well-known that Americans aren’t great savers. And there are only two factors that influence your saving rate: how much you earn and how much you spend. This saving rate is the single biggest predictor of whether you’ll be able to retire early or even retire at all. The lower the saving rate, the more likely it is that you’ll spend decades trying to get there. The higher the savings rate, the quicker you’ll be able to reach financial independence. Someone who makes $80,000 and saves $40,000 has a saving rate of 50%. Someone living paycheck to paycheck has a saving rate of 0%. It’s a powerful metric that can give you insight into whether you’re on the fast track or the slow road to retirement. Your saving rate is the amount of money you have remaining after spending money on taxes and other life expenses. Becoming financially independent boils down to two main steps: It’s not about making lots of money, it’s about being responsible with the money you have now. There are no tricks, no secrets, and no need to be a personal finance pro. Reaching financial independence isn’t complex. Becoming financially independent isn’t complicated. ![]() Yes, there’s a good chance FIRE is in your future if you want it to be. Travel the world, hang out with your kids, or do whatever it is that sets your soul on fire? Wake up weekday mornings choosing what you want to do rather than suffering through yet another commute? Now that you know what FIRE is and why there is a growing movement of people who are aspiring to reach FIRE - or who have already succeeded - you might start wondering if this is something you could achieve.Ĭould you actually save enough money to leave your job?
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