If your savings rate is 25%, you can retire in years. Safely, meaning you will never run out of money. If your savings rate is 10%, you will be able to safely retire after years. For this, let’s assume your annual investment return is 5% (which is conservatively low) and your withdrawal rate is 4%… meaning you spend 4% of your net worth each year.įor example, if you have a $1,000,000 net worth, and you live on $40,000. Between 0% and 100% are a number of savings rates that correlate with the years it will take to retire. If you spend 0% of your income, you can retire right now… because somehow you are living without needing to make any more money. If you spend 100% of your income, you will never retire… because you will never be able to invest any money that earns money for retirement. The most important concept is knowing your savings rate, basically how much you make minus your expenses. Let’s break it down further to know when you can retire. As soon as your investments earn enough money for you to live on each year, you are able to retire. This could be investing in stocks or bonds, real estate, or any other of investment vehicles. You need to invest money so that it earns more money. While the ability to retire may seem like a distant and unreachable goal for many, the premise comes down to one thing. In this first video, I want to explain the shockingly simple math behind early retirement – thanks to one of my biggest heroes, Mr Money Mustache. In a world where people’s finances are typically locked away and not-talked about, I believe opening up the gates of financial conversation will help everyone live a better and smarter life. Because of that, I want to create a series of videos that breaks down some of the most mystifying topics that plague our society.
I’m a video creator and online instructor.
HE SHOCKINGLY SIMPLE MATH BEHIND EARLY RETIREMENT HOW TO
How to Retire Early: The Shockingly Simple Math user 0 Comments DecemRetire Wealthy
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