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Is your radical savings plan based on fantasy?

Started by Sam, November 06, 2018, 11:11:45 AM

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Bloomberg and the WSJ recently had some opinion pieces it he radical savings is based on fantasy.

My "radical savings plan" of saving 50% of my income and living in a studio with another dude was based off NECCESSITY. I needed to save a lot to give me options to escape a brutal job that required 12-14 hour days.

How about you?





From day one, my wife TOLD me before we bought the house that we needed to live on one income in case one is out of a job and we needed to save 50% of our income. In recent years, we saved over 85% before my wife age 51 was laidoff in 2016.

We have seen our parents struggled over money. Since my wife and I worry too much, we have passive income 3x current expenses from munis, pensions and interest from our 401Ks.

Lean fire may work for some people but having a min of 5 million is more financially secure for us.



You picked a winner there. Smart lady. Give that girl a high five.


Quote from: Orphan on November 06, 2018, 03:00:09 PM
You picked a winner there. Smart lady. Give that girl a high five.

:) Thanks! She was happy to hear that!  :)


50% was achieved by simply holding back on any lifestyle inflation and progressing up the career ladder over the past 15 years.

When we first started, our overall spending included mortgages, car payments, student loans, and credit cards.  In 2003, when I was in heavy debt, I promised myself that we'd pay off all debt.  Once credit cards were paid off, we worked on our car payments, then afterward our student loans, then our second mortgage, and then our first mortgage.  All in, our annual budget was closer to $100k, but without debt, it dropped down to $60k.

During those 15 years, I've had a number of promotions and was very lucky to have significant stock options.  With the excess, I've been investing in generating passive income. 

Now, my passive income has surpassed my annual budget, so I guess technically, I'm saving 100% of my income.  I just think the best way is to pick a good livable target spending amount and work your butt off on your career and a 50% savings rate is reasonable.


QuoteThe biggest issue with the FIRE movement is that it's the ultimate bull market phenomenon. FIRE seems to work because the stock market has gone straight up. A bear market will change that. Even if stocks do return 8 percent to 12 percent over time, it's not going to be any fun living on a shoestring budget and watching your nest egg decline

According to Jack Bogle stock market will return only 4% (see So FI might be harder to achieve since returns will drop.

QuoteThere are positive aspects to the FIRE movement. It has got people thinking about saving and long-term investing in a productive, positive way. That definitely is not a bad thing, but saving and investing should be for the purpose of future consumption or for charitable contributions, not so you don't have to set your alarm clock.

It's clear the author is someone who likes to spend their hard earn cash eventually instead of saving indefinitely for FI.