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> We always want more and are never satisfied. That's called the hedonic threadmill. People really should have more self control, live frugally, and become fi

> We always want more and are never satisfied. That's called the hedonic threadmill. People really should have more self control, live frugally, and become financially independent early. Most developers in the US could retire after just 10 years. Why don't more of them do that is a mystery.

BOOSTERHIDROGEN 9y ago
How did you arrive the calculation? Care to explain
- shoo 9y ago
  Probably something along these lines: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim... have a play with "networthify" calculator. E.g. hold expenses to 25k / year or less, have income net of tax of 70k and put the surplus into investments that give around 4-5% return after inflation. Repeat for 10 years then retire. keep expenses low in retirement. Luck also helps: this probably assumes you and your family aren't struck by serious medical problems that wipe out savings.
- miguelrochefort 9y ago
  Assumptions: - You're financially independent once you saved 25 times your yearly cost of living - You earn $150,000/year - You can live on $25,000/year Calculations: - Earn $150,000/year - Pay 40% income tax ($95,000 left) - Spend $25,000 ($70,000 left) - Save $70,000 - Repeat for 10 years (save $700,000) - $700,000 > 25 years * $25,000 = $625,000 These numbers are very conservative, and assume no raise in salary, no interest on savings, no tax deduction or 401k matching, and a is achievable in just 9 years. The key is to live frugally, and the US makes that super easy. To give you some perspective, I earn about $25,000 USD (after income taxes) as a full-time software developer in Canada.
  - icebraining 9y ago
    That doesn't seem conservative at all. I very much doubt the average US developer is making $150k/year for the first ten years of their career. Maybe in some places, but those are also the same where the rent will eat more than half of those $25k.
    - miguelrochefort 9y ago
      It also works if you earn $100,000 and spend $20,000. - $100,000 - $60,000 (40% tax) - $40,000 ($20,000 spending) - $500,000 (10 years of savings at 4% interest rate)
  - BOOSTERHIDROGEN 9y ago
    how hard is for you to live frugally for 10 years and what is your perspective after those 10 years.
    - miguelrochefort 9y ago
      I live on less than $20,000/year, and will continue until I'm financially independent. This is not difficult, if you're rational and don't seek luxury. I sleep on the floor, eat once a day, only buy things on sale and in bulk, choose free entertainment, live in a single room, don't own a car, dumpster dive, etc. Once I'm financially independent, I'll finally be able to do research (which I can't at the moment since I lack a degree).

BOOSTERHIDROGEN 9y ago

How did you arrive the calculation? Care to explain

shoo 9y ago
Probably something along these lines: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim... have a play with "networthify" calculator. E.g. hold expenses to 25k / year or less, have income net of tax of 70k and put the surplus into investments that give around 4-5% return after inflation. Repeat for 10 years then retire. keep expenses low in retirement. Luck also helps: this probably assumes you and your family aren't struck by serious medical problems that wipe out savings.
miguelrochefort 9y ago
Assumptions: - You're financially independent once you saved 25 times your yearly cost of living - You earn $150,000/year - You can live on $25,000/year Calculations: - Earn $150,000/year - Pay 40% income tax ($95,000 left) - Spend $25,000 ($70,000 left) - Save $70,000 - Repeat for 10 years (save $700,000) - $700,000 > 25 years * $25,000 = $625,000 These numbers are very conservative, and assume no raise in salary, no interest on savings, no tax deduction or 401k matching, and a is achievable in just 9 years. The key is to live frugally, and the US makes that super easy. To give you some perspective, I earn about $25,000 USD (after income taxes) as a full-time software developer in Canada.
- icebraining 9y ago
  That doesn't seem conservative at all. I very much doubt the average US developer is making $150k/year for the first ten years of their career. Maybe in some places, but those are also the same where the rent will eat more than half of those $25k.
  - miguelrochefort 9y ago
    It also works if you earn $100,000 and spend $20,000. - $100,000 - $60,000 (40% tax) - $40,000 ($20,000 spending) - $500,000 (10 years of savings at 4% interest rate)
- BOOSTERHIDROGEN 9y ago
  how hard is for you to live frugally for 10 years and what is your perspective after those 10 years.
  - miguelrochefort 9y ago
    I live on less than $20,000/year, and will continue until I'm financially independent. This is not difficult, if you're rational and don't seek luxury. I sleep on the floor, eat once a day, only buy things on sale and in bulk, choose free entertainment, live in a single room, don't own a car, dumpster dive, etc. Once I'm financially independent, I'll finally be able to do research (which I can't at the moment since I lack a degree).