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Came here to agree with you and also add that while I've never heard of this movement over here in Europe I do know of a certain type of loosely based community

Came here to agree with you and also add that while I've never heard of this movement over here in Europe I do know of a certain type of loosely based community of blogs, forums and people who invest hundreds of dollars each month into stock. Special stock (I'm at a loss of english financial terms here) that give off a certain percentage of value back to you each year or month. So the goal is the same, once you own enough of these stock you're supposed to live off the accumulated winnings from them. And of course these stock can be sold off too if you want to free some money. Or if the company announces that they're going to lower their percentage of value that they give out. I've been doing this for a couple of years now, started late compared to my peers. I'm a slacker and so far haven't calculated much of anything. Simply jumped on a bandwagon, read some blog posts and got started. But a co-worker who tipped me off to this "movement" claims he's calculated that he will be able to live off his return in 10 years. This all depends on how much you're putting into your stock each month of course. Personally I buffer money and only buy stock every 3-4 months. The trick is to find old well established businesses whose stock has been stable for many years, many of them fluctuate up and down over decades. New companies do not tend to give off this return. I don't know the details but only certain companies give a return on their stock just by owning them. My stock trading app shows this info when you click on a stock. Once you've bought into some company you might get a letter home saying that they're going to lower or raise the return depending on how well they're doing.

jamornh 8y ago
I believe you are referring to dividend investing? Investing in a portfolio of stocks that pay higher than average dividends. I'm not an expert in this, but dividend stocks don't normally have as high of a growth potential so the math may be different. Usually when the FIRE community refers to investing, they usually refer to an index fund that includes either the S&P500 or global stock index so you can track the movement of the broader economy and count on the economy growing year over year. With dividend investing, it's not really the same thing and the math likely won't work out the same.
- FabHK 8y ago
  Also, depending on your jurisdiction, you pay taxes on dividends. So, it makes sense (while you earn) to invest in shares or funds that don't give you income (they pay dividends that you have to pay tax on), but capital gains (they increase in value, but you don't have to pay tax on that until you realise the gain, ie sell). Once you're retired, you can switch from a capital growth portfolio to an income providing portfolio.

jamornh 8y ago

I believe you are referring to dividend investing? Investing in a portfolio of stocks that pay higher than average dividends. I'm not an expert in this, but dividend stocks don't normally have as high of a growth potential so the math may be different. Usually when the FIRE community refers to investing, they usually refer to an index fund that includes either the S&P500 or global stock index so you can track the movement of the broader economy and count on the economy growing year over year. With dividend investing, it's not really the same thing and the math likely won't work out the same.

FabHK 8y ago
Also, depending on your jurisdiction, you pay taxes on dividends. So, it makes sense (while you earn) to invest in shares or funds that don't give you income (they pay dividends that you have to pay tax on), but capital gains (they increase in value, but you don't have to pay tax on that until you realise the gain, ie sell). Once you're retired, you can switch from a capital growth portfolio to an income providing portfolio.