6 ms·

Something I've thought about lately is that money in itself is rarely the end we really have in mind, despite our focus on it. Money is usually the means to ach

Something I've thought about lately is that money in itself is rarely the end we really have in mind, despite our focus on it. Money is usually the means to achieve some end (like financial security). But more often than not I've realized that while all of my friends are working toward this idea of financial security, very few of them have defined what that actually means. What lifestyle do you want to lead and how much money will that specifically require? The more I've thought about that, the more I've realized that "financial security" is actually achievable on a fast timescale if we're willing to focus on things like budgeting and perhaps relax some constraints (I want to have a boat, nice car, live in California/NYC, etc). The things that make me the happiest are having fun (which doesn't require much) and spending time with my family. I could easily find a way to do that indefinitely without needing a post-IPO payday. Now I'm left wondering where I got the crazy idea that I needed one in the first place.

brookside 7y ago
> how much money will that specifically require? A general rule of many in the "financial independence" is 20x annual expenses saved for a sustained life without work. https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ https://www.mrmoneymustache.com/2012/01/13/the-shockingly-si... You sound like a burgeoning F.I.R.E'r. Join us!
- ivalm 7y ago
  Doesnt 20x suggest a 5% withdrawal rate? The oft quoted safe withdrawal is 4% (25x) with conservative being 3% (33x)...
  - brookside 7y ago
    Yes actually, my mistake.
- robocat 7y ago
  The big caveat for this is that it assumes your expenses are flat over your lifetime, and the idea is to drive down your expenses, and can then be happy with your reduced expenses. It does make some sense, but the simplification sort of drives you in the wrong direction IMHO. FIRE stands for “Financial Independence Retire Early” (I think it is a good practice to explain acronyms, since those you are trying to inform are the least likely to recognise the acronyms you use!)
samvher 7y ago
It’a amazing how much more freedom of choice you get if you limit your spending to necessities. You can choose only jobs that you enjoy, work part time, take sabbaticals, save money/retire early... I honestly think reducing your standard of living can be one of the best ways to improve your quality of life.
yodsanklai 7y ago
It's not clear what is financial security. Many things can go wrong (financial crisis, health problems). If we can earn some money now, maybe we should take it because our skills may not be worth much in a few years. Money is also used to measure success, and this can have a huge impact on our self-esteem and happiness. It's very common that people choose a lucrative career simply to please their parents, and this makes them happy in return, even though their aren't materialistic.
- katzgrau 7y ago
  > Many things can go wrong (financial crisis, health problems). A developed (personal) definition of financial security should take that into account. You can't control all uncertainty but there are certainly things you can control for. > It's very common that people choose a lucrative career simply to please their parents, and this makes them happy Kind of irrelevant. And I personally don't think you should be making major lifestyle choices simply to please one's parents (perhaps a western view), but to each his own.

brookside 7y ago

> how much money will that specifically require? A general rule of many in the "financial independence" is 20x annual expenses saved for a sustained life without work. https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ https://www.mrmoneymustache.com/2012/01/13/the-shockingly-si... You sound like a burgeoning F.I.R.E'r. Join us!

ivalm 7y ago
Doesnt 20x suggest a 5% withdrawal rate? The oft quoted safe withdrawal is 4% (25x) with conservative being 3% (33x)...
- brookside 7y ago
  Yes actually, my mistake.
robocat 7y ago
The big caveat for this is that it assumes your expenses are flat over your lifetime, and the idea is to drive down your expenses, and can then be happy with your reduced expenses. It does make some sense, but the simplification sort of drives you in the wrong direction IMHO. FIRE stands for “Financial Independence Retire Early” (I think it is a good practice to explain acronyms, since those you are trying to inform are the least likely to recognise the acronyms you use!)

samvher 7y ago

It’a amazing how much more freedom of choice you get if you limit your spending to necessities. You can choose only jobs that you enjoy, work part time, take sabbaticals, save money/retire early... I honestly think reducing your standard of living can be one of the best ways to improve your quality of life.

yodsanklai 7y ago

It's not clear what is financial security. Many things can go wrong (financial crisis, health problems). If we can earn some money now, maybe we should take it because our skills may not be worth much in a few years. Money is also used to measure success, and this can have a huge impact on our self-esteem and happiness. It's very common that people choose a lucrative career simply to please their parents, and this makes them happy in return, even though their aren't materialistic.

katzgrau 7y ago
> Many things can go wrong (financial crisis, health problems). A developed (personal) definition of financial security should take that into account. You can't control all uncertainty but there are certainly things you can control for. > It's very common that people choose a lucrative career simply to please their parents, and this makes them happy Kind of irrelevant. And I personally don't think you should be making major lifestyle choices simply to please one's parents (perhaps a western view), but to each his own.