6 ms·

Yeah there is a lot of space between "has savings for 8-12 months" and "is independently wealthy, i.e. can live off interest of their own savings". Former is ex

by est31 4y ago

Yeah there is a lot of space between "has savings for 8-12 months" and "is independently wealthy, i.e. can live off interest of their own savings". Former is extremely easy to achieve if you can save significant portions of your salary. If you can save 30%, you can achieve it after 3 years. Latter takes a bit longer.

ummonk 4y ago
Less than 3 years, since your expenses are only 70% of your salary.
- est31 4y ago
  Good point, I've just calculated it and you'll need 2 years and 4 months to save one year's expenses that make up 70% of your salary, at a saving rate of 30%.
  - klipt 4y ago
    But then inflation...
300bps 4y ago
Yeah there is a lot of space between "has savings for 8-12 months" I think there is a mentality difference here. I have savings that would easily last me 10 years of not working. But... that's kind of my plan. I will be retiring some day. I don't want to use up even a dime of that money by not working in my prime earning years.
- VBprogrammer 4y ago
  The other side of that coin is that saving for a post work life (particularly at normal retirement age) is a good way of spending all of your life working hard for a retirement which never comes. There is something to be said for spreading those retirement years across your lifetime rather than saving them all up for the end. Different of course if you have a plan to retire at 45 or something.
- rootusrootus 4y ago
  A good friend of mine spent his life being pretty frugal. Saved up a nice chunk of change, too -- his wife is also a software developer, they both made good money. Got cancer early last year and was dead 10 months later. 55 years old. Ugh. Not saying you should run out and spend your nest egg. On the other hand, I'd be reluctant to suffer too much during my prime working years scrimping and saving for a retirement that might actually not happen. I'd rather have jobs I really enjoy, and frankly, if I enjoy the work well enough why would I retire? Just take longer and longer vacations and work part time. So I'm willing to use a bit of my saved up funds when necessary to get out of a work environment that is unpleasant.
  - ryandrake 4y ago
    Sorry about your friend. My wife also had a friend in the same boat. Made it to 59 and heart attack. Statistically they are outliers, though. For every one of those cases there are probably 10 that make it long past a normal retirement age and 2 that make it beyond 90 years or so. Given the choice, I’d rather be prepared for a 30 year retirement and unluckily die early than be prepared for a 5 year retirement and live to see 90, eating dog food.
    - VBprogrammer 4y ago
      You can live a long time with a very low quality of life. It's not just dying that the concern. I don't think we're really talking here about not having enough money to survive in retirement, we're saving to have the dream retirement later.
    - rootusrootus 4y ago
      Right, I wouldn't advocate spending it all. Just a bit of moderation. It does help that by the time you're within 10 or 15 years of retirement you should mostly not need big contributions to investments, the interest ought to be doing the heavy lifting. Doesn't always work out that way of course.
  - LouisSayers 4y ago
    There's definitely something in not putting off the things you really want. My sister's landlord always told her how he planned to live in the house she's in once he was a bit older. He ended up dying in a motorbike accident a few months ago, right after a house inspection...
- Jach 4y ago
  It is largely mentality. Both for the initial plan and execution of saving up (and trying to do it fast, e.g. in 5-10 years) and then pulling the trigger and quitting. I pulled the trigger in late 2020 based on somewhat optimistic forecasting (more than the 4%/5% rule of thumb) that I might have enough for it to be indefinite at steady expense levels. TBH rocky markets this year have had me feeling like it'd be nice to have a steady income instead of only outcome (and I should have bought property/gotten a low interest mortgage on something before quitting) but the feeling hasn't been strong enough to make me actually take any steps towards that, and anyway dollar-wise I'm still overall above where I was when I quit. I don't really know if I'll "never work again" (unless forced, and there are several forcing functions I can imagine apart from the market performing much more poorly than expected) but I can easily see myself enjoying the rest of this decade not working, maybe dabbling in some side income gigs eventually, and only getting back into full time employment stuff if I really want to in my 40s. As a man in a knowledge field my "prime earning years" are probably in my 40s-50s anyway, while until aging is solved my physical body's not getting younger. I wonder what sorts of things influence the mentality. I've been reading Walden here and there recently, I remember being forced to read some of it in I think junior high, I suspect at least a little influence lies there but there's no better trick to make kids dismiss a book's messaging than to force them to read it in chunks via some textbook and then be quizzed. "The mass of men lead lives of quiet desperation." "This spending of the best part of one's life earning money in order to enjoy a questionable liberty during the least valuable part of it, reminds me of the Englishman who went to India to make a fortune first, in order that he might return to England and live the life of a poet." "Yet some, not wise, go to the other side of the globe, to barbarous and unhealthy regions, and devote themselves to trade for ten or twenty years, in order that they may live -- that is, keep comfortably warm -- and die in New England at last. The luxuriously rich are not simply kept comfortably warm, but unnaturally hot; as I implied before, they are cooked, of course à la mode." Of course by Thoreau's standards I'm positively roasting and happy about it, and I think 10 or even 20 years at a career is more than a fine tradeoff if that's all it takes to secure a retirement. As a teen I remember thinking I'd be happy enough to avoid having worked for 40-ish years straight like most of the adults around me had done/were doing (some of whom died right before or after their retirement age goal, too).
  - 4y ago
sokoloff 4y ago
https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ https://www.mrmoneymustache.com/2012/01/13/the-shockingly-si... is a great article for those interested in the topic of high savings percentages.
- jxhdkdhdks 4y ago
  never mind that anyone following mr money mustache advice to date, would be under water and strugling more than people that just saved in safer assets all that while.
  - sokoloff 4y ago
    Not if you’ve been following that advice for more than 3 years. The broad market is around the same price as 18 months ago.
    - icedchai 4y ago
      Yup. I'm basically back to early 2021 levels, still up almost 60% since things bottomed out in March/April 2020. The big drops seem concerning in the short term, but if you look at it over the long term... well... I'm not too worried.
brailsafe 4y ago
I've always had an extremely tenous grasp on consistently being employed, and know getting fired is just around the corner. Therefore, saving about 6-12 months of expenses is first step, then I'm allowed to start spending more than $100/m or whatever here and there on stuff. I usually end up needing that savings because getting a new job can easily take that long, and so by the beginning of age 30 this year I was back in the negative and almost homeless again with no real assets. That strategy keeps lifestyle inflation way down
- hcrean 4y ago
  Are you choosing the right environments to work in? What do you find is the reason for instability in employment?
  - brailsafe 4y ago
    Variety of reasons, burnout, management style changing or expectations changing in a way that I can't keep up, I guess those are the usual ones and they're closely related. Most companies also just arbitrarily pick 2 week agile sprints with daily stand-ups, often increasing the amount of meetings as time goes on, and this is usually where things start going downward for me. There also tends to be a decrease in autonomy to get my work done over time, which helps me feel like shit on a daily basis, and so it starts a negative spiral. In one case I was doing reasonably well with my software dev tasks for a while, but then they assigned me to periodic customer support, and I said up front that's not something I'll be good at. At the same time, my manager tried to increase the oversight of my work, because I was getting slower at it. So I'd wake up every waiting for my manager to "check-in" on me like a child, eventually getting to the point where I couldn't bring myself to get anything done and just resented my existence. I'm in an ok spot now, for now, but who's to say how it'll be by January. All I want is a place I can do good work for, for a reasonable salary, but it's been very difficult to find.
    - inadequatespace 4y ago
      Damn, I’ve been there — at least in the situation where the manager concludes that micromanaging will somehow make the managee more effective, rather than in the very best case, hamstring it by bottlenecking on them and in the average case, deeply humiliate by trying to make the managee do things exactly the way they would (but be worse at it, because the managee is not them and could have their own different, personalized, effective work style).
userulluipeste 4y ago
There's a lot of range of what constitutes "independently wealthy, i.e. can live off interest of their own savings" when one gets there. Say, you may live a single life of relative leisure for the rest of your days, but if you plan to start a family and have kids (with all it implies) - nope, you'll still have to get back to work! Or want to live large and not have to worry that much about material side of life (i.e. when money is just for keeping score)? Well, you'd better find out ways to make most of your current financial independence to get there, which in itself is work (although just investment related kind, but still).

by est31 4y ago

ummonk 4y ago

Less than 3 years, since your expenses are only 70% of your salary.

est31 4y ago
Good point, I've just calculated it and you'll need 2 years and 4 months to save one year's expenses that make up 70% of your salary, at a saving rate of 30%.
- klipt 4y ago
  But then inflation...

300bps 4y ago

Yeah there is a lot of space between "has savings for 8-12 months" I think there is a mentality difference here. I have savings that would easily last me 10 years of not working. But... that's kind of my plan. I will be retiring some day. I don't want to use up even a dime of that money by not working in my prime earning years.

VBprogrammer 4y ago
The other side of that coin is that saving for a post work life (particularly at normal retirement age) is a good way of spending all of your life working hard for a retirement which never comes. There is something to be said for spreading those retirement years across your lifetime rather than saving them all up for the end. Different of course if you have a plan to retire at 45 or something.
rootusrootus 4y ago
A good friend of mine spent his life being pretty frugal. Saved up a nice chunk of change, too -- his wife is also a software developer, they both made good money. Got cancer early last year and was dead 10 months later. 55 years old. Ugh. Not saying you should run out and spend your nest egg. On the other hand, I'd be reluctant to suffer too much during my prime working years scrimping and saving for a retirement that might actually not happen. I'd rather have jobs I really enjoy, and frankly, if I enjoy the work well enough why would I retire? Just take longer and longer vacations and work part time. So I'm willing to use a bit of my saved up funds when necessary to get out of a work environment that is unpleasant.
- ryandrake 4y ago
  Sorry about your friend. My wife also had a friend in the same boat. Made it to 59 and heart attack. Statistically they are outliers, though. For every one of those cases there are probably 10 that make it long past a normal retirement age and 2 that make it beyond 90 years or so. Given the choice, I’d rather be prepared for a 30 year retirement and unluckily die early than be prepared for a 5 year retirement and live to see 90, eating dog food.
  - VBprogrammer 4y ago
    You can live a long time with a very low quality of life. It's not just dying that the concern. I don't think we're really talking here about not having enough money to survive in retirement, we're saving to have the dream retirement later.
  - rootusrootus 4y ago
    Right, I wouldn't advocate spending it all. Just a bit of moderation. It does help that by the time you're within 10 or 15 years of retirement you should mostly not need big contributions to investments, the interest ought to be doing the heavy lifting. Doesn't always work out that way of course.
- LouisSayers 4y ago
  There's definitely something in not putting off the things you really want. My sister's landlord always told her how he planned to live in the house she's in once he was a bit older. He ended up dying in a motorbike accident a few months ago, right after a house inspection...
Jach 4y ago
It is largely mentality. Both for the initial plan and execution of saving up (and trying to do it fast, e.g. in 5-10 years) and then pulling the trigger and quitting. I pulled the trigger in late 2020 based on somewhat optimistic forecasting (more than the 4%/5% rule of thumb) that I might have enough for it to be indefinite at steady expense levels. TBH rocky markets this year have had me feeling like it'd be nice to have a steady income instead of only outcome (and I should have bought property/gotten a low interest mortgage on something before quitting) but the feeling hasn't been strong enough to make me actually take any steps towards that, and anyway dollar-wise I'm still overall above where I was when I quit. I don't really know if I'll "never work again" (unless forced, and there are several forcing functions I can imagine apart from the market performing much more poorly than expected) but I can easily see myself enjoying the rest of this decade not working, maybe dabbling in some side income gigs eventually, and only getting back into full time employment stuff if I really want to in my 40s. As a man in a knowledge field my "prime earning years" are probably in my 40s-50s anyway, while until aging is solved my physical body's not getting younger. I wonder what sorts of things influence the mentality. I've been reading Walden here and there recently, I remember being forced to read some of it in I think junior high, I suspect at least a little influence lies there but there's no better trick to make kids dismiss a book's messaging than to force them to read it in chunks via some textbook and then be quizzed. "The mass of men lead lives of quiet desperation." "This spending of the best part of one's life earning money in order to enjoy a questionable liberty during the least valuable part of it, reminds me of the Englishman who went to India to make a fortune first, in order that he might return to England and live the life of a poet." "Yet some, not wise, go to the other side of the globe, to barbarous and unhealthy regions, and devote themselves to trade for ten or twenty years, in order that they may live -- that is, keep comfortably warm -- and die in New England at last. The luxuriously rich are not simply kept comfortably warm, but unnaturally hot; as I implied before, they are cooked, of course à la mode." Of course by Thoreau's standards I'm positively roasting and happy about it, and I think 10 or even 20 years at a career is more than a fine tradeoff if that's all it takes to secure a retirement. As a teen I remember thinking I'd be happy enough to avoid having worked for 40-ish years straight like most of the adults around me had done/were doing (some of whom died right before or after their retirement age goal, too).
- 4y ago

sokoloff 4y ago

https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ https://www.mrmoneymustache.com/2012/01/13/the-shockingly-si... is a great article for those interested in the topic of high savings percentages.

jxhdkdhdks 4y ago
never mind that anyone following mr money mustache advice to date, would be under water and strugling more than people that just saved in safer assets all that while.
- sokoloff 4y ago
  Not if you’ve been following that advice for more than 3 years. The broad market is around the same price as 18 months ago.
  - icedchai 4y ago
    Yup. I'm basically back to early 2021 levels, still up almost 60% since things bottomed out in March/April 2020. The big drops seem concerning in the short term, but if you look at it over the long term... well... I'm not too worried.

brailsafe 4y ago

I've always had an extremely tenous grasp on consistently being employed, and know getting fired is just around the corner. Therefore, saving about 6-12 months of expenses is first step, then I'm allowed to start spending more than $100/m or whatever here and there on stuff. I usually end up needing that savings because getting a new job can easily take that long, and so by the beginning of age 30 this year I was back in the negative and almost homeless again with no real assets. That strategy keeps lifestyle inflation way down

hcrean 4y ago
Are you choosing the right environments to work in? What do you find is the reason for instability in employment?
- brailsafe 4y ago
  Variety of reasons, burnout, management style changing or expectations changing in a way that I can't keep up, I guess those are the usual ones and they're closely related. Most companies also just arbitrarily pick 2 week agile sprints with daily stand-ups, often increasing the amount of meetings as time goes on, and this is usually where things start going downward for me. There also tends to be a decrease in autonomy to get my work done over time, which helps me feel like shit on a daily basis, and so it starts a negative spiral. In one case I was doing reasonably well with my software dev tasks for a while, but then they assigned me to periodic customer support, and I said up front that's not something I'll be good at. At the same time, my manager tried to increase the oversight of my work, because I was getting slower at it. So I'd wake up every waiting for my manager to "check-in" on me like a child, eventually getting to the point where I couldn't bring myself to get anything done and just resented my existence. I'm in an ok spot now, for now, but who's to say how it'll be by January. All I want is a place I can do good work for, for a reasonable salary, but it's been very difficult to find.
  - inadequatespace 4y ago
    Damn, I’ve been there — at least in the situation where the manager concludes that micromanaging will somehow make the managee more effective, rather than in the very best case, hamstring it by bottlenecking on them and in the average case, deeply humiliate by trying to make the managee do things exactly the way they would (but be worse at it, because the managee is not them and could have their own different, personalized, effective work style).

userulluipeste 4y ago

There's a lot of range of what constitutes "independently wealthy, i.e. can live off interest of their own savings" when one gets there. Say, you may live a single life of relative leisure for the rest of your days, but if you plan to start a family and have kids (with all it implies) - nope, you'll still have to get back to work! Or want to live large and not have to worry that much about material side of life (i.e. when money is just for keeping score)? Well, you'd better find out ways to make most of your current financial independence to get there, which in itself is work (although just investment related kind, but still).