grenzbegriff

Life could go anywhere -- this is just my current plan. It has been my plan since I started working 2.5 years ago, but it may change.

If I meet someone, who knows. :)

But I am happy already, while I'm single and don't own a house. I also don't assume that it's necessary to own a house when one is married. The hypothetical We could decide whether it's worth trading 2-3 more years of work to buy a house. Maybe it would be, maybe not. The key is to consider the options, and not just assume you have to do what everyone else does.

Jach's reply explains some of the logic. Basically if you can live on $X per year, then once you have $X * 25 invested, you can most likely live on the interest from that investment for the rest of your life without using it up.

Here's an article shows the math: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...

In my case I'm saving between 80-85% of my after-tax income, which is how I can "retire" after between 4-5.5 years of work.

Two ways to achieve this are to increase your income or to reduce your spending. Ideally both. Reducing spending generally means your life has less impact on the environment, you'll be happier.

It's key to realize that money you save and invest earns more money for you, forever. A useful heuristic here is that if you can save $X per month, after 10 years of doing that you'll have $X * 173 in the bank. So suppose I currently buy lunch every work day for average of $10, if I instead pack a lunch that costs me $1, I'll save $200 / month. Over 10 years this adds up to $34000.

Once you start thinking this way, it's easier to be excited about cutting your spending. And then you find that you can live and be happy on a much smaller amount of money than you thought. So not only do you build up your savings a lot faster, you actually need a lot less savings to be financially independent.

It's enough for me to live the way I live right now, indefinitely. I currently live in silicon valley paying very high rent ($1100/mo). If I didn't want to work I could live somewhere a lot cheaper.

"Retirement" means different things to different people. I was talking about financial independence, which means I can choose to retire, but more likely it will mean I find work I enjoy more, without considering the pay as much.

There are some risks, nothing is guaranteed: - I could have health problems that cost me too much even with health insurance - The market could crash and never recover

But if the market crashes and doesn't recover, maybe I'd have to go back to work for a while. Health problems are a risk for everyone, and no amount of money is going to guarantee good health. However, I bet that leaving the office job early will reduce the risk of health problems overall anyway.

I put almost all of my savings into total stock market index funds. I use Vanguard so the expense ratio is 0.05%. Dividends are automatically reinvested so I don't have to worry about that -- from my perspective dividends look no different than the fund's value going up.

Here are some resources that explain why to do this and how:

https://www.reddit.com/r/personalfinance/wiki/investing

http://www.mrmoneymustache.com/2011/05/18/how-to-make-money-...

There are endless ways to diversify. For example, my portfolio is "diversified" across all stocks. But the entire stock market goes up and down, so some people diversify by putting a percentage of their savings in something else, like bonds or money market funds. These tend to have lower historical average returns than the stock market, but they won't necessarily go up and down at the same time so your savings will not fluctuate as much.

I haven't looked into paying less taxes, aside from maxing my 401k.

I expect to have $500k by 27. No, I don't have a house, I split an apartment with a roommate close to work so I have a very short commute.

I'm happy for you! Having the option of retiring at 35, and being happy in the time until then, is a sweet deal. :)

Yes just index funds, making about $200k/year pretax if I count salary+stock+bonus+401k match.

I'll admit, not everyone makes $200k this early. But most people could be financially independent much sooner than they think if they realized that spending doesn't make them happier and started saving instead -- so I suggest this when I get the chance. :)

Lots of people have no idea where their money is going because they don't track spending.

Thanks :)

43 still gives you about 20 more years than most people to do something other than earning money to spend! Imagine what you'll get to do with that kind of time.

I love hearing from other people who have a similar plan.

And of course I'll suggest you could be independent sooner if you reduce some spending. ;) But that's your tradeoff to consider.

I think about the same things and ask the same question.

My current plan is to save most of my money so I can reach financial independence very early. I'm 25 now, I'll be financially independent by 27, meaning I'll have enough money invested to live indefinitely on interest/dividends. My total expenses/spending is $25k/year and I'm sure I can keep them there if I want to. Most people who start making a silicon valley software engineer salary right out of college could be financially independent by 30 if they wanted to. It's just a math equation of spending, income, and compound interest that most people have never considered. (If anyone doesn't get how this works, I can explain.)

Once I'm financially independent, I no longer have to worry about money for myself, so I can fully commit to finding a better way to use my time. This will probably mean meeting and talking to lots of people who are doing stuff in the world and looking for an opportunity that I'm excited about helping with, and that's a good fit for my skills. This might mean writing more code or it might not, I can learn new things too. I might come to the conclusion that continuing to be a software engineer making a silicon valley salary, living frugally and donating all my extra money is the most beneficial thing I can do, but I wouldn't be surprised if I find something better.

Meanwhile, while I'm working and saving all this money, I get to be an example of someone who is frugal, healthy, happy, and incredibly excited about and enjoying life, to my friends and anyone I meet. I can inspire other people who are in similar circumstances to myself, to reduce their spending and resource consumption while still being happy. Demonstrating to people that sustainable happy lives are possible and much more fun than "normal" consumerism/consumption is something I'm really excited about.