/Financial Independence General/

TechHater
TechHater

Welcome to the general thread for becoming financially independent of your main income source!
Are you eager to break out of the rat race? Come here to share your tips on saving a large percentage of your income so you can retire far earlier!
Remember the 7% rule! You can only safely withdraw 7 percent of your saving annually. This means that you need to hoard 14.3 times your yearly consumption to become financially independent. When calculating your consumption you should remember that you won't have any work bonuses if you quit your job, so you should consider the cost out of your own pocket.

All urls found in this thread:
https://rawx.io/poll.html
https://www.nerdwallet.com/insurance/compare-car-insurance-rates
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
lostmypassword
lostmypassword

I'm in full support of this, OP.

But I'm curious about where you got the 7% number. Usually people throw around 3-4%

CodeBuns
CodeBuns

this thread has potential

any tips for books to read? aside from these

also what's a good investing amount for daytrade?

Nude_Bikergirl
Nude_Bikergirl

it's "the 4% rule" and you need to hoard 25x your expenses.

Harmless_Venom
Harmless_Venom

where did you get this 7% number if you save 2 million that would only last 15 years ... it's more like 2.5 %

MPmaster
MPmaster

@lostmypassword
@Nude_Bikergirl
@Harmless_Venom

wouldn't 7% of the initial amount work? if you have the rest in compound interest at a aprox. 10% yearly you would actually be increasing your money

or am i wrong? new to all this

askme
askme

@CodeBuns
If these are the books of Veeky Forums why does no one here follow there advice.

The intelligent Investor
Almost half the book is dedicated to ripping on speculation and day trading, thats almost every thread on Veeky Forums. That's all biz is good for.

kizzmybutt
kizzmybutt

@askme
Almost half the book is dedicated to ripping on speculation and day trading, thats almost every thread on Veeky Forums. That's all biz is good for.

Veeky Forums is a shitposting board you idiot

This board is fucking garbage and completely useless.

Poker_Star
Poker_Star

@askme
This entire board just jacks off to meme stocks and cryptos

Deadlyinx
Deadlyinx

OP, you should check out the Trinity Study. It pretty much came to the co conclusion that in 95% of cases historically, 4% will not run out of money in 30 years. 5% is at about 80% success. 7 may work but is risky.

Fantastic thread though. What are your FI numbers? Mine is 750k. 30k/yr @4% to so whatever I want for ever. Would realistically keep working.

Skullbone
Skullbone

@kizzmybutt
Lol you're right but funny enough I owe all my FI success so far to biz, I saw a link here to MMM and that's how I first got on board

Burnblaze
Burnblaze

@Deadlyinx
Would realistically keep working.
this is important if youre seriously considering "financial independence". bad years happen, and these schemes typically dont allow you a savings account.

independence is a meme, breathing room is the key.

WebTool
WebTool

@kizzmybutt
I think it's great, I have a watch list of companies that are trading below liquidation value and then I wait for sites like this to call them "moon stocks".

@kizzmybutt
@Poker_Star
Of course the exception to the list in "one up on wall street" Moon stock is the same thing as Tenbegger.

BunnyJinx
BunnyJinx

@WebTool
for what it's worth, ive been watching ford the past two weeks. not sure if ill pull the trigger on it, but the dividends are honestly great and it's not a huge risk

Ignoramus
Ignoramus

If you can't escape your income right away try to move towards replacing it with things you love instead.

Illusionz
Illusionz

@BunnyJinx
What are the dividends?

Dreamworx
Dreamworx

@Illusionz
theyre these things where the company gives you some of their money

haveahappyday
haveahappyday

@BunnyJinx
I am sentimental about ford. Not good to be sentimental about stocks but oh well. I always regret not buying ford stock in 2008-2009. could have multiplied my money by 10

TechHater
TechHater

@TechHater

14.4 times my yearly consumption of $80k is just over $1.1m. Exactly how much I have.

haveahappyday
haveahappyday

How do I start investing money? Vanguard?

Booteefool
Booteefool

bump

iluvmen
iluvmen

@TechHater

I'm going for 5% a week right now, in 6 months I'll have enough to go slower and still live off my trading/investing income

Made 2% last week! Better than negative. Today I'm getting my savings account set-up to collect profit, and tomorrow I'll start righting down every single trade and investment I do and how much they get me over how long it takes to sell it.

Skullbone
Skullbone

@CodeBuns
old pic i saved

Emberfire
Emberfire

@iluvmen
writing down things is great for feedback, and not buying stocks with emotions. I fell for a suden price rise in a stock i had been brooding over and now am stuck with a stock that may take until the year end to reach a profitable selling value

On another topic, anyone has any experience with selling e-books on amazon? how to do it? and how to make it so people at least see it?

VisualMaster
VisualMaster

@Emberfire

Even writing that post is good, man. Stocks and cryptos are incredibly emotional and I think everyone should have a plan and write down every single move they make. I've made that same mistake with panic buying too.

GoogleCat
GoogleCat

@MPmaster
a aprox. 10% yearly

Good luck finding an investment that returns 10%. You're also omitting taxes...you would need 10% AFTER tax. In this market you're lucky to find an investment offering 4% that isn't a pajeet-scam level risk. Even if the stock market returns 8% average over past 100 years, you have entire decades above or below that, and the next few years may actually be a decline or stagnation comparative to inflation.

Just assume tax is gonna eat 15% of what profit you make and that the best investment you can get will be maybe 5-6% return, and then calculate inflation at 3%.

Yes you are new.

@askme

Daytrading is a meme like boku no pico or infinite jest. Bogelhead's fgt. Every investor who is respectable rips on daytrading because it is literally retarded, about as financially sound as professional gambling.

also fuck these food captchas, I don't need to crave pancakes at 5pm.

SomethingNew
SomethingNew

Not getting married greatly increases your chances of financial independence.

cum2soon
cum2soon

@GoogleCat
No idea about US or Europe or w/e, but Brazillan Tesouro Direto is offering a 13,53% a year at 3% taxes, and the riskis quite low, as it would need brazillian economy to complete breakdown for a loss, which is not happening anytime soon, even with the recession

JunkTop
JunkTop

7%

This is hugely aggressive. Even the famous Trinity Study's quoted safe withdrawal rate of 4% is somewhat optimistic. For a sustained early retirement actual SWR is about 2-3%, which means you need 30-50x your annual expenses saved.

Techpill
Techpill

@cum2soon
forgot to add that it follows the SELIC interest rate controlled by the Brazillian central bank, so the paid anual % depends on SELIC being kept at such a high rate in order to attract investors, imo it will remain this high for at least 2 more years

StonedTime
StonedTime

@JunkTop

Why don't you try calculating it instead of regurgitating shit. You have the interest earned component on the remaining principal during retirement, you have the withdraw of principal component, and you have the number of years of retirement. It makes a difference whether you retire at 45 or 65 and also how much you can live on. Also depends on your tax situation.

just did my calculation and even without touching the principal, I can retire at 45 if I live on 23k a year, at 20k/year savings during worklife and at a very conservative 4% return, all adjusted for inflation and tax. If I want to devour the principal (can't take it with you) that amount per year I can live on goes way, way up. Considering I have been living on 10k or less... 23 is certainly doable. And the practical maybe 35k if I eat the principal, which duh of course you do... Depends on your desired margin of safety. But I plan on putting a bullet in my skull at 85 so hey.

I fucking hate you people who just spout some arbitrary percentage you heard somewhere.

Gigastrength
Gigastrength

Tell me how to fix my situation
Make 1700 bucks a month after tax working full time
rent 1000
food 200
cell phone 55
internet 60
water 100
electricity 100
car insurance 140
I can save 55 dollars a month at the moment

Bidwell
Bidwell

Does this take into account inflation?

hairygrape
hairygrape

@Gigastrength

Start making more money

happy_sad
happy_sad

@TechHater
7%????

4% is the community standard SWR. Even in parts of Europe it's suggested to around 3%

Need_TLC
Need_TLC

@Dreamworx
He asked what Ford's dividends are, not what a dividend is, you fucking moron.

Gigastrength
Gigastrength

@TechHater
Remember the 7% rule! You can only safely withdraw 7 percent of your saving annually. This means that you need to hoard 14.3 times your yearly consumption to become financially independent.

Its the 4% rule , the s&p over time averages 7.7% which we round down to 7 because QE fudged it upward , ITS A 4% RULE with 3% average inflation, so you need to save about 25x yearly expenses because 3% of the earnings have to go back into the nest egg to hedge against inflation

asshole

Techpill
Techpill

@Gigastrength
instead of rent buy a duplex with an fha loan (3.5% down as long as you live in it a year after purchase)

rent the other side to pay all / part of the mortgage

its called house hacking

Fuzzy_Logic
Fuzzy_Logic

@GoogleCat
Good luck finding an investment that returns 10%

real estate

Raving_Cute
Raving_Cute

@cum2soon
@Techpill

pic related, taxes only after withdrawing your wins

i wish i had some thousands to multiply

Inmate
Inmate

@Gigastrength

makes 12/hr
wants a car, fancy housing, expensive phone plan, and blows through utilities like electric and water grow on trees

Lower your bills retard. Get a roommate for starters. Many people share a flat or even a bedroom or studio.

Poker_Star
Poker_Star

Only 3hrs left guys!

https://rawx.io/poll.html

vote TRUMP

let's MAGA

StrangeWizard
StrangeWizard

@CodeBuns
the secret to day trading or trading in general (as i have been told by a professional trader) is to never withdraw from your fund, at least until it reaches your goal amount).
if your situation requires you to take a salary, or make a salary from your trading, then (it has been said) you won't do well, you'll constantly be chasing the "i have to make x thousand this month" idea.

if you have a source of income, then trading lets you build long term and you can turn $10 into $100's of k, rather than resetting you balance each month to $10k. you also don't need to freak out over a quiet month, don't need to take too high a risk because your bills are covered.

Carnalpleasure
Carnalpleasure

@Fuzzy_Logic
Mutual Funds

Crazy_Nice
Crazy_Nice

@TechHater
7% rule? No, the S&P500 averages 7%. You need to account for 3% average inflation. It's the "4% rule", meaning you need 25x your yearly expenses invested to safely retire, forever.

But you probably just did that so people would reply to correct you so the thread doesn't die. I accept that.

happy_sad
happy_sad

@haveahappyday
Yep. Vanguard's S&P500 is the easiest, cheapest, and most reliable method of investing your money in the market, period. Its ticker name is VOO, has a dividend of ~2%, and it will never go to zero. If it does, the world is ending and you'd have more important things to worry about.

You can make an account with Vanguard and buy their ETFs for free. There may be an account minimum, something like $1,000 to $3,000, but not more than that. Otherwise you could make a Robinhood account for free trades and just buy VOO there. Whatever you do, don't open with a brokerage that charges any kind of fees (note: everything except Vanguard and Robinhood charges fees).

TalkBomber
TalkBomber

@StonedTime
planning your retirement around on how long you "expect" to live, so the money runs out when you die
not planning your retirement based on passive income into perpetuity
Awful advice.

If your retirement savings would *ever* run out, you are not financially independent. You are living on savings, and it has an expiration date.

If your retirement savings make enough passive income to completely cover your expenses, while still maintaining or growing the principle, you are financially independent. Doesn't matter if you live another 10 years or another 200; you will always have enough money.

@Gigastrength
1000 rent
60% of your income is going to rent. I think "guideline percentages" (like "You should only spend 20% on rent or mortgage!") are blanket bullshit, but 60% is waaaay too high. You need either roommates, or a smaller apartment. Maybe both.

cell phone 55
I'd switch to Cricket ($35/mo for 2.5GB) or even better, Republic Wireless ($25/mo for 1GB). The bonus about Republic is they refund any data you don't use as a bill credit, so if you use very little data your bill would be like $15 a month.

water, electricity
Not sure where you, but this seems pretty high. Try to figure out what's using so much water and power.

car insurance 140
You might have a bit of wiggle room here, I would shop around. Check out https://www.nerdwallet.com/insurance/compare-car-insurance-rates to see a bunch of different rates from different companies. Then look for the low-cost insurance companies like The General or Esurance, etc. Do some research and you can save a ton of money. It just takes a little googling, that's all.

On the topic of trying to cut down your bills, check out this article: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ and then poke around on his blog. There's a ton of stuff on saving money, living efficiently, and gaining financial independence sooner. There's a lot of good information.

BunnyJinx
BunnyJinx

@TechHater
Implying finances is a means to an end
Implying you shouldn't just earn money by doing what you love
Stay pleb

Fried_Sushi
Fried_Sushi

@TalkBomber
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
The most important thing to note is that cutting your spending rate is much more powerful than increasing your income. The reason is that every permanent drop in your spending has a double effect:

he has a lot of well-described advice, but this is bullshit unless the person has reached their field's pay cap

Stark_Naked
Stark_Naked

@BunnyJinx
oy vey what are you doing

BinaryMan
BinaryMan

@Stark_Naked
You can insult the goyim in their face and they wouldn't even realize it

Lord_Tryzalot
Lord_Tryzalot

Returns for a Japan-style lost decade

Fuck me with a rake.

Emberfire
Emberfire

@Skullbone
MMM?

Ignoramus
Ignoramus

Playing it this "safe" is a usd all in.

Lunatick
Lunatick

@StonedTime
How did you calculate It?

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