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I've been perusing the blog space surrounding the term FIRE, which stands for "Financially Independent, Retired Early."
The idea is once you accumulate enough money and invest it, you can live off the returns of your investment. The general principle seems to be having an investment amount of 25x what you need to live on yearly. So assuming your investments grow at a rate of about 8% a year, you can skim off 4% and keep things sustainable.
I like the idea, especially the notion of financial independence. The method seems pretty solid, so long as you have faith in the stock market continuing to grow in the future[1], which seems to be an implicit assumption by all the bloggers that discuss this (I've been reading J.L. Collins[2] and Mr. Money Mustache[3]).
The other aspect I like is that the methodology works regardless of the amount of money you have--the important number is how much you live off. You don't have to be a millionaire to not need to work anymore; you simply need 25x your yearly living expenses invested. So living frugally and not owning[4] and buying too many things gets you to this magic transition point even faster, which I like a lot.
Last updated Thu Dec 23 2021 in San Anselmo, CA
1: /thought/progress-and-the-stock-market.gmi
3: https://www.mrmoneymustache.com/