FI/RE Awareness and Planning

Coast FI/Re

  • Coast FIRE is a financial independence strategy that involves saving and investing early in your career to reach a target amount of savings, then letting your investments grow without additional contributions.

  • The term "coast" refers to the idea of keeping working after reaching your savings goal, but reducing your hours to just enough to cover living expenses.

Savings goal

  • The amount you need to save depends on your age, lifestyle, and retirement needs. A common rule of thumb is to save 25 times your annual expenses.

When to stop saving

  • The goal is to reach a point where your investments' average return is greater than the amount you could save in a year. Once you reach that amount, you can stop saving for retirement.

Bigger Pockets Money

Fi/Re Basics

https://youtu.be/Hehob95BUO0?feature=shared

Fi/Re Number (based on 4%)

Modeled as financial success for 30 yrs of retirement.

  • Save 25% income to speed up Fi/Re date

  • Manage spending, know your monthly or annual needs

  • Invest in Index funds—long game

  • Save in 401k, ROTH—and plan to convert IRA-401k to ROTH (tax early is better than later as it builds tax free)

  • Spend no more than 4% of total assets, will taper down over time and expected.

  • 20X to 24X Current Annual Spend

  • e.g. $15k/mo x 12 x 20 = $3.6M; $15k/mo x 12 x 24 = $4.3M

Michael WeiComment