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Retirement Discussions / FIRE Wannabees
|Subject: Re: A visual tool||Date: 9/23/2003 9:35 PM|
|Author: peteyperson||Number: 882 of 5069|
May I make a suggestion, Choco.
A fine lady on the Fool boards once wrote (I forget her name but it was such a deceptively clever & simple idea that it stuck in my mind), that she broke each item in her FIRE budget into the multiple she was using and saving towards. Whether that multiple is 25x, 40x or 50x, she had that multiple down the side of each budget item and as she saved for FIRE she would see how she was doing on each budget item.
So for instance, she would start saving and gradually build up enough to cover her first budget line item, say Food. Then that would be funded 100%, so she could afford to eat, never have to worry about food ever again. Then she was saving towards the next budget line item, maybe transportation, etc..
I thought it was a lovely method because it broke the long-term goal down into manageable, achieveable chunks and you could see the progress flowing down the page on the FIRE budget. If someone were a bit fancy with spreadsheet formulas, they could have a field for the total invested, calculate the w/d amount based on their w/d percentage planned and then distribute that down the page. Take a bit of work but it could be set to automatically recalculate from whatever number you put in and it would fill out all the spending items you could now afford. A more simple version would be to manually add the amounts in by hand which works well too for those who only know the basics of spreadsheet stuff.
Portfolio $ 125,000
W/d rate 4%
Annual withdrawal $ 5,000
Item Budget FIRE x25 Funded?
Food $3,000 $75,000 100%
...shamelessly stolen from the credit card boards.
I've grumbled before about how saving for FIRE is like watching paint dry. So I'm thinking of making an FIRE paper chain. Each link in the chain corresponds to a dollar increment (e.g., $2K), with every tenth link a different color to mark a milestone. Each time I reach a given increment in my FIRE fund, I get to break a link. Call it "breaking the chains of full-time employment." Each time I reach a milestone, I get to break the link and go to a fancy restaurant for dinner as a little reward.
Because the chain will likely be verrrrry long, I've also opted to change color schemes completely for each large milestone (like every $100K). And the last link will be a gold-colored link marked "FIRE". I'm into personal symbols, and a gold link reminds me of the "golden handcuffs" that I was warned about early in my career.
Of course, if the market goes down, I'll probably have to occasionally add some links back to the chain. But by continuously putting money into the FIRE fund, this shouldn't happen too often.
Now I'm afraid this chain will be so long that it might discourage me! But at least I get something to play with.
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