The Motley Fool Discussion Boards
Retirement Discussions / FIRE Wannabees
|Subject: Re: Poll: FIRE value as a multiple of gross inco||Date: 2/1/2006 12:04 AM|
|Author: dgalbraith100||Number: 3677 of 5087|
Fire is a function of what you SPEND, not what you MAKE
Well maybe thats not 100% accurate. But FIRE is much more dependant on your spending. You have to save 25 dollars for ever dollar you spend.
Or another way to look at it, if you spend $1 less you need $25 less in the portfolio. So spend $1,000 less in a year, and you need $25,000 less in the portfolio, cut your expenses by $10,000 a year and you need $250,000 less in the portfolio.
A 10K cut would probably be difficult for most people, but a 5K cut isn't out of reach for many, and 5K cut is 125K less in the portfolio needed.
Controling the budget has a much bigger impact on FIRE than earning more money. Of course there is always the Living aspect of LBYM, so don't cut to much :)
|Copyright 1996-2015 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|