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1. #THE SHOCKINGLY SIMPLE MATH TO EARLY RETIREMENT FOR FREE#
2. #THE SHOCKINGLY SIMPLE MATH TO EARLY RETIREMENT HOW TO#
3. #THE SHOCKINGLY SIMPLE MATH TO EARLY RETIREMENT TORRENT#

So let’s take the graph above and make it even simpler. If you save a reasonable percentage of your take-home pay, like 50%, and live on the remaining 50%, you’ll be Ready to Rock (aka “financially independent”) in a reasonable number of years – about 16 according to this chart and a more detailed spreadsheet* I just made for myself to re-create the equation that generated the graph. If you drew this “savings rate” story into a graph, it would not be a straight line, it would be nice curved exponential graph, like this:

It can quickly become a runaway exponential snowball of income.Īs soon as this income is enough to pay for your living expenses, while leaving enough of the gains invested each year to keep up with inflation, you are ready to retire. Then the earnings on those earnings start earning their own money. As soon as you start saving and investing your money, it starts earning money all by itself. In between, there are some very interesting considerations.

#THE SHOCKINGLY SIMPLE MATH TO EARLY RETIREMENT FOR FREE#

If you are spending 0% of your income (you live for free somehow), and can maintain this after retirement, you can retire right now. If you are spending 100% (or more) of your income, you will never be prepared to retire, unless someone else is doing the saving for you (wealthy parents, social security, pension fund, etc.). While the numbers themselves are quite intuitive and easy to figure out, the relationship between these two numbers is a bit surprising. If you want to break it down just a bit further, your savings rate is determined entirely by these two things: Your savings rate, as a percentage of your take-home pay It turns out that when it boils right down to it, your time to reach retirement depends on only one factor:

Money Mustache, but how can I possibly know when I’ll have enough to retire myself, with a completely different lifestyle?”

#THE SHOCKINGLY SIMPLE MATH TO EARLY RETIREMENT TORRENT#

I reviewed my own path to age-30 retirement in “ A brief History of the ‘Stash“, then I did a hypothetical calculation using two average teacher salaries to show how long it would take them to retire in “ The Race to Retirement – Revisited“.īecause of this torrent of information, people tend to become overwhelmed and say things like, “Yeah, good for you Mr. In addition, the Internet presents us with retirement calculators, competing opinions from a million financial advisors and financial doomsayers, unpredictable inflation, and a wide distribution of income and spending patterns between readers. Money Mustache, we talk about all sorts of fancy stuff like investment fundamentals, lifestyle changes that save money, entrepreneurial ideas that help you make money, and philosophy that allows you to make these changes a positive thing instead of a sacrifice.

#THE SHOCKINGLY SIMPLE MATH TO EARLY RETIREMENT HOW TO#

This is the blog post that shows you how to be wealthy enough to retire in ten years.