The fundamental question that people have about early retirement is: how much do I need to save to retire?
For those who understand the mathematics behind early retirement, the main thing that determines how big our retirement portfolio must be is the safe withdrawal rate.
Essentially, safe withdrawal rate is the amount of money you can withdraw from your portfolio when you are retired without running out of money.
I stumbled upon an amazing 28 part series on Early Retirement Now that calculates safe withdrawal rates for U.S. markets. It calculates safe withdrawal rates for different retirement lengths, asset allocation, and more!
However, there are major differences between U.S. and Australian markets that mean each would likely have different safe withdrawal rates.
It’s not fair that our U.S. friends have such great data on their required retirement portfolio and we don’t. So in the next few posts, I plan to replicate some of the analysis on Early Retirement Now — with Australian data, for Australians.
I’ve reached my third month of recording my income, expenses and net worth. This month I noticed that my spending was so-so. I neither blew my budget, nor turned into a super frugal saving machine.
In a way, I guess this is how things are supposed to be. I’m starting to turn sensible spending behaviours into a way of life. It’s not a sacrifice, it’s just how I spend my money!
And despite not feeling overly satisfied about my spending habits this month, I was still able to grow my net worth more than previous months.
Things just seem to be falling into place, let’s see how that happened…
I’m sure that I’m not the only person that wanted to learn more about the Australian share market, opened up Google, and got smacked in the face with jargon and technical terms.
But why? Surely the fundamentals of investing can’t be that hard to understand.
The cynic in me says that finance professionals like to make the easy sound complex to keep themselves sounding smart in their suits.
Either way, I decided to spend some time explaining the basics of the sharemarket. From ‘what is a share’ to ‘what does an index measure’ to ‘how do unfranked and franked dividends work?’.
This article goes out to anybody who’s had an embarrassingly stupid share market question but was too afraid to ask.