Category: General Early Retirement

How quickly can you retire? Part 2: The advanced calculation

Posted by on 18 September 2018 in General Early Retirement

Recently I outlined the 10 second calculation to understand how much you need to retire. Basically, we need to save 25x our annual expenses.

That’s a great rule of thumb. But if you’re like me, you still had a bunch of questions like “how long will it take me to save that much?” and “how much of my income should I be saving?”.

I hear you! In this post we walk through the Ordinary Dollar Early Retirement calculator — a simple to use (but very powerful) tool that helps calculate different retirement scenarios.

Once we’re done you’ll have a much more detailed understanding of how much you need for retirement, how long it will take you to get there, and how much money you can spend once you’ve retired.

Congratulations! You’re about to take a big step towards early retirement.

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How quickly can you retire? Part 1: The 10 second calculation

Posted by on 29 August 2018 in General Early Retirement

In my first post, I told a story about the Partners in my consulting firm. These people earned lots of money, yet they still worked well into old age. This wasn’t because they enjoyed the work, it was because their spending habits prevented them from retiring.

The majority of people live their lives like this. They believe that life is about working hard and earning as much money as possible. But because you’re working so hard, you deserve to treat yourself. Why shouldn’t you buy the nicest house on the block, the flashiest new car, or regularly eat at nice restaurants?

According to this common perspective, the role of work is earn money, and the role of money is to buy things that make you happy.

I’ll admit, even I held that view for quite a few years. It felt right to treat myself to nice things as a reward for working 80 hour weeks in a claustrophobic office. But I realised that, despite buying things I thought would make me happy, I wasn’t any happier.

Slowly but surely, I changed my perspective on the role that money plays in my life. I realised that money was a tool that I could use to unlock things that were important to me. That is, time to spend with people I care about and the freedom to focus on what fulfils me.

After this realisation, I had a bunch of questions: How do I manage money differently in order to unlock those important things? Will I ever be able to retire early? What sacrifices will I need to make? Am I being crazy?

And I’m sure you have similar questions, so let’s take a look at the very simple mathematics behind early retirement.

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The mindset shift that led me to early retirement

Posted by on 31 July 2018 in General Early Retirement

Most people would say that life has a blueprint. You study hard at school, get a good job, buy an expensive house, and then work hard to pay it off. Along the way, you get to indulge in life’s luxuries because — well — you’re working hard!

I must admit that for the first decade of adulthood, I subscribed to the same blueprint. I studied hard and graduated with a competitive role at a multinational consulting firm. For a few years I worked long hours and paid my dues; hoping to eventually make Partner and earn enough money to retire.

But in the process I noticed something interesting: as my salary increased, I spent more. And as I looked at the Partners at my firm who were earning great money, they were still working well into old age. Why were so many seemingly wealthy people working for so long? Were they happy?

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