How early can you retire?

boglehead

The interesting thing is that MrMoneyMoustache would look at this £1,012 a year in terms of what passive portfolio you would need to sustain that expense ie. 30 x 1,012 : you should have £30k saved up to self fund this expense once in retirement...

A bit extreme but definitely an interesting way to look at things.

I personally learnt a lot from MMM, but let's face it, you wouldn't allow yourself life pleasure anytime, if you were following its principles literally.

I personally got inspired by it, but live my life according to my own philosophy - and found my own balance of living for the present / enjoying life and saving to retire early enough to enjoy being with my kids while they're growing up.

Find what works for you,

Good luck

justme111

£1.40 a day is about £300 a year. You would have to deduct cost of ingredients . You already spent time thinking about it and how long will you spend over the year preparing those breakfasts , shopping for ingredients, cleaning after and so on. So what will be your cost per hour in having that saving done ?

nb73

GB's cycling coach talked about "the aggregation of marginal gains" leading to Olympic success in 2012. Making breakfast and walking to work are marginal gains, in personal finance. It is the sum of all these marginal gains which will make a difference over time.

I would consider these "defensive" gains and ideally they need to be matched by "offensive" gains - things you do to maximise income. I think you might like the book "your money or your life" if you have not already read it

YoungBusinessman

Dropping a comment in here so i can finish reading it on my lunchbreak tomorrow.

N1AK

racing_blue wrote: »

http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

save 0% = never retire
save 5% = 66 working years
save 10% =51 working years
save 25% = 32 years
save 50% = 17 years
save 80% = 5 years

I'd take any of the calculations from MMM soaked in brine and rolled in finest sea salt personally. The principles are sound, but he continues to use shockingly optimist projections; and dumbs things down in ways that sometimes aren't helpful.

richy999

DireEmblem wrote: »

From next week I also plan to stop having breakfast at work. In general I spend £1.40, and combined with a bottle of bru makes £2.90 a day, or £667 per year. Yes food at home will cost me money, but if I kick the bru and make my own breakfast, combining that with walking to work would save 1,012PA. That just seems insane since I am not really losing any 'home comforts' in my lifestyle, yet in the long run I would be significantly better off. In fact I have already setup a weekly direct debit to a savings account for this with the appropriate narrative:D

I always thought of myself as frugal, but I got into the habit of buying breakfast and lunch at work which was costing me at least a fiver a day.

While reading a blog... think it was the Mr Money Moustache one, the following phrase rang a bell with me...

'Are you too wealthy to to cook your own food?'

Well, no, I am certainly not too wealthy :-)

It also occurred to me that these little 'treats' are extending the number of years that I will need to keep turning up to work.

So I've been buying myself a supply of porridge oats and dried fruit and making my breakfast in the microwave at work. I recon it costs me about 10p a day for this and a tea bag for a drink.

I forgot to bring in any lunch today so have had a second helping of porridge :-)

Malthusian

I'd take any of the calculations from MMM soaked in brine and rolled in finest sea salt personally. The principles are sound, but he continues to use shockingly optimist projections; and dumbs things down in ways that sometimes aren't helpful.

Agreed. If a regulated business gave its clients projections which assumed a growth rate of 9% the FCA would come down on them like a ton of bricks. (He says 5% above inflation, so add 2.5% for that, plus 1.5% for charges and advice.)

Standard assumptions that are now considered hopelessly optimistic considered 9% a "high" rate of growth. The standard "medium" growth rate is now 2.5% after inflation - but if you're not invested 100% in equities then most would assume less than this.

That article comes across more as fantasy / inspiration than financial planning.

N1AK

Malthusian wrote: »

Standard assumptions that are now considered hopelessly optimistic considered 9% a "high" rate of growth. The standard "medium" growth rate is now 2.5% after inflation - but if you're not invested 100% in equities then most would assume less than this.

Nicely summed up :T what's frustrating is that even using realistic numbers the arguments for early investing etc still make a lot of sense. I assume MMM knowingly uses false figures as hyperbolic to grab interest and expand the cult-esque following.

Malthusian

I don't want to slate the blog because anything that encourages people towards saving is usually a good thing, and on some people the MMM approach will be more effective than the cold rational tone I would use. But cult-esque is a good word, it also explains the use of weird terminology that only the blog's regulars will understand and the generally breathless lovebombing prose.