Would be cool to hear from those who have and how you got started. Were there any pitfalls or things you would have done differently?

Many people around me are saying US based index funds is enough coverage to FIRE but I want to know if it's worth diversifying even more, maybe 10-20%?

I recently FIREd, and am enjoying every minute of it. I thank this (migrated?) community for their stories, struggles, successes, and wisdom. Adaptation to a life of FIRE has been pretty easy, except for one thing. Prior to FIREing, I kept a close eye on my portfolio, the markets, and everything financial. As you know, if you’re driven to FIRE, it takes a bit of effort to keep things fresh in your portfolio. To some, managing your own portfolio can be a hobby, or other form of enjoyment. Not me. I get no joy in monitoring the markets. I would now prefer to focus on living and not financial management. Question: do you have any suggestions on the best way to put a portfolio on autopilot? What I’m seeking is something bot-like that monitors my holdings, applies a variety of policies, and alerts me when action is needed. Some factors:

• I’ve looked at managed account options. They all seem to be pricy offering little in return. This option seems viable to those with > $10M.
• I’m reluctant to go with “target” funds. They don’t seem to be very efficient, and are not at all tunable.
• There seem to be some promising software packages out there that go beyond mere monitoring.
• I don’t think ChatGPT is quite ready for this task :).

curious to know how many low income savers are in the community vs typical FIRE jobs like software engineers

I first heard about the FIRE movement on Reddit, but the way it was presented there felt too strict to me and put me off of the idea. That was until I decided to search for some financial podcasts to listen to at work and stumbled upon ChooseFI.

They made the lifestyle changes feel easier to accomplish and didn't make it feel like pursuing a FIRE path would take away from my current lifestyle.

Overall it's just been easy listening and has really fired me me up to take control of my financial future.

The whole concept of FIRE is that, once you can cover your expenses with your investments, you essentially provide your own income. However, stock returns aren't stable, so the concept of what a "safe" level of withdrawal becomes complicated, especially since most information available online assumes a 30-year retirement (e.g. from 65 to 95).

For those who are newer to the concept, basically a SWR is a rate at which you should be able to withdraw from your portfolio and not run out of money before you die, with some level of success. Most analyses use a 95% success rate as the target, though your individual comfort level could certainly vary.

Here are a couple articles discussing safe withdrawal rates:

• Mad Fientist - Problem with the 4% Rule
• ERN Safe Withdrawal Rate series

I personally am in the camp that a 3.5% SWR is probably the best choice for me, but I may revise that upward based on economic conditions when I'm about to retire (i.e. Shiller CAPE ratio, my sector's job demand, etc). Then again, I have a family to support, so the stakes for me are a bit higher than if I was single and could afford to change my lifestyle substantially as needed.

So what are your thoughts? Please ask any questions, or share your personal safe withdrawal rate target and your justification for why it makes sense.

One of my favorite parts of my day was reading through the daily thread on r/financialindependence. Anyone interested in having the same thing here?

cross-posted from: https://lemmy.ml/post/1161162

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Glossary

This is a growing list of commonly used terms in our community. Please suggest more terms not listed here!

Boglehead = A follower of John C. Bogle's financial philosophies and investing strategies.

COL = Cost of Living

LCOL/MCOL/HCOL/VHCOL = Low/Med/High/VeryHigh Cost of Living

DCA = Dollar Cost Averaging; the strategy of investing money into the market over many regular intervals of time (as opposed to lump sum investing).

DINK = Double Income No Kids

FI = Financial Independence; the ability to live off savings and pay living expenses without needing to be employed.

FIRE = Financial Independence & Retire Early

Coast FIRE = having enough money already invested so that it is not necessary to invest more to achieve FI at the desired retirement age.

Barista FIRE = having enough money to retire at the desired retirement age and also getting a part-time job for additional income and health insurance.

Lean FIRE = achieving FIRE without having much safety nets for luxuries/children/major health costs during retirement, usually only spending on necessities such as housing, food, and transportation.

Fat FIRE = achieving FIRE with the ability to cover unexpected expenses during retirement while living in equal or greater lifestyle as before retirement.

HENRY = High Earner, Not Rich Yet

HYSA = High Yield Savings Account

NW = Net Worth

PITI = Principal + Interest + Taxes + Insurance

PMI = Private Mortgage Insurance

SWR = Safe Withdrawal Rate

I don't know if Lemmy has the concept of a wiki, but I'd like to solicit discussion about what such a wiki would have, if we can create one.

Here's what I found useful about the one over at Reddit:

• flow chart - I noticed someone made a post over at one of the other PF subs, so maybe just link to that?
• reading list
• blogs
• glossary
• calculators and simulators
• related communities

Even if we can't have a wiki, perhaps we can fit some of this into the sidebar.

Anyway, what else do you think would be useful as a quick reference?

The whole FIRE concept is based on the 4% rule, which comes from the Trinity study which basically states that you can withdraw 4% at the start of your retirement and update for inflation every year and have a 95% success rate for a 30 year retirement if you have a 60/40 stock/bonds portfolio. Or in other words, you can retire once you have 25x your current expenses (100%/4 = 25).

So a lot of people use the 25x expenses metric to decide their FI date. I think this is a really nice number, but some people like to go a bit beyond and figure out things like when you'll reach that point, or what percentage of the way there you are.

For this post, I'll use the following short hands:

• SWR - your safe withdrawal rate - basically, if you think the 4% rule is too aggressive for your retirement (say, you'll be retired longer than 30 years), adjust this
• CAGR - compound annual growth rate, or basically the average market return you expect between now and retirement; I'm assuming inflation adjusted figures here
• SR - savings rate, or annual savings in dollars
• E - expenses per year
• NW - net worth; in this post, I mean your retirement assets, so don't include non-income generating assets here, like your house

If you expect a pension, merely reduce your expenses by your expected payout.

To calculate your retirement number, simply divide your expenses by your SWR:

=E/SWR

To estimate your years to retirement, use the NPER spreadsheet formula, and be careful about the negative signs:

=NPER(CAGR, -SR, -NW, E/SWR)

This will give you the number of periods (in this case years) until your current assets will match your FI number, assuming compounding at the market rate.

To calculate what percent of the way to FI you are, use a ratio of the above estimate and an estimate assuming you're starting from scratch:

=(1-NPER(CAGR, -SR, -NW, E/SWR)/NPER(CAGR, -SR, 0, E/SWR))

If you do a simple NW/FI number, you'll be off because it doesn't account for compounding.

If you want to find your coast FI date, or the date you'd retire if you stopped investing entirely, just zero out the savings rate:

=NPER(CAGR, 0, -NW, E/SWR)

I hope something here was helpful. I use a bunch of other formulas, so feel free to ask for other things you may be interested in, or share some of your own!

Hi all, I wanted to create this community for those interested in the FIRE movement to share their experiences.

A few years ago, I started tracking my net worth and increasing my savings to hopefully even have a chance to retire, and now want to push further to achieving financial independence and MAYBE HOPEFULLY retire a few years earlier as well.

Anyone else in a similar situation? How has the journey been for you so far?