There are 2 small stones on my mind, each engraved with a single word. One says, “Imagine.” The other says, “Create.” Those two words have made all the difference for me. I believe that success is limited only by our ability to imagine what we want and to lead ourselves to it.
Financial Independence (FI) is different from retirement. Think of financial independence as the amount of money you'd need in order to never need to work again. Retirement (RE), on the other hand, generally means not being employed, but being self-sufficient.
It's possible for people to be FI but continue working – you see it all the time. From CEOs of companies to quiet employees who have saved huge amounts to bloggers talking about retirement (well, some – not me). There are also people who are retired, but who may need to return to work someday down the line when their savings run out, or if social security fails.
To be FIRE (financially independent + retired) is an aim with the goal of minimizing stress from external sources. It does rely on stock markets to perform in a similar pattern to the last 100+ years, but aside from that, it's not based on too many assumptions.
My personal withdrawal rate I use for calculations is somewhere between 3% and 4%. The fewer unknowns in your life, the higher your withdraw rate can be. When I say unknowns, I include many things that are notoriously difficult to plan for: your health, insurance, home situations, family health, changes in your spending, lawsuits against you – anything that could throw a wrench in your plans.
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