A million dollars is a lot of money. Of course, due to the effects of inflation, a million dollars doesn’t go as far as it used to, but it’s a nice round number and an excellent initial goal for anyone trying to obtain financial independence. If you manage to save up $1 million in liquid assets […]
Archives for September 2017
Don’t Buy Stuff You Can’t Afford
We have a problem If you haven’t noticed, Americans love debt. The average household has around $130,000 in total debt, including $50,000 in student loan debt, nearly $30,000 in auto loans, and $16,000 in credit card debt. With an average credit card interest rate of 15%, that would be $2,400 in interest per year. With a student loan […]
Don’t Lose Your Freedom: Mitigating Sequence of Returns Risk
Let’s say you’ve been diligently saving half of your income for the last 15 or 20 years, and you finally accumulated enough to call yourself free. If you’re convinced of the merits of the 3% rule, then that means you have saved up 33x your yearly spending. For example, if you plan on spending around […]
Rethinking The Safe Withdrawal Rate: 3% Is The New 4%
If you’d eventually like to stop working and live life on your own terms, you need to know how much to save. The 4% rule The conventional wisdom is that you need to save up enough money so that you can live on 4% of your total savings per year. For example, if you can live on $40,000 per […]
So You Don’t Have a Pension? No Problem – Make Your Own Pension
A pension is a form of retirement plan where your employer sets aside money for you, invests it, and then pays you a certain amount per month when you leave the company. Defined Benefit vs. Defined Contribution Plans Pensions can also be referred to as a “Defined Benefit Plan” because you are paid a specific […]
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