It really is that simple…part II

No it isn’t‼️

I used to think it was a bit funny, the simplistic way these so-called FIRE followers pushing their books, and advice explaining what you need to retire.

If you are currently spending $40,000 a year, multiply by 25 and there you have it. You need $1,000,000.

Really? If you are spending $40,000 a year it must be after tax. If you save and invest and now have $1,000,000 chances are most or all of it has not been taxed, so you don’t really have $1,000,000 generating $40,000 in spending money.

And what about inflation? If I spend $40,000 in 2021 and have fifteen years to go before retiring, that $1,000,000 is irrelevant. If this were 2006 and your were planning for 2021, you would need not $1,000,000 but $1,296,840.99 and that’s with low inflation. Look at the fifteen years between 1980 and 1995. You need $1,848,813.

It’s just that simple, right?

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