Would you retire at 30 and live frugally?
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It seems you've been scorned from treating investing as gambling and I'm sorry to hear that but that's not how this works. Yes, markets can go down and you can lose money but:
- this is a hypothetical which doesn't care about real market considerations
- you can and should average your retirement investing against a conservative figure so in boom years you're underspending and in bust years you're still covered
This is all calculatable. The problem is we're all paying for some jackass's yacht when we should be paying for community rail and affordable housing.
You're dreaming or selling ? Retirement investment is Ponzi scheme. If you think there will be more and more people every year in your country look up birth rates. You know what is Kondratiev wave ? There is no real market right now, go make something and see how much it's worth and for how much billionaire owned companies are selling it and why they don't pay taxes.
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If you had the money to retire at 30, your savings would be invested and on an average year your earnings would cover your expenses. You would have health insurance, so no worries there. The only catch is that you would have to keep your expenses at 65% of what you spend right now. Would you take it, or would you rather work a few more years for a better lifestyle and financial security?
We couldn't. More than 65% of what we make goes just to cover the bills, so it wouldn't be a possibility. Even if we didn't eat or have a car.
Would be underwater and back at work within a couple of months.
If you mean some version of 65% of our current lifestyle like magically the house shrinks and costs 65% of what it currently does, then maybe? We don't eat out much, don't vacation much, don't go out much already though.
If you mean health costs all covered, and no more retirement contributions and 65% of GROSS earnings, that would actually give me almost the exact same net pay, and wouldn't be a different lifestyle. Those things cost 32% of my earnings and taxes 15%.
So I'm not sure exactly how to think about this but in short - I am more willing to work to have a reasonably good life, than to not work and not have a good life, but have a lot of free time. I do know how to have fun for cheap, have been poor before, but I like life now better than then.
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If you had the money to retire at 30, your savings would be invested and on an average year your earnings would cover your expenses. You would have health insurance, so no worries there. The only catch is that you would have to keep your expenses at 65% of what you spend right now. Would you take it, or would you rather work a few more years for a better lifestyle and financial security?
Depends on if I could afford to own a scrapyard/pick and pull first. As a welder and machinist, thats basically a playground for me. If I ain't working, ill still be making. Otherwise, yes. I don't spend much now as it is, but growing my own weed would probably drop me below 65% by itself.
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You don't need to buy new shoes every time you go for a walk, you know?
Funny enough, the money never seems to be spent on stuff for me.
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This is a highly pessimistic take. 2 million dollars would conservatively yield $80,000 per year. This would place you at the 70th percentile in the USA for individual income.
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If you had the money to retire at 30, your savings would be invested and on an average year your earnings would cover your expenses. You would have health insurance, so no worries there. The only catch is that you would have to keep your expenses at 65% of what you spend right now. Would you take it, or would you rather work a few more years for a better lifestyle and financial security?
Lol, that's called being homeless
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I guess I have a different understanding of frugal. For me, you can be rich and yet frugal, only spending money on the needs and occasional wants. Some people don't even show that they're net worth increased. I forgot the name of the person, but he worked as a janitor throughout his life. When he passed away, to his family's utter surprise, he left $8 million from his investment account to his family. The guy could have cashed in the investment profits and lived lavishly but he didn't.
In this hypothetical circumstance described by OP, you don't have $80m on which to live frugally travelling the world pursuing your interest in photography.
For most people, living on 65% of their current earnings would mean a serious curtailment of their current activities. A subsistence if you will.
Besides which, most hobbies aren't really satisfying in a way that can nourish the soul, certainly not the ones you can do at home for little or no cost anyway.
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You can do a lot on a frugal budget
What does that mean? You said 65% of current earnings in the OP. Most people couldn't pursue any significant hobbies or interests on that level of income.
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What does that mean? You said 65% of current earnings in the OP. Most people couldn't pursue any significant hobbies or interests on that level of income.
65% of your spendings, addmittedly this question is mostly relevant to people that spend at least a somewhat above the median, where they can reduce their lifestyle by 35% and still live, just frugally.
I'm not sure what you mean by significant hobbies, but personally with the exception of one, all of my hobbies are cheap/free.
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This is a highly pessimistic take. 2 million dollars would conservatively yield $80,000 per year. This would place you at the 70th percentile in the USA for individual income.
I won't argue individual angle... But not having a family is sacrifice in of itself then.
My numbers did account for a family of 3.
With that being said, cashing out stocks or clipping coupons is a taxable event. Plus inflation and health insurance on a private market.
It is doable but still has risk.
Plus which 30 yo has paid off house and 2 million they earned?
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If you had the money to retire at 30, your savings would be invested and on an average year your earnings would cover your expenses. You would have health insurance, so no worries there. The only catch is that you would have to keep your expenses at 65% of what you spend right now. Would you take it, or would you rather work a few more years for a better lifestyle and financial security?
Easy. Currently I am probably saving close to 35% of my income as I don't really know what to spend it on and already live pretty frugally, but I have to work still. So just stop the spending on savings and live like I do now.
Earning £26k so nothing special but a bit over minimum wage. Can save at least £500 a month without trying after paying my half of the bills and mortgage. Would probably save more if I didn't buy so many cat toys.
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65% of your spendings, addmittedly this question is mostly relevant to people that spend at least a somewhat above the median, where they can reduce their lifestyle by 35% and still live, just frugally.
I'm not sure what you mean by significant hobbies, but personally with the exception of one, all of my hobbies are cheap/free.
Sure, fine, whatever. You do you.
I think there are very few people who could spend 40 years painting warhammer figurines and call that a rewarding satisfying life.
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Sure, fine, whatever. You do you.
I think there are very few people who could spend 40 years painting warhammer figurines and call that a rewarding satisfying life.
Why are you so skeptical? I could spend 40 years doing:
- hikes
- walks in nature
- camping
- volunteer work
- going to the beach
- reading
- doing diy projects
- helping others
- learning new things
- exploring my country
- etc
There is so much more to life than work and paid services.
And yes, this is a privileged position, but that doesn't make it wrong.
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If you had the money to retire at 30, your savings would be invested and on an average year your earnings would cover your expenses. You would have health insurance, so no worries there. The only catch is that you would have to keep your expenses at 65% of what you spend right now. Would you take it, or would you rather work a few more years for a better lifestyle and financial security?
Nope. Even though I can pay my bills, I still need to be able to save for other emergencies and have some fun.
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Why are you so skeptical? I could spend 40 years doing:
- hikes
- walks in nature
- camping
- volunteer work
- going to the beach
- reading
- doing diy projects
- helping others
- learning new things
- exploring my country
- etc
There is so much more to life than work and paid services.
And yes, this is a privileged position, but that doesn't make it wrong.
I'm not suggesting that it's "wrong", merely that over time these things wouldn't be satisfying for most people. I suspect that even you would find that life unfulfilling.
It's one of life's great questions and I don't really expect to be able to find a consensus with you.
Loads of people, perhaps even most people, would describe the list of activites you've presented as being the ideal recipe for long term contentment and happiness.
However, most people can simultaneously acknowledge that contentment and happiness is fleeting, intangible, and unstable. I'm sure you've thought of the "new car" example - it's great for a few weeks.
People tend to think they want "happiness" but in practice actually pursue other desires, like being challenged, being needed, being engaged with complex situations and problems. I'm not saying this is good or correct or better, it's just how I observe humans really behave.
If I had no responsibilities, and sufficient wealth to live off passive income, I might plan to do as you say for a year or so, but during that year hope to identify some kind of direction I could devote the rest of my life to.
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If you had the money to retire at 30, your savings would be invested and on an average year your earnings would cover your expenses. You would have health insurance, so no worries there. The only catch is that you would have to keep your expenses at 65% of what you spend right now. Would you take it, or would you rather work a few more years for a better lifestyle and financial security?
wrote on last edited by [email protected]I actually have enough money to retire right now and live frugally for the rest of my life at the age of 51... But to be honest it sounds super boring and depressing.
I know this will go against the grain here, but I enjoy what I do. I'm an engineering manager and I work on cool and interesting projects. I enjoy what the extra money gets me, whether it's vacations or a better place to live or whatever. I enjoy working with other intelligent engineers trying to solve challenging problems. If I was retired I wouldn't have that same engagement. I don't know what I'd do with my time and I'm afraid I would not spend it in a healthy way.
So the reality is I've thought about it, but I'm not really that interested in retiring even though I could.
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No major health issues?
Healthcare is free, so doesn't matter.
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Instead of hypotheticals, am Auatralian. I (m) retired at 35 and divorced/moved at 45 and lived frugally in a mud brick cabin, off grid (solar and septic) on a dirt road in the bush, for a decade with my new (f) partner, she worked part time 2 days a week, grew lots of our own food, rode our MTBs on fire roads and trails, hiked, kayaked, swam in the river (we could cycle to) on hot days etc etc. Never thought we were missing anything, quite the opposite.
My small untouched share investments compounded hugely. As well as that, I only took 1/2 the dividends to live on, the outer half were reinvested as well,
A series of unfortunate events (aka mega bushfire) saw us buy an apartment in the city near the beach to get our heads stright just before covid lockdown, lived car free there etc , sold that 2 years ago and made a ridiculous profit, bought a place in a small rural village in the back of bumfuck for way less. No flood risk, no bushfire risk and it gets decent rainfall.
Now I have more money then I know what to do with...by that I don't mean I am a billionaire, I mean living frugally becomes a habit so my shares and income have grown and grown. I now donate 25% of my investmwnt income to charities, 25% is reinvested.and I.use the other 1/2 to live on.
My parter works 4 days a week for 6 months of the year, then has 6 months off completely. She wants her.own independent income etc
My only regret was not being brave enough about retiring earlier. I missed those years of freedom and wing get them.back. Am now 60.
Fellow Australian, I retired at 33, which was 10 years ago now.
It's crazy how quickly you adjust to living frugally, and spending any money just seems wasteful and unnecessary.
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If you had the money to retire at 30, your savings would be invested and on an average year your earnings would cover your expenses. You would have health insurance, so no worries there. The only catch is that you would have to keep your expenses at 65% of what you spend right now. Would you take it, or would you rather work a few more years for a better lifestyle and financial security?
We "retired" when my wife was 30 and I was 33. That was nine years ago.
As Australians, healthcare is free, so that wasn't a concern. (That being said, we also take out yearly travel insurance policies, which are surprisingly cheap compared to regular private insurance.)
That, not having kids (but we've met people who did a similar thing BECAUSE they wanted to spent time with kids), and living very frugally was what made it possible, and continues to make it possible. When we were working, after having paid off our small apartment, we could live on less than 20% of our combined income by being very tight.
The more you save, the more you can invest, and the less you'll need invested to sustain yourself. It's a positive feedback loop, and after three years of trying to be as frugal as possible, tracing every dollar, it became second nature.
After building our investments, our cost of living has gone up, but not by much. When you're building your portfolio, being extra stingy pays off greatly. We have been slow traveling non-stop for the last nine years, because the cost of living is cheaper in (almost) every other country, even when you consider paying for short-term rentals. Next year we'll hit 100 countries visited.
We've also done extra university courses, languages courses, and have a ton of hobbies. Even without work, there's not enough time in the day if you have an active mind.
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Damn, sounds like a dream
A dream with spiders.
