Reply to This Thread Comment (required) Name (required) Email (required, always hashed, never used nor published) Website (optional) Post comment Note that comments won't appear until approved. I just did a quick excel sheet, and the answer to that question that looks like around 24 years: year a savings rate of 0%) how long would it take to reach a 50% savings rate if you get a 3% raise every year and save it? It’s All Just Math Save 25x your expenses, invest it, and you should be able to withdraw 4 per year indefinitely Compounding is on your side Mr. For instance, if your income currently equals you expenses (i.e. Check out this chart:Ģ comments for The Math Behind The Shockingly Simple Math Behind Early RetirementĪt that point, I’m not sure it could be solved in a single equation, although I could see something along the lines of how long would it take you to reach a certain savings rate. Lastly, one nice thing about this math is that it isn’t linear - it has a nice curve to it. My guess would be either he had multiple interest periods annually (versus my one) or that fact that his assumption of 5% returns included being adjusted for inflation. Money Mustaches Shockingly Simple Math Hold Up Does Mr. His blog and early retirement story have been featured on ABC News, Market Watch, CBS News, The New Yorker and the recent Playing with FIRE documentary. Each row looks something like this: =A2-5 The former software engineer started blogging about his early retirement at 30. MMM is known within the Financial Independence Retire Early (FIRE) community for his cornerstone article The Shockingly Simple Math Behind Early Retirement. Let’s try plugging the numbers in to see if I get the same results Mr. Money Mustache, and thousands of readers pore over posts with titles like The Shockingly Simple Math Behind Early Retirement and Join the Cult. This explains why, if you’re able to save 100% of your income, then you can retire right now: you have no expenses! Adeney and his blog are known online as Mr. Money Mustache, retired at 30 years old after almost 10 years of work as a software engineer. Pete Adeney, more commonly known as the popular blogger Mr. Money Mustache’s Simple Math to Retire Early. 100% of your income = expense rate % + savings rate % And although the concept is simple, it also has some interesting math behind it that I’ll share in the next section.
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