Savings rate is so important. I try to save at least 50% of my income. If i really want to buy something, I make sure I earn that money from side hustles so it does not affect my savings rate.
I was saving an average of 70%. Didn't realize this until I started binge-watching a ton of RUclips videos on financing and budgeting. That's the ONLY thing I miss about not working full-time. Living beneath your means is a good thing. I don't feel deprived, and still have fun goofing-off with my friends. Great video BtB! Will be sharing this with my ex co-workers. ;-)
BeatTheBush Me (A super saver): You’re going to be working for a long time at that rate Super Spender: That’s ok, I really like what I’m doing Me: ... I really hope so
90% saving rate all my life, I'm an engineer like yourself, worth $3+ millions with house paid off, I'm 38, doing a work-from-home job, part-time, in design engineering just because I want to. My wife still works 1 day a week, and we have one child. I don't consider ourselves retired, but view the jobs as something to keep us occupied and having a purpose. I also trade options part-time to hedge, generate income, tax loss creations and asset acquisition. I'm thinking of taking a year off, buy a roof-top tent and take my small family on the road and drive everywhere in the States & Canada. I've watched many of your videos, I agree with many things you say, as that's how I think as well, esp on a recent video about why you paid off your mortgage early due to the change in tax code. Bravo to you. If you are ever in Austin, TX, let me know, I'd like to meet you in person.
What is most overlooked with FIRE is that as you get closer to your financial goals you feel more and more freedom. Don't necessarily retire, just leave a more stressful situation to do what you love and enjoy more. Money in the bank gives you a lot of options.
I am at a 55%savings rate making 80k/ year. I eat all organic and pretty much only purchase high quality food. If i were to lower the quality i could probably save more than 65% i just really like high quality food.
You wind up finding out that most of our spending is bs. I started saving and got addicted to see how much money you can save and invest. I'm sure not having to go to work must be awesome, I hope to get there someday soon.
Since graduating from college, I've managed to up my savings rate by approximately 10% per year. That puts me on pace for a 60% savings rate this year... but that's a tough task.
You’re financially independent, yes. But your youtube channel is most definitely work. I would call you semi-retired as best. FI and RE while related, are still two different concepts but most of the time one goes with the other. Me personally, I would like to hit FI but would continue to work, just not at my current position. FI would allow someone to test the market to find something that they would like to do while not having to worry about income source of paying everyday bills. If you try a few things and decide that work just isnt for you, at that point I would say you’re retired.
I disagree, retirement doesnt mean u have to sit all day do nothing. Retirement for me is doing things I want, when I want, how I want, exactly what BTB is doing.
Edge HODL retirement by definition is ceasing to work. For me, I would consider BtB’s YT channel as a job. But since he is FI, you could argue that its “just a hobby that happens to make money” Would you consider people that are on shark tank retired? Or singers or actors or athletes? They have millions of dollars of net worth and are probably financially independent (assuming their assets are managed correctly), but yet they are continuing to make money and also have the ability to do whatever they want
You're missing the whole point of the FIRE movement. It's all about the freedom of "choosing" to work and not being "forced" to work. Read Your Money or Your Life where the concept originated. EDIT 3/3/20: for example, I am actually an emergency physician and how I wish I already have achieved FIRE so I can choose NOT to work amid this COVID-19 outbreak in Seattle area … sigh
@@theChef1337 Yep, the goal of many people is FI. The idea of retiring and not working I think is wrong. As long as you are healthy, does not matter if you are 60s, 70s or 80s, you can do some kind of work, possibly part time when you get to "retirement" age, and are collecting from SS or drawing out of an IRA or 401k.
~60% save rate. Been working less than two years and have 60k net. Steady grinding. My job is great but a voice in my head from my future self wants me to quit and have a 6 month mini retirement. Go hike mountains, fish, and cycle around the US. The internal debate continues.
One of the best video channels to learn from. This video could not be more accurate and realistic. If more people would increase the savings rate and financial literacy would be a whole different story. My savings rate has been approximately on average 50% for the last ten years. Results /FIRE/ Thanks a lot for all your videos Beat the Bush. Enjoy the FIRE because it can be done!
@@BeatTheBush well they would depend on the income i.e a percentage of a very high income could be lower, it would also depend in one's expenses. The main factor that affects my saving rate is income not expenses, my expenses can't get much lower as I don't spend much money. I save 50% when my net income is roughly $3,000
People say you're supposed to make an average of 4% from passive investments (after inflation and taxes), but how can you find a risk free investment that pays you this much passively? The stock market is at all time highs right now, we can't just put our money there and cash out 4% / year with no worries of it correcting any minute. It might be a nice topic for a future video, if you can guide us on how to invest our money somewhere it's liquid, safe and pays that percentage consistently, so we can cash out enough money to pay for our expenses (or let the amount grow for a fatter future retirement).
Early retirement is possible, but some may view as selfish matter. When I was 21yrs old I had planned to retire by the age of 35. All of my calculations and investments all headed in the planned trajectory, it’s was perfect. The fact of the matter is falling in love and raising three kids later gave me a different perspective in life overall. It is not bad sharing the success in life especially when you can pass it down to the offspring you have a part creating.
The law of saving percentage income is hard to apply to lower income situations, as there is a baseline level of spending for survival (unless your spending is 0 for other reasons, chances are you are not working anyway). Someone with a 80k income can much easier save 75% of their income vs someone making 40k a year or less, especially if both have already maxed out their frugalness and say are living off similar burn rates (20-30k/yr)
BeatTheBush the intro threw me off, because you said retire early at any level of income. I guess I just dont see it possible at lower levels of income. Lets say a monthly income of $1500 or less take home a month, you would have to be extremely frugal at that level to survive and have any sort of savings. Most people at that level probably have debt and would barely have enough to pay the bills, let alone make extra payments to get out of debt or having any sort of savings.
Amusis for people living paycheck to paycheck, that 10% could mean paying the electric bill or skipping a few meals. But yes i do agree most people use excuses to not save. Perhaps it was rash of me to assume high percentage of low income earners would have debt
While I myself am not in this group, the point I am simply trying to make are some people are literally just trying to get by paycheck to paycheck, and while yes there is always room to save, realistically its just not practical for certain people to imagine “early retirement” while making minimum wage working 60 hours a week trying to support kids as a single parent. It just seems a little disconnected to say “Anyone can retire early just follow these steps its so simple!” rather I think it’s more realistic to say these are some steps that could be taken, your situation may vary, etc.
Hello, new subscriber here. Love all your advice and investment/retirement talks. 2 questions for you. 1. Now that you are semi retired, what does your portfolio assets consist of? Are you still heavily invested in equities or are you a lot more conservative with your investments? 2. In the event if a recession/bear market, will you need to lower your withdrawal rate each year until the market rebounds?
Would the savings rate be post-tax & payroll benifits or pre. I'm assuming people in the comments are saying the savings rate of their take-home pay check from work, not their gross pay.
I am 18 years old and I have a question. You know, I am about to leave high school, which is general. I need to choose university, which is focused. A) Should I opt for high income field like computer science, save 50+ % of my future incomes and then retire and work doing my passion. B) Or should I choose my passion right now which is low income and work doing my passion from the beginning? This is stuct in my mind and I feel like I can not move. Sitting behind computer coding and frustrated when my mind is traveling between ideas and seeking art. And at the same time trying to argue with myself that I need to do this first to enjoy my life later...
Are you confident you will make money if you choose your passion? Maybe you do not have proof or a track record. Then this means you have to take a risk as it may or may not pan out.
@@BeatTheBush Thank you for reply :) Well my parents, my teachers, generally adults keep telling me I should not go for arts. Also I need to admit I dont have a sense for what comfort and money is, so I am willing to risk it.
Just noticing your outro song is drastically louder than your normal volume while you're talking. I think it would have surprised many people. I think it's because your overall video volume is lower. I usually have to crank up volume when I come to your video from another channel...
I save about 35% between 401k contribution and employer match, as well as my brokerage account contributions. I hope to be in the 50% or higher category once daycare costs, and home renovation costs are not there anymore. Unfortunately, that will not be for another 3-4 years.
BeatTheBush I also forgot to mention that I already have other sources of passive income coming in each month. I receive VA disability and I have a fully paid off rental. I hope to expand the number of rentals I own over the next 5-10 years. I can retire at 50 pretty easily if I do that. Working until 65 would allow for me to grow my net worth into the low 8 figures.
Well done! Having accomplished FIRE, I would say that eliminating all forms of debt and having no mortgage are really the essential almost magic sidekicks to savings rate. As you pay down your mortgage you are also saving (by reducing future monthly living expenses, thus how much you need for FIRE) even though it doesn’t show on your 401k or brokerage account balance. Having no debt and no mortgage/rent automatically lower your burn rate without reducing your lifestyle. It’s a magical combination that raises your savings rate prior to retirement and lowers your expenses to maintain the same lifestyle after you retire! Even just 5 years working after you are totally debt free and used to living happily on less than half your salary can send your investments through the roof, setting you up for life!
What can derail early retirement is hyperinflation. With the increasing deficit, do you think investing in the stock market can keep up with inflation?
@@joevegas7443 Thanks Joe. There's probably a fair few far more educated people than me who agree with Schiff. The real answer is: I, and probably no-one knows! From my casual research I've formed the opinion stated in my previous comment, but I'm very open to changing it
You should admit that the reason you were able to retire after 10 years is because you never faced a 2008 financial crisis. Instead you jumped in at the most opportune time to make substantial gains i.e. incredible QE to infinity for the past 10 years. You should mention this rather than saying it depends on whether you're an engineer or Coffee barrister.
@@BeatTheBush If you say you make $100k, that's gross income, you probably have more like $75k to spend after taxes. Everyone would always say their gross if asked what they make. I just think it's important to indicate if income is gross or net when discussing savings rate.
The Problem is that to retire early is the cost of health insurance - I know a lot I mean a lot of people who cannot retire early due to health insurance cost
Is it possible your photo on the wall is near Meiji Shrine? (If so that would so eery because I took a photo there and it looks SO so similar to your portrait...)
Hi beat the Bush when you say you save 80% of your salary is that after tax or pre tax? As it would be impossible to save 100% of your salary when you have to pay taxes..
Francis, awesome content and vid!! Q: after maxing out 401k and ROTH, what is your go-to account for excess savings? Keep it liquid in a high rate savings or go the index fund route? I probably have 16 months worth of expenses in liquid savings. Thank you!
But you have to INVEST savings for the long haul if you expect to live decades after you retire! The 3% or 4% rule is useless if you don’t have your money invested properly at all times!
I've seen this type of chart shown many times on FIRE sites. However, I don't think it really incorporates your average persons goals. What I mean is I think it paints too rosy of a picture. For me I am saving around 40-50% of my income and it's difficult with a family of 4 to do this. I have to sacrifice a lot of things and I also haven't hit expenses like cars and college for my children yet, which might make it even more difficult. My end goal is to be able to live without sacrificing my lifestyle and to save at this high of a rate requires my "burn rate" is being artificially reduced by me. It's not he burn rate I want it's a burn rate I've forced myself to acquire to meet my goal. So, I actually need to save longer than the chart shows.
It makes it harder when you have a family and the only income earner. If its dual income then all of this may suddenly be much easier. Question is, is the average household dual income or not? Or half are and half not. You standard of living requires supporting a family which means you have higher expenses. Looks like you have to increase income instead to boost savings rate.
@@BeatTheBush I make roughly double the median U.S. income on my own. It was definitely easier when the misses worked too though. My main point though is just that I think most FIRE people purposely cut expenses as much as possible. But I expect to be able to live above these cut expenses when it's all said and done. I will still reach my goal, but being at double the median with a family I can definitely see the extreme difficulty some have saving in the lower income brackets.
@Amusis I don't have 4 kids. That wasn't the point anyway. You seem to have comprehension issues. I've never seen a FIRE individual not cut expenses. Like btb said in the video for example, 100/0. Or 90/10. Things like that aren't even realistic and no one could possibly live like that without extreme cost cutting whether they had 0 kids or 10 or by doctoring their numbers to exclude side income.
My allocations [50% saved + invest], [30% basic needs Car,hse,food ], [20% wants: movie, shopping, etc]. My investment reached Financial independence level, my saved + investment allocation adjust down to 20-30% level, so i can enjoy spending little bit more on needs & wants ..... time to enjoy the Mercedes
Please correct me if I am wrong, but your figures do not take into account any earnings on the money you are saving. Say you make 100k, save 25% and your savings earn 7% compounded year over year. That would reduce the time needed to comfortably retire.
@@FriskyDingo1983 Keep at it Gat! Our daughter has already graduated and working + we have zero debt, 10 years hard work made it possible for me to not work by age 50, im 53 now and work because I enjoy it
@@BaliBrit That's the goal for me. I don't mind working. I just want to be in a position where I can quit at any time when it no longer becomes enjoyable. I think that I can probably be there at 50 as well.
I think i've been overdoing my savings rate to a degree. I was probably saving 85% of my income for a while without realizing that i'm just lying around at home on the computer. I've dropped the savings rate down to like 70% and am enjoying some more events as of late. My job isn't that bad and it forces me to socialize a bit.
I agree, while I like to save and find activities that are not about spending money, I do enjoy going out and treating myself to a steak or catching a movie or sporting event. Speaking of that, it's off to the hockey game! ( but I will not buy overpriced food and drinks at the arena.)
I would say you are definitely retired early, your RUclips income notwithstanding. The only question is if you are planning to get married and have kids. Those piano lessons are expensive! I guess you would be ok with a like minded spouse, but with kids it will be difficult. I am sure you have thought about it... Also, achieving FI has been easier in the past decade because the market has been in a perpetual bull market. Back in early part of 2000s it would have been a huge challenge. The market dropped precipitously in 2001. Shortly after the market recovered, we had an even worse drop during the Great Recession. A lot of people have this false sense of confidence that the market will stay the way it for a long time. It gets really really scary when you hit 2009 type of drop and with investments as your only source of income it may unravel the plans.
My savings rate is 96.5425% earn 4k a month take home pay spend around 140$ per month live with parents and eat at restaurant where i work as a server life is cheap but your lifestyle is expensive stop trying to buy shit u dont need to impress someone you dont like because its stupid
are you happy? do you fill purposeful and fullfilled ? do you have loving friendships and relationships. i hope so because i really like you and enjoy your channel...get yourself a big dog (not a puppy, they are too much trouble) get a dog thats about 1-2 years old
I’m 25 and currently at 51% savings rate, it took a while to get to this point and a few bumps along the way. I’m saving up for a house hack so my monthly burn rate can go from $2,200 a month to around $1,600 a month. I should reach lean fire by 27 since I will build a in law unit for rental income financed by my cash.
You can get married and choose not to have kids. My wife and I are child-free by choice and are aiming for FIRE. Of course finding someone who doesn't want kids is difficult.
It depends how much money you make! If you own a home helps a lot so you don’t have to worry about rent increasing in the bay! I have 3 kids and can’t imagine life w out them 😊 would most likely be boring. We take a vacation to Disney, legoland ect at least once a year with out going broke or using credit cards to pay for the trips so yes it can be all done and still have money in the bank!
![Noob To Max With DRAGON REWORK In Blox Fruits [FULL MOVIE]](http://i.ytimg.com/vi/LnBMOinoOvA/mqdefault.jpg)
Savings rate is so important. I try to save at least 50% of my income. If i really want to buy something, I make sure I earn that money from side hustles so it does not affect my savings rate.
I was saving an average of 70%. Didn't realize this until I started binge-watching a ton of RUclips videos on financing and budgeting. That's the ONLY thing I miss about not working full-time. Living beneath your means is a good thing. I don't feel deprived, and still have fun goofing-off with my friends. Great video BtB! Will be sharing this with my ex co-workers. ;-)
FIRE people don’t want things they want freedom.
My savings rate is 60%
Nice! Listening to orders everyday is a bit like being a slave. At least they don't use whips.
BeatTheBush
Me (A super saver): You’re going to be working for a long time at that rate
Super Spender: That’s ok, I really like what I’m doing
Me: ... I really hope so
Dude I see you in the comments on all the videos I watch.
Casey Burns Investing is that 60% pretax? That’s really good. I save 63% take home, 47% pretax.
Increased spending usually does not correlate with increased happiness.
Increased saving definitely correlates with decreased stress.
90% saving rate all my life, I'm an engineer like yourself, worth $3+ millions with house paid off, I'm 38, doing a work-from-home job, part-time, in design engineering just because I want to. My wife still works 1 day a week, and we have one child. I don't consider ourselves retired, but view the jobs as something to keep us occupied and having a purpose. I also trade options part-time to hedge, generate income, tax loss creations and asset acquisition. I'm thinking of taking a year off, buy a roof-top tent and take my small family on the road and drive everywhere in the States & Canada. I've watched many of your videos, I agree with many things you say, as that's how I think as well, esp on a recent video about why you paid off your mortgage early due to the change in tax code. Bravo to you. If you are ever in Austin, TX, let me know, I'd like to meet you in person.
How do you do this? Did/do you live at home. Just wondering.
Thanks in advance.
Saving isn't a "cool" topic but you are right man, it is very critical.
=D Spend little and set it on auto never spending much.
What is most overlooked with FIRE is that as you get closer to your financial goals you feel more and more freedom. Don't necessarily retire, just leave a more stressful situation to do what you love and enjoy more. Money in the bank gives you a lot of options.
It sometimes makes you itch to get out of the office the closer you hard. To the point where it becomes hard to concentrate because you're so close.
Can you do a video what your asset allocations are?. How many percent in index fund, stocks, and bonds now when you are in retirement.
I am at a 55%savings rate making 80k/ year. I eat all organic and pretty much only purchase high quality food. If i were to lower the quality i could probably save more than 65% i just really like high quality food.
You wind up finding out that most of our spending is bs. I started saving and got addicted to see how much money you can save and invest. I'm sure not having to go to work must be awesome, I hope to get there someday soon.
Love a good savings rate math video!
=D
i am a really fan of BeatTheBush
i don't miss any video
Thank you! I must do better on my end with your support. =D
Since graduating from college, I've managed to up my savings rate by approximately 10% per year. That puts me on pace for a 60% savings rate this year... but that's a tough task.
You’re financially independent, yes. But your youtube channel is most definitely work. I would call you semi-retired as best. FI and RE while related, are still two different concepts but most of the time one goes with the other. Me personally, I would like to hit FI but would continue to work, just not at my current position. FI would allow someone to test the market to find something that they would like to do while not having to worry about income source of paying everyday bills. If you try a few things and decide that work just isnt for you, at that point I would say you’re retired.
100% agree. I strive to have enough money saved that I don't need to work if I don't want to.
I disagree, retirement doesnt mean u have to sit all day do nothing. Retirement for me is doing things I want, when I want, how I want, exactly what BTB is doing.
Edge HODL retirement by definition is ceasing to work. For me, I would consider BtB’s YT channel as a job. But since he is FI, you could argue that its “just a hobby that happens to make money”
Would you consider people that are on shark tank retired? Or singers or actors or athletes? They have millions of dollars of net worth and are probably financially independent (assuming their assets are managed correctly), but yet they are continuing to make money and also have the ability to do whatever they want
You're missing the whole point of the FIRE movement. It's all about the freedom of "choosing" to work and not being "forced" to work. Read Your Money or Your Life where the concept originated.
EDIT 3/3/20: for example, I am actually an emergency physician and how I wish I already have achieved FIRE so I can choose NOT to work amid this COVID-19 outbreak in Seattle area … sigh
@@theChef1337 Yep, the goal of many people is FI. The idea of retiring and not working I think is wrong. As long as you are healthy, does not matter if you are 60s, 70s or 80s, you can do some kind of work, possibly part time when you get to "retirement" age, and are collecting from SS or drawing out of an IRA or 401k.
I save 3k a month. Hell yess. More than half my income. I’m also more than half paid off on my house.
I think this is one of your best videos BTB.
Thank you!
~60% save rate. Been working less than two years and have 60k net. Steady grinding. My job is great but a voice in my head from my future self wants me to quit and have a 6 month mini retirement. Go hike mountains, fish, and cycle around the US. The internal debate continues.
One of the best video channels to learn from.
This video could not be more accurate and realistic. If more people would increase the savings rate and financial literacy would be a whole different story.
My savings rate has been approximately on average 50% for the last ten years. Results /FIRE/
Thanks a lot for all your videos Beat the Bush.
Enjoy the FIRE because it can be done!
*my saving rate is almost always above 20% unless I'm paying off debt*
For early retirement, it's almost required to get this above 50%.
@@BeatTheBush well they would depend on the income i.e a percentage of a very high income could be lower, it would also depend in one's expenses.
The main factor that affects my saving rate is income not expenses, my expenses can't get much lower as I don't spend much money. I save 50% when my net income is roughly $3,000
Thanks for giving us this perspective that we like to follow as well.
Thanks for watching!
I'm showing this video to my 7 year old son!!!!
I know this is off topic but I have been liking the background of your videos of late.
People say you're supposed to make an average of 4% from passive investments (after inflation and taxes), but how can you find a risk free investment that pays you this much passively? The stock market is at all time highs right now, we can't just put our money there and cash out 4% / year with no worries of it correcting any minute.
It might be a nice topic for a future video, if you can guide us on how to invest our money somewhere it's liquid, safe and pays that percentage consistently, so we can cash out enough money to pay for our expenses (or let the amount grow for a fatter future retirement).
Early retirement is possible, but some may view as selfish matter. When I was 21yrs old I had planned to retire by the age of 35. All of my calculations and investments all headed in the planned trajectory, it’s was perfect. The fact of the matter is falling in love and raising three kids later gave me a different perspective in life overall. It is not bad sharing the success in life especially when you can pass it down to the offspring you have a part creating.
Very true. Hopefully, you can retire early even with kids. It's harder for sure.
I save up to 90-95% per month. But I also do earn quiet a lot through my businesses (5-6 digits per month). So basicly I save 10-20 months per month.
That's some impressive numbers!
You're in a hotel somewhere huh? Signage and door closers.....oh Austin? It's very cool! I'm next in Houston?? :)
The law of saving percentage income is hard to apply to lower income situations, as there is a baseline level of spending for survival (unless your spending is 0 for other reasons, chances are you are not working anyway). Someone with a 80k income can much easier save 75% of their income vs someone making 40k a year or less, especially if both have already maxed out their frugalness and say are living off similar burn rates (20-30k/yr)
I thought I said that. I used earning 30k in the video.
I thought I said that. I used earning 30k in the video.
BeatTheBush the intro threw me off, because you said retire early at any level of income. I guess I just dont see it possible at lower levels of income. Lets say a monthly income of $1500 or less take home a month, you would have to be extremely frugal at that level to survive and have any sort of savings. Most people at that level probably have debt and would barely have enough to pay the bills, let alone make extra payments to get out of debt or having any sort of savings.
Amusis for people living paycheck to paycheck, that 10% could mean paying the electric bill or skipping a few meals. But yes i do agree most people use excuses to not save. Perhaps it was rash of me to assume high percentage of low income earners would have debt
While I myself am not in this group, the point I am simply trying to make are some people are literally just trying to get by paycheck to paycheck, and while yes there is always room to save, realistically its just not practical for certain people to imagine “early retirement” while making minimum wage working 60 hours a week trying to support kids as a single parent. It just seems a little disconnected to say “Anyone can retire early just follow these steps its so simple!” rather I think it’s more realistic to say these are some steps that could be taken, your situation may vary, etc.
Hello, new subscriber here. Love all your advice and investment/retirement talks. 2 questions for you. 1. Now that you are semi retired, what does your portfolio assets consist of? Are you still heavily invested in equities or are you a lot more conservative with your investments? 2. In the event if a recession/bear market, will you need to lower your withdrawal rate each year until the market rebounds?
Would the savings rate be post-tax & payroll benifits or pre. I'm assuming people in the comments are saying the savings rate of their take-home pay check from work, not their gross pay.
Hey BtB, love the channel. Have you done or plan to do a video going over your portfolio/allocations?
I would love to see video like that too!
I am 18 years old and I have a question.
You know, I am about to leave high school, which is general. I need to choose university, which is focused.
A) Should I opt for high income field like computer science, save 50+ % of my future incomes and then retire and work doing my passion.
B) Or should I choose my passion right now which is low income and work doing my passion from the beginning?
This is stuct in my mind and I feel like I can not move. Sitting behind computer coding and frustrated when my mind is traveling between ideas and seeking art. And at the same time trying to argue with myself that I need to do this first to enjoy my life later...
Are you confident you will make money if you choose your passion? Maybe you do not have proof or a track record. Then this means you have to take a risk as it may or may not pan out.
@@BeatTheBush Thank you for reply :) Well my parents, my teachers, generally adults keep telling me I should not go for arts. Also I need to admit I dont have a sense for what comfort and money is, so I am willing to risk it.
Wow! Great video, thanks.
Just noticing your outro song is drastically louder than your normal volume while you're talking. I think it would have surprised many people. I think it's because your overall video volume is lower. I usually have to crank up volume when I come to your video from another channel...
I save about 35% between 401k contribution and employer match, as well as my brokerage account contributions. I hope to be in the 50% or higher category once daycare costs, and home renovation costs are not there anymore. Unfortunately, that will not be for another 3-4 years.
35% is good but just know that will this means you will have to pretty much work until 65.
BeatTheBush agreed. That is why once the child care and home renovations are complete our savings rate will be closer to 60%
BeatTheBush I also forgot to mention that I already have other sources of passive income coming in each month. I receive VA disability and I have a fully paid off rental. I hope to expand the number of rentals I own over the next 5-10 years. I can retire at 50 pretty easily if I do that. Working until 65 would allow for me to grow my net worth into the low 8 figures.
Well done! Having accomplished FIRE, I would say that eliminating all forms of debt and having no mortgage are really the essential almost magic sidekicks to savings rate. As you pay down your mortgage you are also saving (by reducing future monthly living expenses, thus how much you need for FIRE) even though it doesn’t show on your 401k or brokerage account balance. Having no debt and no mortgage/rent automatically lower your burn rate without reducing your lifestyle. It’s a magical combination that raises your savings rate prior to retirement and lowers your expenses to maintain the same lifestyle after you retire! Even just 5 years working after you are totally debt free and used to living happily on less than half your salary can send your investments through the roof, setting you up for life!
Very educational. Thanks!
=D You're welcome!
High Income + High Savings Rate = Success
Which makes for a lot of confused people after you retire early.
Love your videos
If you own your home, you can really cut down most costs. Then you only pay for tax and utilities. With some solar panels, even less.
Good video. Cool drone video!
What can derail early retirement is hyperinflation. With the increasing deficit, do you think investing in the stock market can keep up with inflation?
Joe Vegas It will far, far exceed inflation in the long run if your fees are low and your portfolio is diversified 👍
@@georgec2894 Not according to Peter Schiff.
@@joevegas7443 Thanks Joe. There's probably a fair few far more educated people than me who agree with Schiff. The real answer is: I, and probably no-one knows! From my casual research I've formed the opinion stated in my previous comment, but I'm very open to changing it
Theres no saying retire early means 5-10 years, it's whatever timeframe that suits you. I'm planning 15-20 years for example from the age of 28.
'Early' is before 65. 5-10 years of work in a lifetime is considered extremely early.
My savings rate is about 30%
I aim to get to 50% and beyond.
You should admit that the reason you were able to retire after 10 years is because you never faced a 2008 financial crisis. Instead you jumped in at the most opportune time to make substantial gains i.e. incredible QE to infinity for the past 10 years. You should mention this rather than saying it depends on whether you're an engineer or Coffee barrister.
I don't save, I have no income. My human will provide for me forever.
Man discovered 🔥
Interesting way to look at it. Are taxes considered a part of spending? Or, is this after-tax income/spending?
I count take home when calculating percentages.
This video focused on the savings rate portion. If I add in inflation, taxes, etc, it'll get too long and complicated.
@@BeatTheBush If you say you make $100k, that's gross income, you probably have more like $75k to spend after taxes. Everyone would always say their gross if asked what they make. I just think it's important to indicate if income is gross or net when discussing savings rate.
The Problem is that to retire early is the cost of health insurance - I know a lot I mean a lot of people who cannot retire early due to health insurance cost
Very true. Better earn more money and not stop your earnings. But fake the early retirement by doing something you want to do.
It’s a sort of Dave Ramsey rule - it’s not how much you make, it’s about how much you keep.
Is it possible your photo on the wall is near Meiji Shrine? (If so that would so eery because I took a photo there and it looks SO so similar to your portrait...)
I have no idea, it's a hotel picture.
Beatthebush RUclips can’t last forever
Hi beat the Bush when you say you save 80% of your salary is that after tax or pre tax? As it would be impossible to save 100% of your salary when you have to pay taxes..
Passive income is a must for early retirement.
Make money while sleeping. =D
@@BeatTheBush since I have kids, I must worker harder...college funds, expenses, etc
My savings rate is 40% in Detroit, Michigan.
Francis, awesome content and vid!! Q: after maxing out 401k and ROTH, what is your go-to account for excess savings? Keep it liquid in a high rate savings or go the index fund route? I probably have 16 months worth of expenses in liquid savings. Thank you!
Austin ? Are you thinking about relocating out of Bay area ?
Did you move? The background place looks a different house than the usual
That is Jay Leno's financial strategy.
New vid from BTB!!!
=D
Living with parents in early career is a big deal to boost saving rate
You should use net numbers not gross
Question...
How's your live life? Is that important to you? Just wondering.
But you have to INVEST savings for the long haul if you expect to live decades after you retire! The 3% or 4% rule is useless if you don’t have your money invested properly at all times!
I've seen this type of chart shown many times on FIRE sites. However, I don't think it really incorporates your average persons goals. What I mean is I think it paints too rosy of a picture.
For me I am saving around 40-50% of my income and it's difficult with a family of 4 to do this. I have to sacrifice a lot of things and I also haven't hit expenses like cars and college for my children yet, which might make it even more difficult.
My end goal is to be able to live without sacrificing my lifestyle and to save at this high of a rate requires my "burn rate" is being artificially reduced by me. It's not he burn rate I want it's a burn rate I've forced myself to acquire to meet my goal. So, I actually need to save longer than the chart shows.
It makes it harder when you have a family and the only income earner. If its dual income then all of this may suddenly be much easier. Question is, is the average household dual income or not? Or half are and half not. You standard of living requires supporting a family which means you have higher expenses. Looks like you have to increase income instead to boost savings rate.
@@BeatTheBush I make roughly double the median U.S. income on my own. It was definitely easier when the misses worked too though.
My main point though is just that I think most FIRE people purposely cut expenses as much as possible. But I expect to be able to live above these cut expenses when it's all said and done.
I will still reach my goal, but being at double the median with a family I can definitely see the extreme difficulty some have saving in the lower income brackets.
@Amusis I don't have 4 kids. That wasn't the point anyway. You seem to have comprehension issues. I've never seen a FIRE individual not cut expenses. Like btb said in the video for example, 100/0. Or 90/10. Things like that aren't even realistic and no one could possibly live like that without extreme cost cutting whether they had 0 kids or 10 or by doctoring their numbers to exclude side income.
@Amusis well it's two kids but.... Ok lol maybe look up definition of a family 😂
@Amusis no but if you had any reading comprehension from my original posts you'd see that mine did.
My allocations [50% saved + invest], [30% basic needs Car,hse,food ], [20% wants: movie, shopping, etc]. My investment reached Financial independence level, my saved + investment allocation adjust down to 20-30% level, so i can enjoy spending little bit more on needs & wants ..... time to enjoy the Mercedes
How do you calculate your savings rate? Pre-tax income or after taxes income?
pre-tax
All savings rate numbers must be on post tax income else the math doesn't hold
Please correct me if I am wrong, but your figures do not take into account any earnings on the money you are saving. Say you make 100k, save 25% and your savings earn 7% compounded year over year. That would reduce the time needed to comfortably retire.
Inflation will take bits out of your savings fast
At what age did Francis retire?? Was it ever revealed?
27
No he's never said how old he is....I think almost 40. Been watching since he still worked.
@@ChrisMFlorida no waaaaay ..
@@jlina I'm surprised he's never revealed it. it's relevant when talking about FIRE
Expenses is the key to retire early. Income come in second.
hey did you get that hoarding situation under control
Save 86%
I wish I could do that. Wife and kids put a major dent in that goal.
The more the better. I'd say 80%+ is rockstar level and you'll be retired in 7 years or so.
@@BeatTheBush i tried retiring a few years ago n got board so I work about 6 months per year for fun + 86% saving:-)
@@FriskyDingo1983 Keep at it Gat! Our daughter has already graduated and working + we have zero debt, 10 years hard work made it possible for me to not work by age 50, im 53 now and work because I enjoy it
@@BaliBrit That's the goal for me. I don't mind working. I just want to be in a position where I can quit at any time when it no longer becomes enjoyable. I think that I can probably be there at 50 as well.
Does paying mortgage principal count in the savings rate apart from the 401k / IRA
It depends if you will live in it after retiring. It's like counting your home as part of your net worth or not.
Savings rate is calculated on Gross income or Net income?
Gautam Kabe Net I come in almost all cases. I live in Norway where tax is around 40%!
I would use net because gross will make it impossible to save 100% lol.
I think i've been overdoing my savings rate to a degree. I was probably saving 85% of my income for a while without realizing that i'm just lying around at home on the computer. I've dropped the savings rate down to like 70% and am enjoying some more events as of late. My job isn't that bad and it forces me to socialize a bit.
I agree, while I like to save and find activities that are not about spending money, I do enjoy going out and treating myself to a steak or catching a movie or sporting event. Speaking of that, it's off to the hockey game! ( but I will not buy overpriced food and drinks at the arena.)
Also, find deals. $5 Tuesday movie night at Marcus Theaters is a bargain.
I would say you are definitely retired early, your RUclips income notwithstanding. The only question is if you are planning to get married and have kids. Those piano lessons are expensive! I guess you would be ok with a like minded spouse, but with kids it will be difficult. I am sure you have thought about it... Also, achieving FI has been easier in the past decade because the market has been in a perpetual bull market. Back in early part of 2000s it would have been a huge challenge. The market dropped precipitously in 2001. Shortly after the market recovered, we had an even worse drop during the Great Recession. A lot of people have this false sense of confidence that the market will stay the way it for a long time. It gets really really scary when you hit 2009 type of drop and with investments as your only source of income it may unravel the plans.
I think getting married with kids will put a wrench in things. Market is high flying and people have to not rely on 30%+ gains a year.
2:06? Seriously, dude. Come on!
32% savings rate. 34 yrs old
Taxes makes it pretty damn hard
Idk any baristas who make $30k a year.
tsla went back up, did u buy back in?
Nope. I went to see some rockets instead. Pics on my Instagram.
@@BeatTheBush cool, look forward to the video on that :)
35% for the last 33 years.
That gives probably 10-15 years of savings? More if you invested it all that time.
That gives probably 10-15 years of savings? More if you invested it all that time.
Yes I did,. Over time it's amazing what the miracle of compounding will do.
What was your average annual rate of return?
Great vid. I thought I'm quite OK, but seems like it's just rookie number.
My savings rate is 96.5425% earn 4k a month take home pay spend around 140$ per month live with parents and eat at restaurant where i work as a server life is cheap but your lifestyle is expensive stop trying to buy shit u dont need to impress someone you dont like because its stupid
You should account for taxes in these examples it’s more realistic
I decided to keep things uncluttered with that because the point is still valid.
Are u going make telsa stock hit 1000 dollars per shares. Your next video. Oh no I regret selling my telsa stock
He still made $60,000!
Austin meetup!
Unfortunately, I didn't plan well for an Austin gathering so probably wont have one this time.
are you happy? do you fill purposeful and fullfilled ? do you have loving friendships and relationships. i hope so because i really like you and enjoy your channel...get yourself a big dog (not a puppy, they are too much trouble) get a dog thats about 1-2 years old
Yooo do a video reaction for jake pauls FFM?? it's so big rn everyone is talking about it
I tend to avoid these tabloid related news items.
Inflation tax
Wrong math
retire early to be all by yourself, all the time ? that's questionable.
Lol. Depends what you want to do with the time.
Sounds ok to me..
He might prefer his own company. Or meet someone in time.
Your clapping loudly randomly is very disruptive or whatever that pop sound is
I’m 25 and currently at 51% savings rate, it took a while to get to this point and a few bumps along the way. I’m saving up for a house hack so my monthly burn rate can go from $2,200 a month to around $1,600 a month. I should reach lean fire by 27 since I will build a in law unit for rental income financed by my cash.
Don't get married. Almost impossible to retire with a family.
You can get married and choose not to have kids. My wife and I are child-free by choice and are aiming for FIRE. Of course finding someone who doesn't want kids is difficult.
It depends how much money you make! If you own a home helps a lot so you don’t have to worry about rent increasing in the bay! I have 3 kids and can’t imagine life w out them 😊 would most likely be boring. We take a vacation to Disney, legoland ect at least once a year with out going broke or using credit cards to pay for the trips so yes it can be all done and still have money in the bank!
Charlie munger has kids and so did Warren Buffett. They were pretty good with money too
@@Proxinova - the key thing is NOT to get divorced.
@@stephenconnolly1830 yes indeed, I said till death do us part :)
Normally 80% but some months i can put away 90%
Nice!
FatFIRE 🤩
That's where its at!
But at what multiple do you reach fatFire? Twice the 4% rule? 2% ? x50
Yeah, but really infeasible for most people in this sad planet.