Four Ways To Quit The Rat Race

[bulltraderpt]

A chap talking about quitting the rat race, might be of interest to some here:


https://www.youtube.com/watch?v=Zz-dxV8VfPE

[vrdiver]

I watched it: 42 minutes that could have been reduced to 10. Whilst I liked the premise and his explanation of four different approaches to FIRE (Financial Independence Retire Early) I did have to wonder if he was being paid by the minute! (and no, I suspect he wasn't, but it did seem a bit drawn out...)

What it did do was throw up a youtube link to a presentation of "Your Money or Your Life" by the author of said book. Watching that, I realised that I have been doing the "9 step program" without ever reading the book: it's common sense if you actually desire financial independence more than getting one up on the Joneses...

In a nutshell:

Track your spending - all of it.
Convert £ into Hours of work required to acquire them
Take a long hard look at your spending: figure out what's not worth the hours of work
Reduce your spending armed with a better value criteria
Save money and invest so that compound returns works for you
Keep saving
Figure out what will be enough* (seriously, it's important to have a goal and know why!)
Figure out if you are on track to meet that goal in the time you have in mind (retire at 30, 40, 50...?)
Adjust savings / lifestyle / expectations / date accordingly

Not quite the 9 step program, but it worked for me. It also took less than 42 minutes for you to read, or the hour of video for YMOYL that I watched.

*Inflation: yes, it will happen, so work with "real returns" after inflation (so if you want investment return of 4%, recognise that you need to add inflation each year as you go along, so 4%+inflation%, but that can be updated annually: for planning, ignore inflation and treat expected returns as nett after inflation is deducted.)

VRD

[Urbandreamer]

I watched too.

Having read YMOYL and the TightWad Gazette there were no surprises there. Ross Mold of A. J. Bell also talks about the "cockroach" or permenant portfolio. So again no surprises. Not interested in creating a buisness to sell or a frugal old age.

However the next vid that turned up was Mr Money Mustache, which was a great talk.

https://www.youtube.com/watch?v=LfKaLQkTZfQ

Especially so as I'm currently listening to a book called "The 100 year life" which has the assumption that high levels of saving (above 16%) are simply impossible. Hence we must work and retrain for other jobs as the world changes, until we die.

He on the other hand works because he wants to and changes what he does when he looses interest, having saved enough to provide a comfortable investment income and simply working for pleasure. Similar to YMOYL, but with less emphasis on government bonds and far more fun.

BTW YMOYL is a Very dry and dusty read. Great stuff, but a real effort to read.

[Sunnypad]

I'm so glad to find this thread
I had a slightly surreal conversation with a friend last night

as many posters here know, I've been LBYM for years but also very fortunate to pay off a chunk of mortgage after lovely auntie passed away.

there's possible redundancies going on at my place. I don't mind redundancy, it's not my first choice as this is the best job I've had, but if I get a payment I will be fine.

I was out with a friend last night and over her £15 cocktails, (several) she was asking me if I could manage a couple of weeks on the projected redundancy before going for temp jobs.

I said to her not to worry as I have good savings. She doesn't save money at all - always updating the home, buying nice clothes, sees whatever show she wants to see.

It made me think again - people I've known going on 15 years now still find the concept of LBYM surprising. Even though I say to them all the time "no I can't join you at such and such, it's too expensive".

If I get the redundancy I'm going to look at freelance work next, I imagine that will make them have kittens!

anyway, interesting links here, always a very useful board.

[Sunnypad]

PS I've always seen any expenditure as "how many hours it takes to earn it".