How Much Money You Need to Retire Early

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I’m the first to admit, even though I’m the Millennial Money Honey, math is NOT my strength. 🧮So when I was reading about the formula to calculate your Financial Independence number—current net worth plus average savings rate factoring in taxes, wage growth, investment growth, withdrawal, and inflation—I was v overwhelmed. 😭

Thank goodness my math deficiency is made up by resourcefulness and ability Google. I found this handy dandy online Financial Independence Early Retirement calculator by Financial Toolbelt. 🧰There were quite a few out there, but as a designer, I’m a snob when it comes to resources with good design and functional usability. Other ones weren’t as easy on the eyes. 👀

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Above are my inputs based on what I think is my current savings rate, as well as a conservative estimate on my investment growth. As I’m currently tracking my savings rate from September-October, I might have to update if my actual rate is way off. But anyway, those numbers gave me these results:

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So this is saying I need $1,056,900 ($706K being my hard earned dollars, the rest from earnings) to be able to stop working and withdrawal at a 4% rate every single year until I die. This is great target number for me to aim for, it makes me a bit nervous since it’s saying my take home spending is $2,178/month.

Of course $2,200/month is easy to live off of now, but it doesn’t factor in kids, which I’d love to have. But I know when I “retire," I’m not going to give up working entirely for money, so hopefully me making even $20,000/year for fun will be enough keep me at ease.

Until then, I’m counting down the days until I’m 38 with $1M in the bank and I’ll be financially FREEEEE! (Hopefully I inspire at least one person to join me by then, so I’m not alone. Maybe that’s you? ;)

xo,

Catie

What is FIRE? My Journey to Financial Freedom!

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Dear Diary,

Just kidding! This is by no means a diary in the traditional sense. This is my personal money diary 📔 as a way for me to reflect on my journey to financial freedom and achieving a work-optional life.

Before I begin let me clarify what exactly financial freedom, often interchangeably referred to as financial independence, is.

Financial freedom is about more than having money…It’s about following your passion, making choices that aren’t influenced by your bank account, and living life on your terms.

– Robert Kiyosaki, Rich Dad, Poor Dad

I’m naturally a good saver, but after I read Robert Kiyosaki’s, Rich Dad, Poor Dad, it fundamentally altered my money mindset. It was definitely eye-opening to think about how a “rich” person thinks of money working for them versus a “poor” person think of working for money.

That lead me to calculate my own numbers on when I could become financially independent and retire early based on my current net worth and savings rate. Here is an easy financial independence calculator for you to do the math too.

This concept of retiring early is called FIRE (Financial Independent, Retire Early) and is a growing movement. Initially popularized on blog forums like Mr. Money Mustache, it’s slowly trickling down to places mainstream platforms Youtube and Instagram.

While I don’t exactly plan on retiring early, I want to be able to work on graphic design or other jobs that really fuel me and that I’d be excited to do even if the paycheck was $0.

I’m still a bit unsure of the exact number on the early side if I’m super thrifty (leanFIRE) but I know with certainty I can achieve it in 10 years (fatFIRE).

I’m so excited to be on this journey, to learn and grow too.

xo,

Catie

p.s. Here are my favorite books wealth building books: