Comment on How Much Do I Need to Retire? by Financial Slacker.
Because I have always focused more on growing income rather than minimizing expenses, I often think about “what might happen tomorrow.”
When you have a large expense hurdle, it’s hard to imagine building a passive income stream substantial enough to cover. So you tend to worry about maintaining the active income stream – the succes trap.
Sounds like you have already mastered the expense side and are focused on building the capital side.
Thanks for sharing.
Financial Slacker Also Commented
How Much Do I Need to Retire?
I have adopted the rule of thumb that you need 25x your annual retirement spending in order to retire and not risk running out of money. If you’re under 40, I would target 30x annual retirement spending.
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You nailed it!
Spending control is the key. Not only do you have more money to save and invest, but you get used to living on less.
As I started getting more focused on my personal finances, I kept coming back to my spending as the problem.
If spending is too high, it will be nearly impossible to save enough to retire at a reasonable age.
Thanks for the comment.
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That was my initial reaction as well. But as we developed everything, the dollar amount started to make more sense.
When I was a kid, my allowance was the same way. It wasn’t regular or consistent.
With our children, we are trying to build a link between work, pay, and priorities and in order for that to have significance, we set the dollar amount relatively high.
I expect that as they get older and start looking for typically part-time jobs, my children may realize that they can make more money with our “allowance” system than they can on the outside. I’m not sure if that’s a good thing or not, but I have a few years before I need to deal with that.