How To Retire In 10 Years (Starting With $0)

00:07:17
https://www.youtube.com/watch?v=ghJrLh40hi8

الملخص

TLDRThe video provides insights on how to retire early, focusing particularly on a timeline of achieving financial independence in 10 years. The speaker argues that saving is more crucial than merely having a high income. They elaborate on three steps: calculating your "Fu Number" for financial freedom using the 4% rule, determining your essential expenses, and using a retirement calculator to set saving goals based on various income percentages. By keeping expenses low while earning higher incomes, individuals can save significantly and invest wisely, leading to earlier retirement.

الوجبات الجاهزة

  • 💰 Focus on savings, not just income.
  • 📊 Calculate your Fu Number using the 4% rule.
  • ✅ Determine your essential baseline expenses.
  • 🧮 Use retirement calculators for projections.
  • 🚀 Aim for a 50-60% saving rate for fast tracking retirement.
  • ⚖️ Avoid lifestyle inflation as income increases.
  • 📈 Invest in stock markets for long-term growth.
  • 🏘️ Keep housing costs low, ideally under 30% of income.
  • 🍽️ Allocate around 10% for food expenses.
  • 💡 Consistency in saving leads to financial independence.

الجدول الزمني

  • 00:00:00 - 00:07:17

    The speaker addresses the common aspiration of early retirement and emphasizes that it's not just about income, but about how much money one saves. Despite many making six-figure incomes, many still live paycheck to paycheck, while others with lower incomes are able to save significantly. Transitioning to the first step, they introduce the concept of the 'Fu number', which is the amount of money needed to feel financially comfortable enough to leave a job. The speaker explains the 4% rule for withdrawing funds from investments without depleting savings, providing examples of annual income requirements to illustrate the calculations needed to determine this 'Fu number'.

الخريطة الذهنية

فيديو أسئلة وأجوبة

  • What is the 4% rule?

    The 4% rule suggests that you can withdraw 4% of your investment annually while allowing your portfolio to grow.

  • How do I calculate my Fu Number?

    To find your Fu Number, divide your desired annual income by 0.04.

  • What is lifestyle inflation?

    Lifestyle inflation occurs when individuals increase their spending as their income rises, often impacting their saving rate.

  • How much should I save to retire in 10 years?

    Aiming to save 50-60% of your income could allow you to retire within 10-11 years.

  • What is an essential baseline?

    An essential baseline is the minimum amount of income needed to cover basic living expenses like housing and bills.

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الترجمات
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التمرير التلقائي:
  • 00:00:00
    so I know a lot of you follow a lot of
  • 00:00:01
    these Finance content creators and they
  • 00:00:03
    always talk about retiring at an earlier
  • 00:00:05
    age sometimes you see people retiring in
  • 00:00:08
    their 50s some of them in their 40s and
  • 00:00:10
    sometimes even in their 30s so the
  • 00:00:12
    natural question for yourself is well
  • 00:00:14
    how can I retire at an early age or some
  • 00:00:16
    of you might ask yourself this very
  • 00:00:17
    popular question how can I actually
  • 00:00:19
    retire in 10 years starting with
  • 00:00:21
    absolutely no money so it really comes
  • 00:00:24
    down to these three steps now I do want
  • 00:00:26
    to preface by saying that if you want to
  • 00:00:28
    retire or become financially in
  • 00:00:29
    independent what really matters the most
  • 00:00:32
    is how much money you're able to save
  • 00:00:34
    contrary to what a lot of people believe
  • 00:00:36
    they think that their income is what's
  • 00:00:39
    important and it is of course in the
  • 00:00:41
    beginning but in the end of it all
  • 00:00:43
    what's really important is how much of
  • 00:00:46
    that money you can keep in your pocket
  • 00:00:48
    the reason I say this is that there are
  • 00:00:49
    so many people in America where they are
  • 00:00:51
    making six figures like $100,000 and
  • 00:00:54
    they're still living paycheck to
  • 00:00:56
    paycheck there are also a lot of people
  • 00:00:57
    making over $200,000 and they are also
  • 00:01:00
    living paycheck to paycheck I actually
  • 00:01:02
    know a lot of people like this where
  • 00:01:03
    they're making around1 to $150,000 a
  • 00:01:06
    year and they basically spend everything
  • 00:01:08
    I also know a lot of teachers who are
  • 00:01:09
    making 70 to $80,000 a year and they're
  • 00:01:12
    able to save 10 20 and sometimes even
  • 00:01:14
    $30,000 a year even though these people
  • 00:01:17
    make less money than these people who
  • 00:01:18
    make A1 or
  • 00:01:20
    $200,000 they are going to be much more
  • 00:01:22
    wealthy in the future because they have
  • 00:01:25
    financial literacy and they know how
  • 00:01:27
    much to keep in their pocket okay so
  • 00:01:28
    let's talk about step number number one
  • 00:01:30
    you want to First find your Fu number so
  • 00:01:33
    what is this Fu number essentially if
  • 00:01:35
    your boss were to come up to you one day
  • 00:01:37
    and were to ask you to do these
  • 00:01:39
    ridiculous things at your job because
  • 00:01:41
    you have a lot of money in your savings
  • 00:01:42
    and in your retirement accounts you're
  • 00:01:44
    able to say to your boss F you and leave
  • 00:01:47
    your job I'm just kidding don't ever say
  • 00:01:48
    that to your boss that's kind of mean
  • 00:01:50
    but you get the point so go ahead and
  • 00:01:51
    take some time right now to think about
  • 00:01:53
    what is the amount of money that you
  • 00:01:55
    feel comfortable having so that you are
  • 00:01:57
    able to finally leave your job right now
  • 00:01:59
    so I'm I'm guessing a lot of you don't
  • 00:02:00
    really know how to calculate that number
  • 00:02:02
    so don't worry I'm going to go through
  • 00:02:04
    some of the math right now first things
  • 00:02:06
    first you have to know what the 4% rule
  • 00:02:08
    is so assuming that you've been
  • 00:02:09
    following me for a while and you finally
  • 00:02:11
    open up your Roth IRA your taxable
  • 00:02:13
    brokerage account and you've been
  • 00:02:15
    investing in something like the S&P 500
  • 00:02:17
    the 4% rule basically states that this
  • 00:02:19
    is the amount of money you can withdraw
  • 00:02:21
    from your account and continue to let
  • 00:02:23
    your accounts grow over time so how does
  • 00:02:25
    this make sense well if you're investing
  • 00:02:27
    in the S&P 500 which typically grows
  • 00:02:29
    around 11 to 12% on average each year
  • 00:02:32
    you should theoretically be able to
  • 00:02:33
    withdraw up to 4% of your portfolio and
  • 00:02:37
    continue to let your accounts grow you
  • 00:02:39
    actually don't have to sell all of your
  • 00:02:40
    assets within your account what you can
  • 00:02:41
    do instead is only sell around 4% of
  • 00:02:44
    your assets in your account and withdraw
  • 00:02:46
    that amount okay so how do we actually
  • 00:02:48
    apply this number to ourselves well
  • 00:02:50
    basically you first want to see how much
  • 00:02:52
    money you need annually and then you're
  • 00:02:54
    going to divide that number by 04 and
  • 00:02:58
    yes I know there's another way to do
  • 00:02:59
    this where you can multiply by 25 but
  • 00:03:01
    essentially mathematically it's still
  • 00:03:03
    the same thing so if you're someone who
  • 00:03:04
    needs around $40,000 per year you can
  • 00:03:07
    divide that number by 04 meaning that
  • 00:03:09
    you need around a million doll to become
  • 00:03:12
    financially independent or retire if
  • 00:03:14
    you're someone who needs around $50,000
  • 00:03:16
    per year you can divide that by 04 which
  • 00:03:19
    means that you need around $1.25 million
  • 00:03:22
    or if you need a little bit more maybe
  • 00:03:24
    around $100,000 per year you can divide
  • 00:03:26
    that by 04 which gives you around $2.5
  • 00:03:29
    million so once we have this Fu number
  • 00:03:31
    we can then move on to step number two
  • 00:03:33
    step number two you want to find your
  • 00:03:35
    essential Baseline I talked about this
  • 00:03:37
    in my other video the other day and
  • 00:03:38
    basically your essential Baseline is the
  • 00:03:40
    amount of money that you need to pay off
  • 00:03:42
    all your bills like your mortgage rent
  • 00:03:45
    internet electricity and even cell phone
  • 00:03:47
    bill you typically want to spend at most
  • 00:03:49
    around 30% of your income towards
  • 00:03:51
    housing like your rent or mortgage
  • 00:03:53
    around 10% of your income for food like
  • 00:03:55
    dining and groceries or up to 10% of
  • 00:03:58
    your income towards bills like internet
  • 00:04:00
    and electricity okay so this is my
  • 00:04:01
    favorite part we can now talk about step
  • 00:04:03
    number three step number three you can
  • 00:04:05
    then put in some of these numbers into a
  • 00:04:08
    retirement calculator so I'm on this
  • 00:04:09
    calculator on networthify and I'm going
  • 00:04:11
    to say that my annual income is
  • 00:04:14
    $50,000 I'm also going to say that I'm
  • 00:04:16
    able to save 10% of my income meaning
  • 00:04:19
    that I'm able to save around $5,000 a
  • 00:04:22
    year I'm going to say that my annual
  • 00:04:24
    return on investment is around 10%
  • 00:04:26
    because that's what the S&P 500
  • 00:04:28
    typically gives and of course of course
  • 00:04:30
    I'm going to type in 4% for my
  • 00:04:31
    withdrawal rate because we're going to
  • 00:04:33
    use a 4% rule I'm then going to click on
  • 00:04:35
    crunch the numbers and see what we get
  • 00:04:37
    if I were to save around 10% of my
  • 00:04:39
    income I can retire in around
  • 00:04:41
    33.1 years this means I'm saving around
  • 00:04:45
    $47 each month but what happens if I
  • 00:04:48
    were to save not 10% of my income but
  • 00:04:50
    20% of my income how long would that
  • 00:04:52
    take me well I'm going to click on
  • 00:04:53
    crunch the numbers and let's find out I
  • 00:04:55
    can basically retire in around
  • 00:04:57
    25.2 years if I were to save 20% of my
  • 00:05:00
    income this means I would be saving
  • 00:05:02
    around
  • 00:05:03
    $833 per month okay so we can be a
  • 00:05:05
    little bit more aggressive now what if
  • 00:05:07
    we were to save 40% of our income let's
  • 00:05:10
    click on crunch the numbers and we can
  • 00:05:11
    find out if I were to save 40% of my
  • 00:05:13
    income it's going to take me around 16.3
  • 00:05:16
    years to retire and lastly let's change
  • 00:05:18
    this number to 60% and see what happens
  • 00:05:20
    if I were to save 60% of my income then
  • 00:05:23
    yes it's going to take me around 10.3
  • 00:05:26
    years to become financially independent
  • 00:05:28
    and if you scroll down all the way down
  • 00:05:30
    to this table right here you can see how
  • 00:05:32
    much of your net worth is going to grow
  • 00:05:33
    over the years and you can see that you
  • 00:05:36
    started from zero and as you are
  • 00:05:39
    contributing money into your brokerage
  • 00:05:41
    accounts you're investing into the S&P
  • 00:05:43
    500 by the time you are on your 11th
  • 00:05:47
    year you're going to have around
  • 00:05:50
    $583,000 and regardless of what your
  • 00:05:52
    income is 50 to 60% savings rate is
  • 00:05:55
    really the magic number if you're
  • 00:05:57
    starting off from zero even if you were
  • 00:05:59
    making $100,000 a year $150,000 a year
  • 00:06:03
    or even $30,000 a year if you can save
  • 00:06:06
    50% of that and be consistent with that
  • 00:06:08
    you should theoretically be able to
  • 00:06:10
    retire within 10 or 11 years the biggest
  • 00:06:12
    problem that I see with a lot of people
  • 00:06:14
    is that as they increase their income
  • 00:06:15
    maybe they get a promotion or maybe they
  • 00:06:17
    get some sort of bonus they go through
  • 00:06:19
    this thing called lifestyle inflation
  • 00:06:21
    and basically what that means is as they
  • 00:06:22
    make more money they typically want to
  • 00:06:24
    spend more money maybe they see their
  • 00:06:26
    neighbors drive a fancier car or maybe
  • 00:06:29
    they see their friend on social media
  • 00:06:30
    maybe get a larger house which kind of
  • 00:06:32
    prompts them and makes them want to also
  • 00:06:35
    upgrade their life but the whole
  • 00:06:36
    takeaway message here is that as you
  • 00:06:38
    increase your income and you can keep
  • 00:06:40
    your expenses low or relatively low the
  • 00:06:43
    margin of how much you make and how much
  • 00:06:45
    you save is going to increase over time
  • 00:06:48
    which gives you more opportunity to use
  • 00:06:50
    that money to invest in the stock market
  • 00:06:52
    which then ultimately leads you to
  • 00:06:53
    becoming financially independent much
  • 00:06:55
    sooner than you thought possible and if
  • 00:06:57
    you want to learn how to start investing
  • 00:06:59
    right now particularly with opening up a
  • 00:07:01
    Roth IRA as a complete beginner I'll put
  • 00:07:03
    a link somewhere on my face right now so
  • 00:07:05
    you can watch this video If this video
  • 00:07:07
    brought a lot of value to you I would
  • 00:07:08
    totally appreciate it if you could give
  • 00:07:10
    me a like follow or maybe even a comment
  • 00:07:11
    down below because it really does help
  • 00:07:13
    with the algorithm have a great day and
  • 00:07:14
    I'll see you guys all in the next video
  • 00:07:16
    bye everyone
الوسوم
  • early retirement
  • financial independence
  • Fu number
  • 4% rule
  • saving
  • investment
  • lifestyle inflation
  • retirement calculator
  • essential baseline
  • wealth building