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Life is short, retire early

When Can You Retire Early?

Financial Independence is the Highest Form of Wealth

The freedom to do what you want, when you want, with whom you want is the most incredible thing money offers that too often goes overlooked. The true currency of life, is time. Time is a currency you can only spend once, so be careful how you spend it.

When Can You Afford To Retire?
The dream of being able to wake up when you want and where you want is a luxury. Enjoying your free time after reaching retirement appears to be fading even for those earning above-average salaries.

You worked your whole life and you create a certain lifestyle for yourself. The goal for a good retirement in my view is "if you can retire today and maintain that lifestyle for the rest of your life, that's the time to retire. If you did not fly 1st class pre-retirement, you're not flying 1st class during retirement. If you flew 1st class before retiring, than you're going to miss it during retirement. It's a pretty simple formula. I would encourage anybody to live by that rule and you will be just fine.

"Once you can afford to stop working and maintain your current lifestyle, that's the time to stop working." I never heard anybody at the end of the game saying I wish I spent more time in the office. In latin they say Carpe diem which translates to seize the moment of opportunity. Retire early and make the last chapter in your life, the most fulfilling it can possibly be.

When your monthly passive income exceeds your monthly expenses, you are ready to retire. Finding passive investing solutions that are safe and sustainable are why we exist. Retirement.net is "Where investors come to retire early". You don't need to wait until your 65 to start enjoying life and you certainly don't need to be a millionaire to retire early.

What is financial independence?
Financial independence is having enough passive income that you no longer have to work for money. You become financially independent when your investments grow faster than your monthly expenses. Their are many ways to generate income using your money but most will not even beat inflation. 

Example: Suppose you buy $250,000 worth of bitcoin that grows at a rate of 20% annually, which equals $50,000 per year in growth. Assuming you sell only the profit.
If your expenses are less than $50,000 annually you are officially financially independent. You are generating more income than you spend annually.
You will not have to worry about running out of money during retirement.

To retire early you need to be certain that your savings will grow faster than your expenses. Compare asset classes and Bitcoin Track Record over 15 years.

Bitcoin was designed to beat inflation and grow faster than any other asset class over the last 14 years. It will continue to grow higher since only 21 million coins will ever exist and no more will ever be created. Around 25% of the Bitcoin supply have already been lost forever due to reasons such as getting lost, being burned, or seed phrases being forgotten, removing these coins from circulation. That means less than 16 million coins remain in circulation. The Bitcoin mining process was designed to get 2x as difficult every 4 years. At the same time more and more merchants are accepting Bitcoin as payment. Bitcoin adoption has even spread to large well known institutions such as Fidelity and PayPal. Many stock brokers will even allow you to buy or sell Bitcoin futures. That is what makes Bitcoin so unique. This is why Bitcoin will continue to increase in value.

What if you need more income...
Everyone has different income needs. Some people want to have a more lavish retirement and therefore will need to save more money. Some people want to retire as soon as possible and are more willing to cut back some expenses. The key to staying financial independent is how much money you spend. "The more you spend, the more you will need to save. The less you spend, the less you will need to save".

How much money do I really need in savings to retire?
If you spend $50,000 annually, you will need to save a minimum of $500,000 to retire. As a general rule, your savings must be at least 10 times your annual spending in order to retire using The Perfect Bitcoin Retirement Plan.

Is that really enough money?
Some people spend less and some people spend more monthly. 

Below are some options available to maximize your spending power:
* Invest more money into your Bitcoin portfolio
* Relocate to a more affordable city or country
* Supplement your income with Social Security, pensions or inheritance
* Downsize your home and lifestyle

How long does it take to reach financial independence?
An important factor to financial independence is your savings rate. The more you save, the quicker you can reach financial independence. Retirement is a number, not an age. Once you reach a certain number in the bank, working becomes optional. I personally retired at age 31 and you too can retire from anywhere.

How much do you spend monthly?
Either estimate your monthly expenses or use an automated approach like Mint.com or PersonalCapital.com. Both are excellent websites that allow you to link all of your accounts and pull your financial data automatically. The goal is to know how much you spent in the last 12 months. We can then assume that is how much you will spend each year going forward. Both websites cater to different needs. Mint.com is focused on budgeting and PersonalCapital.com is focused on investing. I suggest trying both websites and just use the one you feel most comfortable with.

Create a budget
Once you are tracking your spending, you should be able to easily identify where your money is going. Your objective is that you want to reduce your expenses so that your savings will cover your ongoing monthly expenses. 

How do you get started?
Before we get started, we're going to assume a simple scenario: 
1. You can calculate your monthly expenses using our simple templates
2. You have a crypto exchange account or can open a new account
3. You have existing liquid savings

3 Simple steps To start
1. The first step is to calculate your monthly expenses.
2. The second step is to copy The Perfect Bitcoin Retirement Portfolio.
3. The third step is to automate paying all your monthly expenses.

How much savings should you have saved for retirement? 
You probably can retire comfortably with much less than you think you need...
A big myth is perpetrated by financial institutions when they say you need to be able to replace 80% of your pre retirement income in order to retire. You can’t just place a percentage on it and be done. Once you retire your tax liability goes down, you no longer contribute to SS and Medicare through your paycheck, you don’t need to buy clothes for work, you don’t have to eat lunch out at work, you don’t have to commute to work, you don’t have to save for retirement, insurance may cost less based on property you still own and if you are Medicare eligible. The best way to figure out how much you need to retire is to add up all your mandatory monthly expenses such as mortgage, rent, food, utilities in order to just live. Then add in whatever amount per year you need for the fun things in life such as restaurants and trips. You need to remember that your mandatory monthly expenditures should include some money to put away for house repairs and unforeseen expenditures.

The amount you should have saved for retirement depends on various factors, including your age, lifestyle, and goals. Here are some general guidelines to consider:

Retirement goals: First, consider what type of retirement lifestyle you want. These factors will impact the amount you need to save. Do you plan to travel extensively, downsize your home, or work part-time? 

Retirement age: The age at which you plan to retire will also affect how much you need to save. If you plan to retire earlier, you will need to save more to cover your living expenses for a longer period of time.

Social Security: Social Security benefits can provide some income during retirement, but they likely will not be enough to cover all of your expenses. Consider how much you will receive in Social Security benefits and factor that into your retirement savings.

Current savings: Take a look at your current retirement savings and estimate how much you will have by the time you retire. If you are behind on savings, you may need to save more or invest now to catch up.

It’s important to remember that retirement savings goals are not one-size-fits-all. It’s always a good idea to consult with a financial advisor who can help you determine your retirement savings needs. 

Who are you?
This page is maintained by Avi Rosner. I was formerly an accountant and real estate investor who was successful in achieving financial independence by age 31. I created this site for investors interested in learning how to retire early using Bitcoin.


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What is financial independence?

Financial independence is having enough wealth such that you no longer have to work for money. You become financially independent when your wealth's assets produce enough income to cover your expenses.

For example: If you have $500,000 in assets and your assets produce $20,000 per year (4% of your total assets value) and your expenses for the year are $20,000 or less, then congratulations, you are now financially independent. Your assets are producing more income than you spend in a year.

But that's not enough money to live!
Everyone has a different financial independence number. Some people want to have a more lavish retirement and therefore will need to save more money. Some people want to retire as soon as possible and are more willing to cut back some expenses. The key to financial independence is how much money you spend. The more you spend, the more you will need to save. The less you spend, the less you will need to save.

How much money do I really need to save in order to retire?
You need to save at least 25 times your annual spending.
Why? In 1998, three professors at Trinity University released what is now called the Trinity study. The study looked at a number of different stock/bond mixes of portfolios and their withdrawal rates from 1925 to 1995 in periods of 15 to 30 years. The study concluded that if you withdrew no more than 3-4% of your investment portfolio every year, then it would be extremely unlikely that your portfolio would run out of money. Thus, from this study, 4% became known as the safe withdrawal rate.
Therefore, withdrawing 4% of your investment portfolio every year should cover your annual expenses. Since this is 1/25 of your portfolio, then as a general rule, your portfolio must be at least 25 times your annual spending in order to retire.

But is that really enough money?
Some people might be more conservative and go with a 3% withdrawal rate. That decision is up to you. However, keep in mind that the Trinity study did not assume the following:
* Adding more money to your portfolio:
* Continuing to work during retirement, such as an enjoyable side job or hobby
* Getting money from Social Security, Medicare, pensions or other windfalls
* Reductions to annual withdrawals:
* Spending less money when the markets are down
* Spending less money as you get older

With some of these assumptions in place, we do not have to be so conservative with our safe withdrawal rate and can use the standard 4% safe withdrawal rate.

How long does it take to reach financial independence?
An important factor to financial independence is your savings rate, which is how much of your income you can save. The more you save, the quicker you will reach financial independence. Assuming a net worth of zero, if you save 50% of your income, you can retire in 17 years. If you save 75%, you can retire in 7 years. If you can save 85%, you can retire in 4 years.

Where do I get started?
Before we get started, we're going to assume a simple scenario: you don't have an emergency fund, you have some sort of debt (credit card, student loans, house, etc.) and you have no investment accounts.

Track every dollar
Your first step should be to track every single dollar you are spending and earning. It will be very difficult to get a good grasp on your finances without knowing exactly what your accounts look like now and where your money is going. If you are looking for an automated approach, Mint.com is an excellent website to link to all of your accounts and pull your financial data automatically. However, I highly recommend using YNAB (You Need a Budget), which will require manual entry of every transaction in your accounts. Alternatively, you can manage this manual process with custom spreadsheets. I recommend doing this process manually (YNAB/spreadsheets) over automatically (Mint.com) as you will know where every dollar is going instead of being merely told where it went after the fact.

Create a budget and reduce your expenses
Once you are tracking every dollar, you should be able to easily spot where your money is leaking into unnecessary expenses. You should next create a budget, starting with a list of your essential expenses: housing, utilities, food, etc. Then starting listing your non-essential expenses: hobbies, alcohol, vacations, etc. Then you need to set aside a set dollar amount for each of these expenses, essential and non-essential, and try to not go over that monthly allotted amount.
Your objective is that you want to reduce your expenses such that your monthly income is greater than your monthly expenses. You will then take this left over money (income minus expenses) and place it into your soon-to-be created emergency fund, debts, investment accounts, etc. It is very important that you try to stick to your budget and to reduce and remove any expenses that are not necessary, at least temporarily until you are out of debt, if not permanently (if you wish to achieve financial independence sooner).

Create an emergency fund
An emergency fund is an important initial step to take. With your budget in hand, you should now know exactly how much your monthly expenses are. Now you need to save your excess monthly money (income minus expenses) into an emergency fund account. This account should be a cash account at your local bank or an online bank. The importance is that the emergency fund should be easily and quickly accessible during an emergency. Do not worry about trying to earn much interest on an emergency fund account. Think of it as a self-insurance against future unexpected expenses from emergency situations, such as non-regular car repairs or an emergency veterinary visit.
Start by saving up enough money to cover one month's worth of your budgeted expenses. With this money set aside, if something comes up in the near future, then you won't have to worry about adding more debt to your credit cards due to an unexpected emergency. Instead, you pay for that emergency with your saved cash on hand and then re-build your emergency fund for the next inevitable emergency down the road.
Once most of your debts have been paid off, you can expand your emergency fund to the typical recommended 3-6 months worth of expenses. The number of months to save is ultimately up to you and how risk averse you are. Some people save up to a year's worth of expenses (meaning they could possibly go without a job for up to a year!). I would not recommend more than a year's worth of cash in an emergency fund, as you will eventually be placing your excess saved money into an investment account, which is absolutely necessary to become financially independent.

Who am I?
This page is maintained by Abraham Rosner. I was formerly an accountant and hotelier who was successful in achieving financial independence. I created this site as a starting point for others who are interested in doing the same thing.

Disclaimer
This page is for educational purposes only.

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