A) Hence, the word: balance.After all the back and forth and numerous posts I think the message should be the following.
You have one life.
You have no way of knowing what can happen unexpectedly in the future. The future can be tomorrow or 20 years from now.
Enjoy your present life and save as much as you can for the future. 10 pct,30 pct, 28%, 9%, 20 %. It all adds up over time.
Getting obsessed with having to save x pct every month to retire at 50 or whatever may not be good for your health or your life in general.
It is always the other guy who has a stroke, a car accident, a divorce.
Kind of like the typical 65 year old couple who keep putting off that dream trip and now they are 71 and one spouse is no longer able to travel.
Hey if one enjoys living a spartan life go for it, but don’t do it for some dream of sacrificing for 25 years will lead to a blissful early retirement.
The correct saving rate could be 50% of your annual expense. 25% of your annual expense or 100% of your annual expense. Pick your number.
B) Please note the trade off too.
If your saving rate is 25% of gross income = 50% of your annual expense. It means you save 6 months of expense every working year. You should keep 6 months to 1 year of emergency fund before investing.
If you are unemployed in the first few years of your working life and you are unemployed long enough, you may not survive. You may say that you can count on your family. In that case, if the recession is bad enough, your family may be counting on you too.
C) Please do not assume only sunny days are possible. Aka, continuous full employment across 30 years over multiple recessions. This one will be a shock to many in the coming recession. The illusion of job security will be shattered.
D) I been through Houston Oil Bust, Texas Saving & Loan Crisis, Asian Currency Crisis, Telecom/DotCom Bust, 2008/2009 GFC, 2020 Covid crash. It always come as a surprise to someone that recession can actually affect their employment.
E) Good luck on the coming recession.
F) I will be laid off in a few months but I am retiring. Hence, it won't matter to me.
KlangFool
Statistics: Posted by KlangFool — Sun Aug 18, 2024 8:50 pm — Replies 264 — Views 19757