I DO NOT TIRE OF SPEAKING OF THIS.
Table Of Contents
I’ve been sharing FIRE and leanFIRE for years
FIRE meaning financial indepedencen, retire early….and it’s even more important today, in light of
- COVID-19 that up-ended the entire world
- Russian’s illegal invasion into Ukraine and terrorizing Europe and the world
- China’s extended zero COVID policy (and not keen to bring in “western” vaccines)
- the great resignation
- how so many companies shrunk and terminated so many employees
If you have started your leanFIRE journey for at least 10+ years:
- you’d have an overall lowered and leaner lifestyle of lower expenses
- you’d have amassed an amount of cash-paying assets, be it dividend stocks, REITs, rental properties etc
which would help to make you a little more resilient towards these sudden world changes past couple of year.
Mathematical assumptions
Assuming you’d been living off $2K/month (so total $24K/year) and investing $2K/month (so also $24K/year) into dividend stocks.
Assuming the dividends are 6% per year, and you reinvest every single dividend dollar, by the end of 10 years, you’d have: $335,319.42
Your dividends of 6% of $335,319.42 from year 11 onwards will be $20,119.16. Divided by 12 months, that’d be $1,676.60 dividends a month.
That’s not bad, if you’re “only” spending $2K/month, because $1,676 is “only” 16% short.
Is 16% short okay, Nigel?
I take an optimistic approach, because frankly, you’d already have 84% of living expenses sorted out with your dividend income. The shortfall is around $330 bucks. A MONTH.
ANY part time job or side gigs can cover that short fall, because you’re very close to leanFIRE / coastFIRE.
So yes, 16% short isn’t too bad in my books.
So even if I lose my job, I know and am assured that 84% of my expenses are sorted, I just need a little part time work to cover that shortfall. If I still have a job, I’ll keep investing $2K/month and reinvesting the dividends for a good 3-5 years (up to a buffer of at least $3K/month in dividends).
I’m the founder and writer here at NigelChua.com; as well as serial entrepreneur, therapy business entrepreneur, digital entrepreneur, investor and also happy husband, father and Christian.
Started and sold off a business for 7-figures; built another 7-figure one and growing it further, plus building/investing into other businesses and investments as well as advisory works.
Nowadays I share and teach entrepreneurship, financial independence, retiring early as well as building and living a life you love.
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