I DO NOT TIRE OF SPEAKING OF THIS.
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.
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.