Two people.
Same salary.
Same savings rate.
One starts at 25, one at 30.
The gap at 45 will surprise you.
Adjust the sliders to run your own numbers:
starting salary
$75,000
savings rate
25%
start at 25 → age 45
—
start at 30 → age 45
—
assumes 10% annual return (historical S&P 500 average), 3% annual salary growth, contributions made at start of each year
Sure, we can debate about the 10% annual return, the 3% salary growth, and the reality of both, but the fact remains that achieving FIRE is entirely possible.
And it’s obviously much better the earlier you start. The chart speaks for itself there.
Compounding is the closest thing to magic in personal finance.
Is FIRE worth pursuing? I say, why the hell not?
Even if you miss, at least you’ll miss big. You’ll be better off than 99% of people.
And the habit of saving and investing early is a skill that you’ll carry forever, whether you are making $30K or $300K.
Already over 30? It doesn’t matter. It is never too late to start!
It doesn’t matter what age you are –> taking the big leap to START is something you will never regret.
Totally on board with that. I didn’t start until I was 30 (now 35 and with 2 kids) but I am so glad that I did. It definitely gives me way more peace of mind with FU money even though I still have a bit to go. Living down in Colombia has definitely helped us boost our savings rate though.
As always, thanks for your content, I haven’t missed reading one yet. 🙂
You are still much earlier than most!
How do you like living in Colombia?
Thanks for reading!