Tag: retirementplanning

Curious About Crypto? Here’s What 10 Financial Experts Think

A photo to accompany a story about financial experts' advice for investing in cryptocurrency

Everyday investors are overflowing with cryptocurrency questions, according to the financial advisors hired to answer them.

There is clearly an “emotional euphoria that seems to be sweeping through the public around cryptocurrency,” says Frederick Stanfield, a CFP with Lifewater Wealth Management in Atlanta, Georgia.

But for the average person focused on retirement planning and financial stability, is it time to consider investing in cryptocurrency?

The answer is complicated, so we asked financial advisors for their crypto advice, and here’s what 10 of them are telling clients. In an emerging field with few set rules and norms, we discovered some universal truths that everyone should know before putting money in cryptocurrency.

First of all, financial advisors say a healthy dose of skepticism is a crucial place to start, and you should never invest in crypto if it takes away from other goals and financial fundamentals like paying off debt, building an emergency fund, or maxing out your retirement accounts.

As difficult as it may be, do not become seduced by the intrigue and allure of this new technology, says Stanfield. Instead, employ the same mindset you bring to your regular investment strategy.

Here’s what else the experts want you to know about cryptocurrency investing:

Be Prepared for Loss

As with any investment, financial gains are far from guaranteed with cryptocurrency investing. For some financial advisors, crypto looks more like a lottery ticket than an investment strategy.

That means you should only put in what you’re OK with losing. “On a spectrum between gambling and investing, I think it’s closer to the former,” says Matt Morris, principal advisor at Sanderling Finance in Columbia, South Carolina.

As a high-risk, high-reward investment, keep any crypto investments in perspective amid your broader goals and finances. As with certain types of gambling, “you have a high chance of losing it all, but a small chance of winning it big,” says Nate Nieri, a CFP with Modern Money Management in San Diego, California. “Just don’t gamble an amount that would burden your family or prevent you from achieving your goals” if you lost it all.

Steer Clear if You’re Risk Averse

If you’re risk averse, crypto isn’t the investment for you.“How well can you sleep at night knowing that this is an emerging asset class with high volatility? And if you were to wake one morning to find that crypto has been banned by the developed nations and it became worthless, would you be OK?” asks Stanield.

If you’re going to be constantly stressing about your crypto investment, or tempted to change your investments in light of the volatility that comes with crypto, then you’re better off putting your money in a more stable investment, according to Stanfield.

“I believe it is still in its infancy stage, and just like any new fund or IPO, there is a level of uncertainty about the future that I’m not ready to stomach,” says Alajahwon Ridgeway, owner of Ridgeway Wealth Management in Lafayette, Louisiana. “I believe it … is an unnecessary risk at this point for my clients to reach their financial goals.”

There’s also far less historical data available about cryptocurrency to help investors make informed decisions — unlike conventional ETF and index/mutual funds. Crypto investors face additional risk in the form of poor or inaccurate trade data, competition among fellow investors, theft, loss of wallet passwords, supply and demand issues, government regulation, and energy consumption concerns, says Chelsea Rude, a CFP at Rude Wealth Advisory in Olney, Illinois.

“Most importantly for investors, there is a lack of a well designed and tested way to value the assets,” Rude says. This means crypto investors are essentially going in blind, and subjecting themselves to the uncertainty that comes with any new business or investment

Know Why You’re Interested In the First Place

Some people see crypto as an emerging investment, while others see it as an interesting new global currency you can use instead of the U.S. dollar or other international currencies. But whether crypto has long-term staying power on either front is still uncertain.

“I strongly believe the vast majority of people who own crypto currency are doing so for all the wrong reasons and misunderstanding what they are truly buying,” says Ben Lies, chief investment officer at Delphi Advisers.

Many experts are concerned about people dumping their money into crypto without real understanding of the area. Do your own research, and make sure you’re thinking about your investment in the right way.

“Hype and excitement around the space are not reasons for inclusion into any portfolio, but I believe there are compelling reasons to consider cryptocurrencies,” says James Vermillion, owner of Vermillion Private Wealth in Lexington, Kentucky. “When discussing crypto with clients I emphasize education and understanding. It’s important to note that there are thousands of cryptocurrencies in existence and they are not created equally. Due diligence is important, just as it is when looking at stocks or other investment vehicles.”

Nieri warns those who see Bitcoin as a currency to think about what that means for investing. “I don’t typically trade or have a currency hedge as part of my investment strategy. Would you have ever thought about trading dollars for Euros as an investment? In order for Bitcoin to be a legitimate currency, the world’s governments would need to accept it as a global currency, something that has a remote likelihood,” Nieri says.

Keep Crypto In Its Place

Don’t rely on crypto investments for your retirement or overall financial strategy. Make sure the majority of your investment portfolio is made up of stable assets projected for long-term growth.

“What I am sharing for [my clients] to do is build their future financial pie with investments such as stocks and bonds. If there is extra money they want to play with, buying crypto is an option,” says Eric Powell, financial advisor and founder of the Future Mill.

Make sure your overall investment portfolio is predominantly made up of conventional investments like stocks and bonds, says Powell. But within any crypto investments you might have, experts recommend sticking with the big names.

“I personally do not go beyond Bitcoin and or Ethereum,” says Michael Kelly, a CFA at Switchback Financial in Madison, Connecticut.  “I feel those two have a bit more of an established base and feel the risk of other coins becomes too significant.”

By: Ryan Haar

 

Source: Curious About Crypto? Here’s What 10 Financial Experts Think | NextAdvisor with TIME

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Decentralized finance (commonly referred to as DeFi) is a blockchain-based form of finance that does not rely on central financial intermediaries such as brokerages, exchanges, or banks to offer traditional financial instruments, and instead utilizes smart contracts on blockchains, the most common being Ethereum.[1] DeFi platforms allow people to lend or borrow funds from others, speculate on price movements on a range of assets using derivatives, trade cryptocurrencies, insure against risks, and earn interest in savings-like accounts.[2]

DeFi uses a layered architecture and highly composable building blocks.[3] Some DeFi applications promote high interest rates[2] but are subject to high risk.[1] By October 2020, over $11 billion (worth in cryptocurrency) was deposited in various decentralized finance protocols, which represented more than a tenfold growth during the course of 2020.[4][2] As of January 2021, approximately $20.5 billion was invested in DeFi.[5]

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References

Braun, Alexander; Cohen, Lauren H.; Xu, Jiahua (May 2020). “fidentiaX: The Tradable Insurance Marketplace on Blockchain”. Harvard Business School. Retrieved 2021-01-05.

11 Ways To Save Fuel & Money In 2021

Following hefty fuel price increases this month – petrol by between 40c and 43c per litre, and diesel by between 54c and 55c a litre – cash-strapped and Covid-battered South African motorists have to find innovative ways to save fuel and money.

According to Bianca de Beer from Dialdirect Insurance: “An average increase of 48c per litre is steep on its own, but when coupled with the fact that a 60-litre tank already cost more than R800 to fill, this places a significant strain on motorists’ wallets.

 The good news is that with a few minor adjustments to your driving habits and with regular car maintenance, you can boost the fuel efficiency of your car by as much as 40%. If you fill up 48 times a year at roughly R900 per tank, a 40% reduction in fuel consumption could save you more than R17,000 a year.”

Dialdirect provides the following tips for better fuel economy:

1: Don’t skimp on servicing

A car can burn up to 30% more fuel if proper maintenance is not performed on a regular schedule.  With this in mind, make sure your car is serviced regularly. Things like worn spark plugs, worn rings, faulty injectors, sticky brakes, low coolant levels, dirty oil and dirty filters all add up to engine inefficiency which leads to increased fuel consumption.

2: Be wheel wise

Check your car’s wheel alignment. Bad wheel alignment causes more friction which takes more power to overcome and results in higher fuel consumption.

3: Keep tabs on tyre pressure: 

Check for underinflated tyres as these also increase resistance.

4: Use your AC sparingly

Use the air-conditioning only when necessary as it places additional load on the engine.

5: Remove unnecessary weight

Reduce the vehicle’s weight by removing unnecessary items and, if you mostly do city driving, consider driving with only half a tank of fuel.Five top motoring innovations of 2020From solar-powered cars to “see-through” bonnets, these clever ideas turned science fiction into realityGood Life1 week ago

6: Slow and steady wins the fuel economy race

Don’t speed. The gas-guzzling effects of “stepping on it” are well-known.

7: Avoid stop-start driving

Maintain momentum as far as possible by looking and planning ahead, flowing with traffic and timing your approaches to hills, traffic lights and crossings better.

8: Gear yourself for efficiency 

Drive at the lowest speed in the highest gear that the road and traffic conditions allow without laboring the engine.

9: Be tech-savvy

Many vehicles have economy settings to optimize performance, throttle response, ride height and so on for maximum fuel efficiency. Use them to your advantage.

10: Plan ahead

Do several tasks on one round trip as opposed to many shorter ones. This not only limits mileage and the amount of time it takes to get your chores done, but also keeps your vehicle’s engine running at optimal temperature.

11: Wait out the rush

Battling through traffic not only increases fuel consumption, but also wear and tear on your vehicle’s transmission and brakes.

De Beer said: “Saving on fuel by keeping your vehicle in shape and changing the way you drive may seem like a bit of a hassle, but if you increase your fuel economy by 40%, a tank that normally gets you 700km could get you close to 1,000 km. This translates to almost a tankful of savings for every two times you fill up.”

By : Motoring Staff

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Happy Retirees? Maybe Not Why Life Satisfaction Isn’t Necessarily ‘U-Shaped’ After All

Happiness, experts say, is U-shaped: generally speaking, we are happy/full of life satisfaction as young adults but, as we reach middle age, we become less satisfied, with a trough in one’s early 50s; from this trough we rebound to ever-increasing satisfaction levels as we age. It’s remarkable, really, considering the physical infirmities we face, plus financial worries, loss of loved ones, and more. What explains this? We become wiser and we are able to see all of life’s ups and downs with a greater sense of perspective.

But what if that’s not true?

A new working paper by Peter Hudomiet, Michael D. Hurd and Susann Rohwedder, researchers at RAND Corporation, suggests an entirely different answer: older individuals have greater life satisfaction because the less-satisfied folk have been weeded-out. And by “weeded-out” I mean that they’re dead or otherwise unable to reply, because the likelihood of dying is greater for those who have less life satisfaction. When they apply calculations to try to strip out this impact, the effect is dramatic: rather than life satisfaction climbing steadily from the mid-50s to early 70s, then remaining steady, they see a steady drop from the early 70s as people age.

Here are the three key graphs (used with permission):

First, life satisfaction plotted by age without any special adjustments:

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Life satisfaction by age, unadjusted
Life satisfaction by age, unadjusted used with permission

Second, the difference in mortality between the satisfied and the unsatisfied:

Mortality by age and life satisfaction
Mortality by age and life satisfaction used with permission

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And, third, the same life satisfaction graph, adjusted to take into account the impact of the disproportionality of deaths:

Life satisfaction adjusted for death rates
Life satisfaction adjusted for death rates used with permission

In this graph, the blue line represents the unadjusted outputs from their calculations, the orange line is smoothed, and the grey line adds in demographic, labor market and health controls, to strip out the impact of, for example, people in poor health being less satisfied and try to isolate the impact solely of age.

Here are the details on this calculation.

The data they use for their analysis comes from the Health and Retirement Study (HRS), a long-running survey of individuals age 51 and older at the University of Michigan, sponsored by the National Institute on Aging. It is a longitudinal study; that is, it surveys the same group of people every two years in order to see how their responses change over time, adding in new “refresher cohorts” to keep the survey going. The survey asks about many topics, including income, health, housing, and the like, and in 2008, the survey also began to ask life satisfaction, on a scale of 1 to 5 (”not at all satisfied” to “completely satisfied”).

One simple way of analyzing the data is to look at how life satisfaction ratings vary based on survey participants’ characteristics. The average reported life satisfaction of those between ages 65 – 74 is 3.91, just slightly below “4 – very satisfied.” But those who rate their health as “poor” average out to 3.13, or not much more than “3 – somewhat satisfied,” and those who rate their health as “excellent” average to 4.34. Those who have 2 or more ADL (activities of daily living) limitations some out to an average of 3.32 vs. 3.97 for those with no such limits. Those who are in the poorest quarter of the survey group come out to 3.7 vs. 4.07 for the wealthiest quarter. (See the bottom of this article for the full table; this table and the following graphs are used with permission.)

But here’s the statistic that throws a monkey-wrench into the data:

“On average, the 2-year mortality rate [that is, from one survey round to the next] is 4.4% among those who are very or completely satisfied with their lives, while it is 7.3% (or 66% higher) among those who are not or somewhat satisfied with their lives.”

As a result, “those who are more satisfied with their lives live longer and make up a larger fraction of the sample at older ages.”

Now, this does not say that being pessimistic about one’s life causes one to be more likely to die. Nor does it say that this pessimism is justified by being in ill-health and at risk of dying. But this statistical connection, as well as further analysis of survey drop-outs for other reasons (such as dementia) is the basis for a regression analysis which results in the graph above.

What’s more, the original “inventor” of the concept of the life satisfaction curve, David Blanchflower, published a follow-up study just after this one. One of their key concepts is the notion of using “controls” to try to identify changes in life satisfaction solely due to age rather than changes in income over one’s lifetime, for example, or other factors, and there has been extensive debate about whether or to what degree this is appropriate, given that the reality of any individual’s life experience is that one does experience changes in marital and family status, employment status, and the like.

Having received pushback for this concept, they defend it but also insist that the U-shape holds regardless of whether “controls” are used or not. At the same time, Blanchflower is quite insistent that the “U” is universal across cultures, though (see my prior article on the topic) it really seems to require quite some effort to make this U appear outside the Anglosphere, which is all the more interesting in light of the John Henrich “WEIRDest people” contention (see my October article) that various traits that had been viewed by psychologists as universally-generalizable are really quite distinctive to Western cultures and, more distinctively, the United States.

But here’s the fundamental question: why does it matter?

On an individual level, to believe that there is a trough and a rebound offers hope for those stuck in a midlife rut. It’s a form of self-help, the adult version of the “it gets better” campaign for teenagers.

On a societal level, the recognition of a drop in life satisfaction for the middle-aged might be explained, by someone with the perspective of the upper-middle class, as the result of dissatisfaction with a stagnating career, failure to achieve the corner office, the challenge of shepherding kids into college, and the like. In fact, when I wrote about the topic two years ago, that’s how the material I read generally presented the issue.

But Blanchflower’s new paper recognizes greater stakes: “These dips in well-being are associated with higher levels of depression, including chronic depression, difficulty sleeping, and even suicide. In the U.S., deaths of despair are most likely to occur in the middle-aged years, and the patterns are robustly associated with unhappiness and stress. Across countries chronic depression and suicide rates peak in midlife.” (In the United States, among men, this is not true; men over 75 have the highest suicide rate.)

And what of the decline in life satisfaction among the elderly?

The premise that the elderly become increasingly satisfied with their lives as they age is a very appealing one, not just because it provides hope for us individually as we age. It serves as confirmation of a more fundamental belief, that the elderly are a source of wisdom and perspective on life. Although it is Asian cultures which are particularly known for veneration of the elderly, the importance of caring for those in need is just as much a moral imperative in Western societies, even if without the same sense of “veneration” or of valuing them to a greater degree than others in need.

Consider, after all, that the evening news likes to feature stories of oldsters running marathons or competing in triathlons or even just having a sunny outlook on life; no one likes to think of the grumpy grandmother or grandmother from one’s childhood as representative of “old age.” In this respect, “old folks are more satisfied with life” provided an easy to make the elderly more “venerable.” Hudomiet’s research might force us to think a bit harder.

As always, you’re invited to comment at JaneTheActuary.com!

Full table of impact of demographic characteristics on life satisfaction:

Impact of demographic characteristics on life satisfaction
Impact of demographic characteristics on life satisfaction used with permission

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Elizabeth Bauer

Elizabeth Bauer

Yes, I’m a nerd, and an actuary to boot. Armed with an M.A. in medieval history and the F.S.A. actuarial credential, with 20 years of experience at a major benefits consulting firm, and having blogged as “Jane the Actuary” since 2013, I enjoy reading and writing about retirement issues, including retirement income adequacy, reform proposals and international comparisons.

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Wes Moss Money Matters

So, are you setting yourself up for true happiness as a retiree? Sure, you’re planning the money piece, and that’s important. But, there’s also the personal piece of the retirement equation that’s just as important as the money part. Read more: https://www.wesmoss.com/news/7-skills… The 4% Rule: https://www.wesmoss.com/news/the-new-… Retirement Calculator: https://www.yourwealth.com/retirement… Send me your questions directly at https://bit.ly/3dPKcvd (contact box in top right corner) You Can Retire Sooner Than You Think https://bit.ly/3kiRhXJ Money Matters with Wes Moss podcast https://spoti.fi/3jk9wL8 or on Apple Podcasts https://apple.co/3kwKvhj Twitter: https://bit.ly/2HqnWfe Facebook: https://bit.ly/3kvrHi4 Check out my website for more financial tools and articles: https://bit.ly/3dPKcvd Please note, this information is provided to you as a resource for informational purposes only and should not be viewed as investment advice or recommendations. Investing involves risk, including the possible loss of principal. There is no guarantee offered that investment return, yield, or performance will be achieved. There will be periods of performance fluctuations, including periods of negative returns. Past performance is not indicative of future results when considering any investment vehicle. This information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax, or investment advisor before making any investment/tax/estate/financial planning considerations or decisions.

What Employee Benefits Will Help You Retire With Confidence?

I’m sort of a geek when it comes to retirement planning surveys. I’m always looking for nuggets that are going to help people save more.

Although I know this is a perilous time for employment in general, it’s always essential to know how your employer will help you save for retirement.

“The pandemic has put pressure on the American workforce in ways few could have predicted and employees need support more than ever,” says Jonathan Bennett , head of Group Benefits at The Hartford. “Now is the perfect time for employers to address employees’ changing attitudes about benefits.”

What should you be looking for in terms of retirement-friendly benefits? Here’s what a Hartford survey found in terms of perks of “increased interest”:

  • Employee assistance programs. 
  • Student loan repayment plans.
  • Behavioral/mental health services. 
  • Wellness benefits 

While these benefits may not appear to directly put money into your nest egg, they will help you get there. If you can get help paying for college loans, parental assistance or out-of-pocket medical bills, that will certainly free up more money for retirement savings. Recommended For You

Of course it’s up to employers whether they want to boost your benefits package. If in a job transition, you can seek employers that offer these perks. If you’re staying put, though, it doesn’t hurt to ask your HR department if they can improve their offerings.

John F. Wasik

John F. Wasik

I speak and write about innovation, investor protection, employment, money management, economics, college financing, retirement and social issues. My latest book is “Winning in the Robotic Workplace,” a guide to prospering in the age of workplace automation. I’ve also written”Lightning Strikes,” a biography on the great inventor Nikola Tesla. All told, I’ve written 18 books including “Keynes’s Way to Wealth” and “The Debt-Free Degree.” I’ve also been a contributor to the New York Times, The Wall Street Journal and other global publications. I’ve appeared on CNN, FOX, NBC, MSNBC, NPR, PBS and radio stations. I’ve spoken across North America.

FIRE Financial Strategies:How Much is Too Extreme When Saving for Retirement

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It’s not just the younger generations that are failing at retirement planning in Europe, the U.S., and elsewhere;  older generations are equally in trouble. Saving for retirement may be difficult right now for those who’ve been effected by the global health crisis, or more generally for those with sizable debt. But there is a growing segment of the population that’s gearing itself, or at least the possibility, to retire in their 40s.

How is it possible for someone to retire in their 40s when so many people are struggling with retirement savings? One answer is the FIRE movement.

FIRE explained.

FIRE stands for financial independence and retiring early. The movement inspires people to live a conservative life to achieve early retirement and financial freedom. The primary intent behind the campaign is to help people escape the dogma of routine work life, financial strain, and worries by following a series of predefined steps.

It’s a lifestyle optimization movement that prioritizes living under your means while saving a significant part of your income for the future. Some may even call it a glorified financial goal that includes smart investing and spending choices.

The most straightforward formula is to save up to 25 times your annual expenses, so if you earn $100,000 and can survive on $45,000, your goal should be to save $1.125 million to become financially independent. Once you reach this goal, you can start distributing 4 percent of the entire savings fund annually, adjusted for inflation only.

If that sounds difficult, let’s divide it into simple, actionable steps.

Eliminate high-interest debt. The first step is to eliminate any kind of high-interest debt. It includes credit card debt, personal loans, and even student debt. The reason for doing so is that interest payments eat away your savings, thereby prohibiting long-term accumulation of capital gains.

You can choose among a variety of techniques to pay off debt, including the avalanche method, snowball method, or similar strategies.

However, if you’re using a low-interest debt, such as mortgage loans, to boost your income or generate rental money, you can keep that loan.

bitmax2

Reduce your expenses. The FIRE strategy is designed across the principles of conservative spending. Optimize your lifestyle for minimum costs and let go of an inflationary lifestyle.

Here is what you can do:

  • List all your necessities, such as rent, grocery payments, essential utilities, and internet connection.
  • Create a list of all the lifestyle expenses, or wants, desires, such as eating out, watching movies, takeaways, streaming subscriptions, cable TV, etc.
  • You have to cut most of your expenses from the second list, inflationary expenses, to boost your savings. Start slowly and gradually move towards eliminating these costs.

Find ways to boost your income. The FIRE strategy requires you to maximize your savings for a set number of years, which means you have to find different ways to increase your income. This might be more difficult lately as a result of the health crisis, but its what’s necessary for the big picture.

Are you able to take on an additional project? Can you take a part-time job? Is it possible to generate extra income through part-time freelancing? Boosting your income allows you to reach your financial goals sooner than planned.

Maximize your savings rate. Having a high savings rate is essential for the entire strategy to work. By minimizing your expenses and boosting your income, you should be able to achieve a high savings rate. People covered under the stories we cited earlier in the post achieved a savings rate of 50 percent or even higher, but that’s not necessary for the FIRE strategy to work.

Calculate your own figures and target a savings rate accordingly.

Invest in tax-advantaged accounts. Always try and invest in tax-advantaged accounts to minimize your taxable income. Start by maxing out your retirement plans, and if you have freelance income or an opportunity to contribute more, do it.

Also, take the maximum benefit of alternative saving options such as a health savings account or flexible spending account offered by your employer.

Invest money for regular income. Investments made under the FIRE strategy follow a conservative approach, which means investing in low-cost financial instruments instead of trying complicated investment techniques.

However, it is critical for your money to beat inflation for this strategy to work. Pay special attention to your asset allocation. If you aren’t confident about your investment allocations, feel free to contact an expert for a custom investment solution. Some successful FIRE strategy followers even recommend adding real estate to the investment portfolio, providing consistent rental income.

Following these steps religiously can allow you to achieve financial freedom sooner than traditional retirement. You no longer have to work to pay for your necessities. You’re free to pursue the dreams that you wanted to follow before starting this journey.

Unlike popular belief, you don’t have to retire or quit your job. You simply have the financial freedom to do so at any time you want. Similarly, you can start working on a hobby that offers both satisfaction as well as income.

The problems with FIRE strategy.

Yes, the measures defined by the FIRE strategy can be extreme for most people. That said, FIRE isn’t for everyone. Here are some of the obvious drawbacks:

  • Not a realistic strategy for people who have considerable debt: The ability to save considerable amounts of money can be impossible for those who have sizable household debt.
  • Requires drastic lifestyle changes: Frugality and minimalistic lifestyle are critical for FIRE strategy to work. Several people will find it difficult to adjust to these new changes.
  • There’s financial risk: In the case of a market crash or loss of your investment capital, you’re under a massive financial threat. There are examples of people who were able to achieve financial freedom only to lose a significant portion of their investments during downward market cycles.
  • It involves financial uncertainty: Not everyone has the financial skills to plan for years of expenses, especially emergency costs or unexpected medical, maintenance bills. A high level of financial uncertainty could be a problem for families relying on consistent income.

Taking a hybrid approach to financial freedom.

Now that you have seen the cons of FIRE strategy, do you still want to follow it or give it all up? Well, you don’t have to do either, as there are multiple variants of the FIRE strategy that might suit you better.

  • Lean FIRE: This is the basic FIRE strategy, which is contingent on you making substantial lifestyle changes and lowering your annual expenses. There is a possibility that you may have to relocate to a low tax, cheaper state to achieve, sustain financial freedom.
  • Fat FIRE: This variant of FIRE is built around providing financial independence to an individual or family without making significant changes in their current lifestyle. Fat FIRE strategy takes comparatively longer to execute but follows the same steps as that of a lean FIRE strategy.
    • Example of Fat Fire: If a family is comfortable with a lifestyle that costs around $70,000 annually, they need to save $1.75 million in their fund to continue withdrawing 4 percent annually.
  • Barista FIRE: Barista FIRE is somewhere between lean Fire and fat FIRE strategies, as it requires you to either have one of the spouses working full-time or part-time (depending on profession) through the rest of his or her life. Barista FIRE takes into account factors such as getting health coverage through your spouse or working enough to qualify for health coverage or similar benefits. Some companies would offer medical coverage to employees working 20 hours or more.

To keep it simple, Barista FIRE might be the most ideal out of these variants. Let’s find out a little more about this strategy.

You enjoy a semi-retired lifestyle. You only have to work part-time, giving you ample time to relax, spend time with your family, and pursue any interests. It’s the best of both worlds.

Portia Antonia Alexis

By:

Source: https://www.entrepreneur.com

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Saving for retirement is a race against time. You need to max out your contributions while you are young and use the power of compound interest in your favor. The goal is to have 10 times your annual salary saved up before you retire, according to Fidelity. Watch this video to find out what milestones you need to reach to get to your goal.
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