And, of course, I am fully aware that a 4% withdrawal rate might not work for everybody and all the time. Just like MMM, I use 25 times annual consumption as the FI target. Like MMM, I use a 5% real (inflation-adjusted) annual return but I use monthly contributions, while MMM uses annual contributions. Just to warm up, letвЂ™s quickly replicate the results from the MMM blog post. LetвЂ™s get the computer warmed up and start calculatingвЂ¦ the initial CAPE ratio when starting to save) matter? So, in typical Big ERN fashion, I take an ostensibly simple problem and make it more complicated! bond weights) on the path to early retirement? How much does the equity valuation regimeВ (e.g. That got me thinking: Is the math really that simple? How sensitive is the savings horizon to different rates of returns? What happens if we use historical returns instead of one specific expected return assumption? How important is the asset allocation (stock vs. ThatвЂ™s because for every additional dollar we save we reduce the time to FI in two ways: 1) we grow the portfolio faster when we save more and 2) we reduce the savings target in retirement by consuming less. It details how frugality is able to slash the time it takes to reach Financial Independence (FI). Money Mustache articles is the вЂњShockingly Simple MathвЂќ post.

Shockingly simple math early retirement