The Mad Fientist writes about financial independence and early retirement, with a focus on US tax strategies and retirement accounts.
HN links it for early retirement tactics such as HSAs as retirement accounts and tax-loss harvesting, as part of recommended FIRE reading.
/r/personalfinance has some solid stuff in their sidebar/wiki.
I'm big into Financial Independence as a concept and community, so I'm partial towards that. Some recommended reading (some which you may like and some you may not):
- /r/financialindependence sidebar/wiki
- https://www.mrmoneymustache.com/ - Bit more radical on the frugality side but a personal favorite
- https://www.madfientist.com/ - Podcast and blog. Bunch of stuff on tax advantaged vehicles
- Your Money Or Your Life - Incredible book (foreward by MMM referenced above)
- YouTube/general searching for investment vehicles. Big ones in the US are: 401k, IRA vs Roth IRA, 403b, 529 (if you have kids). Tax advantaged accounts have huge benefits, so definitely understand them. Only takes a little bit to read about the ones I listed.
- Dave Ramsey - Love him or hate him, if you really struggle with money and debt on a fundamental level, he has good advice. His advice isn't optimal for everyone if you don't have issues with debt, but something to consider.
- Depends on how you want to invest. A lot of people (myself included) are pretty straight forward with index funds and diversify in different types, such as US vs international or maybe a variety of focus on industry. Do you research and figure out what's best for you, but index fund investing is pretty safe and easy.
Some personal advice:
- Spend less than you make. Seems obvious but it really is the golden rule of personal finance. Easier to say than…
I'm into the FIRE stuff. I don't find being interested in your work and having access to early retirement as mutually exclusive.
Having the ability to retire early is not really about retiring — it's about having optionality in your life to choose what you do with your time, whether that's what you work on, where you work, who you work for, or if you even work at all post the point of financial independence that divides "working life" from early retirement.
Primarily, it's the freedom. In other words, many people in this space are more interested in having the option available to them to take time off work and travel for extended periods, take sabbaticals, work on problems of personal interest that might generate no income, start a company for fun, etc. It's more realistic to achieve these goals after hitting a financial independence milestone, however one defines that goal relative to their spending requirements in "retirement".
Secondarily, it serves as "insurance" or a fall back to primary income should you choose to continue working in your current role or in a lower paying job but doing something you find personally fulfilling for other reasons, like a charity or non-profit. Maybe you want to work a blue collar job or two out of curiosity but that would be impractical or financial infeasible compared to an engineering salary. Maybe you want to work on open source full-time.
Tertiarily, there are unique tax optimization opportunities that emerge when you have…
You read through all the advice in these blogs [1][2]. Seriously.
If you are invested in low cost index funds, most assume you can safely withdraw 4% a year and not deplete your principal. If you're retiring at 35, you might want a greater safety margin, so let's say 3%. That gives you 60K a year.
How do you retire on 60K a year? Obviously take what I'm saying with a grain of salt as I'm a relatively young person and haven't done any of this yet. But...60K is the median household income in the US, so half of families in the US live on less. If you're retired, you can probably save in ways others can't. For instance:
* Housing. You don't need to stay in a high cost of living city, so move to a much cheaper area (maybe a college town).
* Education. You have much more time, so send your kids to all public education, and use your extra time to educate them further.
* Debt. You have a ton of assets. Why hold any debt?
* Automobiles. Bike instead, if you're physically able.
* Health. Probably the hardest one since insurance in the US is tied to employment. I understand the recommended approach here is to pay out of pocket for a plan, but many have trouble with this. Of course, the standard advice is to use the extra time you have due to retirement to stay as healthy as possible, but I acknowledge this isn't a perfect plan.
[1] https://www.mrmoneymustache.com/
[2] https://www.madfientist.com/
Sure, so there's a few things to look at.
The first is going back to the origins of the 4% number in the first place, the trinity study. The parameters for that were a 30 year retirement period, and success was "not completely run out of money after 30 years, 95% of the time". If you extrapolate from that original study, if you retire for more than 30 years (FIRE includes retiring early), success drops from 95%.
There's articles exploring that, e.g.
https://www.fiphysician.com/safe-withdrawal-rate-early-retirement/
https://www.madfientist.com/safe-withdrawal-rate/#:~:text=The%204%25%20rule%20is%20actually,average%20returns%20or%20nominal%20returns
And then there are a variety of online calculators where you can play with the numbers yourself.
The other elephant in the room is pre-Medicare healthcare costs.
It depends actually what is your purpose.
If you intend to learn about stock trading for personal finance reasons you can follow a lot of blogs or podcasts in the FIRE (Financial Independence Retire Early) community. Some examples are the stock series of JL Collins (https://jlcollinsnh.com/stock-series/) and the Mad Fientist (https://www.madfientist.com/, the blog is a bit tax focused, but it goes well with the Podcast).
If you want to learn about active trading then you need vastly different resources and not really my expertise.
Just wanted to mention that there are basically two philosophies here and based on either what knowledge you want to gain or how much risk you want to take as an investor you will need to choose what to learn.
> Both on contribution and withdraw
To clarify, the same money generally isn't taxed twice. Contributions to pre-tax retirement accounts are not taxed, but distributions are. On the other hand, contributions to Roth accounts come from taxable compensation, but qualified distributions are tax-free. Finally, you buy taxable investments with after-tax principal, and only its earnings are taxed later.
> Keep in mind you can't start withdrawing until age 59 1/2
This doesn't apply to taxable investments, obviously, but even for retirement accounts, there are ways around that.
https://www.madfientist.com/how-to-access-retirement-funds-early/