Coast FIRE: Easiest Path To FIRE
Coast FIRE is when you aim to invest enough money to let it grow without any further contributions and have that money be sufficient to cover a traditional retirement.
The easiest way to calculate Coast FIRE is to find your FIRE number first. If you anticipate having yearly expenses of $40,000/year in retirement, you would have to save $1 million. FIRE Number = 25 x (Yearly Expenses)
You can invest $90,000 at an early age and let it grow to $1 million using compound interest. Letting $90,000 compound over 35 years at a 7% average yearly return would give you $1 million! This is why compound interest is the 8th wonder of the world.
Your Coast FIRE number or the amount will depend on two factors: Yearly Expenses Time Until Retirement
If you are 30 and want to retire at 65, you would have 35 years until retirement. Now we can calculate our Coast FIRE Number: Coast FIRE Number = (Yearly Expenses x 25) ÷ (X) X Depends On Your Time Until Retirement
Yearly Expenses ($40,000) Time Until Retirement (35 Years) X = 11.5 CoastFI Number = ($40,000 x 25) ÷ (11.5) CoastFI Number = $87,000
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