The Value of $100 in Early Retirement
What’s the value of $100 to you? Maybe a new sweater or a nice dinner with wine for two? How about buying a day of freedom in your journey to early retirement?
As members of the 21st century, we have born into a system of capitalism where we cannot live without paying our way. Shelter, food, clothes, and other necessities cost money. Unless you were already born into a family with a trust fund waiting for you, the whole point of Financial Independence is to save up our own stockpile of funds to pay for every day of our life.
In A Millionaire is Made Ten Bucks at a Time, Mr Money Moustache presents a compelling argument for defending every $10 you have and keeping it in your pocket. I’d like to take it a step further to discuss why every $100 saved is a cause for celebration.
My yearly expenses are around $24,000. About 40% of that goes to rent, the rest split between transit, food costs, gym, shopping expenses, donations and entertainment. Using the rule of 25, I need to save 25 times my yearly expenses to retire early- $600,000. This is the next egg I am working on growing.
The amazing thing is for every $100 extra I save, I shave one day (plus a few hours) off my retirement date.
What an easy way to narrow your decision making when considering a purchase…. either I can have something I’ll take home, put in the closet, and remember now and then when I come across it, or that same money can buy an extra day of freedom.
That’s a day without commuting, logging into work, navigating through the hordes of busy mindless people in Toronto’s PATH, and sitting through obligatory training or meetings.
I know which I would chose…. how about you?
***To find out what one day of freedom costs you, download the Preretirement app from the google store and use the “What if I save or spend” option.