When Was The Last Time You Considered Quitting?

Good morning and Happy Friday!

Welcome to another edition of The Matt Viera Newsletter.

The newsletter with the goal to inspire you to live the life you actually want to live.

Thank you for your continued support.

I used to work with this brilliant high school science teacher.

Let's call her Lorie.

One day, Lorie woke up like any other day.

She got ready for work.

She rode the subway to work.

She arrived at work and greeted her colleagues with a smile.

When her students arrived at her classroom for class, she greeted her students with an even bigger smile.

Lorie was a popular teacher and one of the best I had the privilege of ever working with.

Lorie taught 3 or 4 science classes that day before lunch.

Then shortly before lunch, she walked out of her classroom, walked to the principal's office, looked the principal dead in the eye, and said:

"I quit."

Then Lorie walked out of the school and never entered another classroom again.

When was the last time you wanted to walk into your boss’s office and just quit?

If I can do that today, I definitely would.

Heck, if I was in a better financial situation when I was informed that I have to return to work in a office 5 days per week after working from home for 18 months, I probably would’ve.

However, when I decide to stop working (2028), I want to be as financially comfortable as possible.

I wish I had been aware of the FIRE movement 30 years ago.

FIRE is the acronym for Financial Independence, Retire Early.

The idea behind FIRE is to save as much as you can as early as you can so you no longer have to work and can live the life you actually want to live.

Whether you're aware of or an adherent of the FIRE movement or not, I will say to anyone who no longer wants to trade their time for money:

"I like where your head's at."

I'm not a diehard adherent to the movement (I'm too old); however, in layperson's terms, the idea behind FIRE is sound:

You save/invest upwards of 50-70% of your income until you hit your FIRE number.

Place 50-70% of your income in savings and an investment account earning a total of ~7% annual interest.

When you decide to quit, or Retire Early, you withdraw ~4% per year for living expenses.

You can then, essentially, live off of this money forever.

That’s the idea.

There are many variables in the equation and different strategies and flavors of FIRE, but you get the drift.

The key is determining your FIRE number.

So how do you determine your FIRE number?

Simply put, determine your annual essential expenses and multiply that number by 25.

For example, while I live in the most expensive city in the world, my current annual essential expenses come out to about $25,000 per year.

I know this because I've been tracking every dollar I've spent daily since January 2021.

That number includes everything: rent, car payment, groceries, utilities, student loan, etc.

The absolute essentials.

Multiplied by 25, my FIRE number is $625,000 (to have a safer number, multiply by 30: $750,000).

Now if I have this amount of money invested, earning an estimated 7% per year, and I withdraw only 4% per year to live on, in theory, I can live off this money forever.

Here are the numbers:

FIRE number: $625,000/$750,000

Earning 7%/year: $43,750/$52,500

Withdraw 4%/year: $25,000/$30,000

The difference ($18,750/$22,500) and the principal amount ($625,000/$750,00) would grow by the power of compound interest.

Again, there are variables in the equation, market fluctuations, etc., to consider.

And, while I'm not an adherent, I do believe in the numbers (and a reasonable rate of return).

Is it realistic for me to believe I'll have $750,000 in liquid assets by 2028?

Most likely not.

I doubt I'll get to $625,000 (but I assure you, I will try).

What I do have on my side is that while I live in the most expensive city in the world, my annual expenses are not crippling.

I doubt these expenses will increase.

As a matter of fact, if I ever decide to leave NYC for say, Kuala Lumpur (or anywhere for that matter), my annual expenses will most likely decrease.

Why?

Housing/cost-of-living is typically the largest expense for anyone.

If/when I buy real estate, I'll ensure the mortgage is close to or less than what I'm paying now in rent.

In 2028, I'll no longer have a car payment (or it'll be less than what I'm paying now), nor will I have a student loan.

That's about an extra ~$600 per month in my pocket.

The coup de grace is: whether I achieve my FIRE number or not, in 2028, I will have a pension.

Monthly income for the rest of my life.

It won't be much, but, for me, work will definitely be optional.

Believe me when I say, I'm not trying to flex.

I don't know what I would do if I didn't have that pension to look forward to.

I'd probably rewatch Breaking Bad and start taking notes.

I say all this for one reason and one reason only:

A day in will come in your life when you wish you were more like Lorie.

To live the life you actually want to live, save and invest as much as possible as early as possible.

Interesting reads:

If you haven’t read The 4-Hour Work Week, I encourage you to check it out along with this article:

Reflections on the impact of 'The 4-Hour Workweek' 15 years later

With respect to FIRE: Retiring early sounds hot, but it’s easy to get burned

If you’re looking to travel: Where to travel in 2023

Thanks for reading!

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