A few weeks ago I wrote on growing where you are. This was kind of personal because I realized my wife and I would not have reached FI in nine years (2021) with a final savings rate of 30 percent if we were not at the top of our careers. We have since backed off from 30 percent to “Coast FI” to improve our home and plan on retiring in about 5-8 years.
Savings and minimalism can only take you so far. People can reach FI just through minimalism, but reaching your income potential really speeds things up. Plus, I have noticed that when you reach your income potential your work becomes more satisfying.
I mention this because reaching FI for us at only a 30 percent saving rate would not have been possible without maximizing income. Typically reaching FI in that period requires at least a 50-60 percent saving rate with Spartan-like minimalism. Leveraging income potential speeds things up. Focusing on professional growth helps you reach FI sooner.
Becka obtained a master’s degree and became a supervisor. I sought to know as much as I could about mechanical and controls engineering and finished my degree. Furthermore, Becka was a lifetime saver and had a respectable nest egg putting her near 20 percent FI when we met. There is no doubt she would have reached FI on her own when she started social security.
The lesson here seems to be that making a habit of savings at a young age means a lot. It is the magic of compounding returns. I wish I would have learned this lesson earlier in life. The magic of professional growth also compounds.
TheLateFrugal.
