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Comment by rorrr | Hacker News Reader

It's not that hard to accumulate $100K if you're in IT. Just working for $100-150K a year and investing $20-30K annually should do it very quickly.

Now accumulating $1M in a span of 5-10 years is much more challenging. I'm yet to solve that problem.

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As does working for $40k a year and investing 30k annually which is what I did. There's no stock market magic required.

I think that's just impossible. On 40K you will pay

$580 medicare

$1,680 FICA

$3,410 federal

$1,824 state (NY), and maybe some local, depending on where you live.

If you can invest $30K after that, you're some motherfucking frugal genius.

Under the table ftw?

@rorr - Uhm, yes, your point? I did say I was living on 5-7k/year.

After those taxes and $30K invested you'd only have $2506.

Okay, that's nitpicking. Make that 26k invested then. Also, you can reduce the taxes by diverting into an IRA. Also, after the first year, you can begin to add investment income on top of your regular income. This investment income will increase by about $1000 each year.

With those numbers $4K isn't nitpicking it's 10% of your net.

But 2-3% of my assets. I wouldn't get too hung up on the details. I didn't earn 40k every year. Some years were less. And some were more (see FAQ). I didn't live in New York.

Everybody can run their own spreasheets for their personal income and tax situation presuming an expense level of 6k/year. Figure an investment return of 3%+inflation (so 6% or so total). See what you get.

For some reason I initially assumed $300,000 plus was your retirement target. I am now assuming $175,000 in savings is what you define as "financially independent" That makes sense given your $7,000 per year expenses. ($7,000 divided by 0.04).

1) Starting from zero (because where else would we start for this analysis?)

2) We save $26,000 per year (2,166.7 per month).

3) Assume 6% return.

4) It takes about 5 to 6 years to get to $175,000.

Makes sense, a retirement fund that covers 7,000 per year in living expenses (i.e. about $175,000), takes only about 5 years of saving $26,000 per year (and conservative investing).

Quick and easy math here: http://www.math.com/students/calculators/source/compound.htm

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