At age 60, she has a whopping $1,390,493 – thanks to the power of compound interest.ĭaniel, on the other hand, does not start investing until age 31. Lucy starts investing $5,000 per year for 10 years at age 21. Our investors in this example are called Lucy and Daniel. I’ve since seen variations of the same table in many books and articles. In one of the books, there was a table comparing two investors and the impact starting early has on their wealth creation journeys over time. The Power of Compound Interest and Doing Nothing Starting early (to use the power of compound interest).Learning about them eventually led to my lightbulb moment: Two concepts that were discussed a lot in these books and blog posts stood out to me. In late 2015 and early 2016, I spent a lot of time reading books on investing as well as some of the earlier FIRE blogs (all US-based at that time). Today we’ll talk about the shockingly simple math behind Flamingo FI.īut first, let me share how I came up with the idea to cut our FIRE journey in half. So I agree, it’s time for another post on this strategy. I know many of you have changed your FIRE plans and are now working towards Flamingo FI and semi-retirement. It takes you to FI in 10-15 years (while working part-time and without saving!). It means you have the hardest part of the journey behind you. And to this day, I still feel that Flamingo FI is the ultimate financial independence sweet spot. We started working towards Flamingo FI in 2016 and got there in 2020. In fact, I’ve summarised everything you need to know about it in this 2018 article: Flamingo FIRE – The Best Path to Financial Independence? The reason why I don’t write about the math and mechanics behind Flamingo FI that often is that it is a really simple concept. Many of you commented that I don’t write enough about our signature “type” of Financial Independence – Flamingo FI. One piece of feedback from the recent Money Flamingo reader survey surprised me.
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