You are correct gcr but only for "your" lifestyle. It differs from person to person. I personally have friends that recently retired with Provident Funds of R1.2 and R1.5M (no pensions) and with their homes paid off, they still live in comfort after 2 to 3 years. Not sure about their long term "comforts" though as they know nothing about investing.
I have been living off R12 to R15 000 pm after tax and lack for nothing. I don't even want to buy a house. I rent a fully furnished flat with good sea views and enjoy free fishing and free sightseeing and once a week an eat out. No smoking. Lots of beer though.
Now, my aim is R2.5M that I hope to achieve this year and switch to Indi. Of the 35% ave gains, I will only use 6% pa. That will give me a good leeway for a 50% correction.
Couldn't agree more (and it's not often Orca hears that
). The key is to focus not on wealth but on happiness, and as we've all heard, more stuff not only doesn't mean more happiness, but more maintenance, higher insurance premiums, more things to worry about, and replace when needed. We live in an environment that encourages consumerism. Want a new fuel swallowing X5 or golf gti but can't afford it. No problem, here's a car loan at eleventeen percent. Shoes already 3 months old, get new ones, just charge it, 19% interest. Ooh the new iphone 5 is out and your iphone 4 is looking stale, don't worry, just sign this contract for R469 a month for 24 months and get updated!
The strange thing is that all of the above is completely normal in our society. I'm the weird one because I drive my 2004 nissan to avoid a car loan. I'm weird because I don't spend R7500 every year on DSTV, because you know, you need it for the sport... What? You walk 1.2km to work every morning instead of driving, and bike to go see your son? Are you mad, seriously go see a shrink now!!
Aside from my sons expenses, thanks to his mom's taste in all things pricy, I could also live happily somewhere between R10k-R15k per month, and not want anything I didn't have, eating well, living well, enjoying life. If I got rid of the damn expensive maintenance and upkeep on my house I'd be in an even better situation, but I bought it when I was still under the "Ooh I got a raise, let's spend it" spell.
Every time you spend money on something you don't really need, you're committing yourself to work for another period of time to pay for it. Meaning less time for you to spend with the family, on a new hobby, or having some cool adventure. Basically, throwing money away shortens your life. Some people claim to love work, but if it paid no money do you think they'd still be doing that?
I'll be donating my work outfits to charity in 12 years time, and then figure out what I want to do with my time rather than work to pay for stuff I don't really need. At the moment it starts with heading off to go sailing for a couple of years with my son. Then when he goes to varsity I plan on biking the americas, for as long as I feel like it. Then I might go settle with a loved one in a small town in Thailand, or build my dream electric car. Of course all of these things could change, but the freedom to be able to make these choices remains.
Interestingly, if you can save 50% of your net salary every month, your working career only needs to be 17 years long, and you can keep living as you've been living. If you can manage to save 60% of your salary, it's only 12.5 years, and at 70% it would be just 8.5 (figures courtesy of
Mr Money Mustache). Let's solve youth unemployment by retiring before 50 and giving the youngsters a chance to show us what they can do.
