Unfortunately, I'm not earning as much as you did before you FIREed. If the pay rise pans out, I'd be able to save an additional £20k, which would reduce my working life substantially. Without the extra income I'm going to need to rely on compounding to build the po tover a longer timeframe.TheRIT wrote: 17 years is a bit longer than my 9 years but make sure you model what you might expect compound interest to deliver as I received quite a surprise as only 38% of my wealth came from compound interest while 62% came from saving.
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If I understand correctly your 38 years old today, your at a 40% gross savings rate and you only think you can FIRE in 17 years. With a bit of critical thinking I'd challenge if you might just be able to do a bit better than that. In comparison I started when I was 34, became FI only 9 years later at age 43 and will FIRE next year under current plans.
By my projections a ten year period would see 50% of returns come from 'interest'. That pot of 150% would then double over the next ten years, due to compounding. I'd then add another 150% by investing and growth during the second ten year period. This would give a total of 450% - of which 250% would be growth.
This is based upon a return of 7% and a 20 year investment period. The ftse 100 has an average return of 9% over the past 40 years.