Comments on: How to FIRE your boss https://www.foxymonkey.com/fire-your-boss/ Company Investing, Tax and Financial Independence Wed, 04 Aug 2021 08:21:15 +0000 hourly 1 https://wordpress.org/?v=6.8.2 By: Michael https://www.foxymonkey.com/fire-your-boss/#comment-4096 Wed, 04 Aug 2021 08:21:15 +0000 https://www.foxymonkey.com/?p=8258#comment-4096 In reply to zed.

Great comment, very insightful. I also see controlling your time as the ultimate form of freedom. Money is just a tool that can provide that. Being more independent and autonomous as you rightly said.

Overall, yes there is inflation and it’s definitely something to consider, I missed that. The 3.5% safe withdrawal rate, however, assumes that you re-adjust your withdrawal number each year to add inflation without running out of money.

Inflation is worrying but only for savings in certain assets – cash, fixed income. Depending on the asset mix, inflation can actually be your friend. With property investing, for instance, inflation is not so bad. Hard assets keep up well plus your mortgage debt is in nominal terms hence decreasing in value over time (without even paying it off).

Stocks, which suffer from *unexpected* inflation in the short term have easily beaten inflation over 5-10 years. That’s because they are a big part of the economy, they raise their prices, they own hard assets such as factories etc. This is why sometimes I am against having a large allocation in inflation hedges (commodities) instead of inflation-beating assets.

]]> By: zed https://www.foxymonkey.com/fire-your-boss/#comment-4095 Tue, 03 Aug 2021 20:26:16 +0000 https://www.foxymonkey.com/?p=8258#comment-4095 Thank you, Michael as always. I am glad I came across your blog last year in February before the COVID induced market crash while doing my research on limited company investment models. I have educated myself a lot and some of the books in your reading list have helped me along the way, as well as creating my own detailed current budget and spend and start investment journey. I agree with almost everything in this Part 1 blog that FI does not mean giving up work, it’s the principle of having the freedom to choose kind of work you want to do, be it paid or unpaid. One important aspect which I hope you mention in the part 2 is the role of inflation on living expenses. For example, if my current expenses in a round number are 50,000 per year and I want to be FI in 10 years, I need to take that into account that my starting number will be more than current expenses rate of 50,000 in 10 years time. Minor point however an important one in my opinion. Coming back to FI, and thinking about the permanent job before starting my Ltd company, I think the choice is usually certainty (as much as a perm salaried job can offer these days- but it’s still more certain than contract for a Ltd co director you may say) vs autonomy as a director of your Ltd co for example. What I understood in simple terms is that reaching FI where all or almost all of your expenses can be covered by your investment income eventually offers you that certainty on top autonomy which you already have as being your own boss. Studies after studies have shown that having control over your time and control over your tasks/works has the strongest link to happiness (not money or job title or anything like that but control over what you want to do, how you want to do and when you want to do).

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