What is RealFireCalc?

RealFireCalc is a simple yet powerful retirement calculator for FIRE. We take a slightly different approach to FIRE planning inspired by 'Die with Zero'. The idea is simple, you may not need to save as much as you thought. Instead of having tons of leftover money at the end of your retirement, we try to aim for a more balanced approach by having just enough money to last for your entire retirement.

FIRE stands for Financial Independence Retire Early. It is a movement that encourages people to save and invest aggressively so they can retire early.

This concept revolves around the idea of achieving financial independence at a young age, allowing individuals to retire early or pursue passions without the constraints of traditional employment.

The concept of FIRE

At its core, FIRE is about creating a lifestyle that prioritizes saving and investing to accumulate enough wealth to support oneself without needing to work for a paycheck. The movement encourages individuals to take control of their finances, reduce unnecessary expenses, and invest wisely to build a substantial nest egg. The ultimate goal is to reach a point where passive income from investments can cover living expenses, allowing for early retirement or the freedom to pursue other interests.

The problem with FIRE

People put too much focus on the amount of money they need to retire. They think they need to have several million dollars to retire. The truth is, you may not need that much.

There's a concept called "SWR" or Safe Withdrawal Rate. It is the percentage of your portfolio that you can withdraw each year without running out of money. The higher the SWR, the more money you can withdraw each year. But the general rule of thumb is 4% SWR. In other words, if you have $1,000,000 in your portfolio, you can withdraw $40,000 each year. However, because your portfolio will grow with the investment returns, you might be able to withdraw 4% without drawing on your account principal.

Let's look at this hypothetical example:

• You have $1,000,000 in your portfolio.
• You can withdraw 4% from your portfolio each year.
• Your portfolio grows at 7% per year.
• You spend $40,000 each year.
• After 1 year, your portfolio is at $1,030,000, after earning $70,000 at 7%, and withdrawing $40,000 at 4% SWR.
• After 30 years, your portfolio is now $6,430,075.

Here's the question, do you want to leave behind $6,430,075, or do you rather have less money and enjoy your life more with your loved ones?

The "Die with Zero" concept, popularized by Bill Perkins, is a variation of FIRE. It challenges the traditional FIRE views on wealth accumulation and retirement planning. Instead of focusing solely on saving for the future, the DWN philosophy encourages individuals to prioritize experiences and enjoyment throughout their lives, ultimately aiming to "die with zero" dollars left. This approach emphasizes the importance of maximizing life experiences while ensuring financial security.

You Only Live Once

You only live once, so what's the point of saving a bunch of money and unable to enjoy your life?

Reflect on Values

Consider what experiences and moments are most meaningful to you. Identify the activities that bring you joy and fulfillment.

Plan Life Experiences

Create a plan for how you will allocate your time and resources to maximize experiences throughout your life. Use the time bucket approach to ensure you are making the most of each phase of life.

Balance Saving and Spending

While it’s important to save for the future, find a balance that allows for enjoyment in the present. Set aside funds specifically for experiences.

Prioritize Relationships

Invest in relationships by spending time with loved ones and creating shared experiences. This can enhance both your happiness and theirs.

Reevaluate Financial Goals

Shift your focus from accumulating wealth to enhancing life satisfaction. Consider how your financial decisions align with your values and desired experiences.