Weeknotes 121 - Compound interesting
- I finished reading Playing with FIRE, a book about a couple who changed their life to reach financial independence and retire early. Would recommend. I had been avoiding getting interested in FIRE since it has all the outward signs of an internet cult: a name, an acronym, dedicated blogs, conferences, podcasts, subreddits and community leaders who call themselves names like Mr. Money Mustache. Just like I wouldn’t look for financial advice on r/wallstreetbets. But luckily the core idea—spend less than you earn, increase earnings if possible, invest the difference in an index fund, collect compound interest until your money can generate a “salary” through interest alone—is pretty simple and doesn’t require joining some kind of “movement”.
- I spent some time with a compound interest calculator to figure out how different factors such as monthly saving amount, % interest, and the size of expected annual returns play off of one another. This one has a good visualisation. I saw how long it would take me to get to financial independence under various scenarios: if index funds performed badly or well, if I got a pay rise or took a pay cut, if I expected to be covering high costs of post-retirement living or low. A fun exercise to do, which definitely motivated me to save more than I currently am.
- Obviously I’m not a financial advisor, so you know, these are just musings of a random internet person rather than solid retirement advice.
- Guitar update: I’m learning a new strumming pattern which sounds amazing with power chords. I was not prepared for how much fun it is to play rock. I am definitely listening to more rock since I got the electric guitar, and I’m really enjoying being taken on this wild ride without knowing where I’ll end up.
- I did not know that Lil Nas X’s pre-stardom hobby involved hacking the Twitter algorithm to make content go viral.