[ef4]

After college I spent six years working at a good tech company. In addition to a lot of great learning, it allowed me to build a big financial cushion. I continued living on a graduate-student-like budget with a software engineer salary, so I saved about half my after-tax income.

This generates one year of runway for every year worked. But my savings also grew thanks to some solid investments, so after six years I had ten years of runway.

Over the subsequent four years I spent down about 30% of my savings while working on startups of my own (I made some revenue, I took some small angel investment). Relationships and expertise that I built in the process allowed me to pivot into running a lucrative consultancy.

Before somebody says "you can only do that if you're young and unattached", I will add that I got married before I finished school, and our first child was born the same year I quit my tech industry job.

[pkd]

That is highly impressive. I would like to be able to save 50% of my net income, but I have found that I have very little control over spending and end up saving only around 20%.

[bigato]

That means that for each five months working, you build up reserves enough to last you one month without working. It's not a lot, but it's something. Now make some effort to push it to a 33% savings rate, and for each three months worked, you'll have one month of expenses saved. And so on. At some point, it becomes a game of cutting expenses and raising income.

If you get to live on 20/25% of your income and invest the rest, in 5 to 6 years you should have enough invested to pay your expenses for the rest of your life, assuming an yearly average return of 4% over inflation. This formula was made popular by Jacob from Early Retirement Extreme blog/book/forum/wiki: http://earlyretirementextreme.com

[mbrock]

What would happen if you just moved 50% of your monthly income to a savings account and convinced yourself that it's going to stay there because it's for savings?