<div class="bbWrapper"><blockquote data-attributes="member: 140079" data-quote="Alexandrel" data-source="post: 1131559"
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Even 5k savings a month is a long way:<br />
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<a href="https://www.thefastlaneforum.com/community/attachments/57386/" target="_blank">View attachment 57386</a><br />
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And that's to reach "just" 1 million (in Australia that's the price of a decent house now). Assuming, and hoping, you will invest $ 5k every month, for 12+ years, and that it will average 5% interest / year.<br />
If you lose a big chunk somehow, stock market down, house market crash, etc, you're back to years of the same grind.<br />
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As an engineer on a low 6 figures salary, I don't save 5k a month.
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</blockquote>I don't know if my friend saved 5k a month. He did save for a good while though, longer than 12 years, and he also lived fairly low on expenses. He never deprived himself of stuff, but he made sure that he knew what he wanted and only spent money on those things (e.g. good food and board games) and avoided spending money on things he didn't value (e.g. fancy cars). He had read <a href="https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/" target="_blank" class="link link--external" rel="noopener">this article</a> by Mr. Money Moustache and it basically plots retirement as a function of % of savings vs. expenses, in # of years to retire. In my friend's mind, he viewed a large purchase as a tradeoff between having that item now vs. retiring x years later, based on the cost of the item. So between retiring 3 years early or having a fancy car, he chose to retire 3 years early (hypothetical numbers). <br />
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This is assuming you can keep your expenses fixed. Home ownership is definitely useful in places where rents can go up without control. In places where rents are controlled, like where I live, then I don't see a need to own my own place. I'm happy renting since rents can only be increased by 2-3% per year. <br />
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Most losses from stock market crash or housing market crashes are not permanent losses (unless you sell the asset and cash out at that time). You can often ride it out. My friend rode out many stock market dips over the years. At some point your portfolio will grow so big that the volatility won't matter and your average returns will more than make up for any temporary losses.</div>
