According to History: Born in 530 B.C., Leonidas ascended to the Spartan throne around 490 B.C., where he would remain until his death about ten years later. Leading an army of 300 Spartans, allied with another 6,000-7,000 Greeks from the neighboring region, Leonidas went up against the invading Persian army, led my Xerxes I. The Battle of Thermopylae took place at what was known as the “Hot Gates,” named for the sulfur springs in the area, and consisted of Leonidas and his men taking advantage of the narrow passage in order to funnel the approaching enemy, who far outnumbered them, to a more manageable number to fight at one time.
Spartan males were trained from childhood in the ways of the hoplite warrior, learning to fight with a spear, short sword, and a round shield. In battle, they would stand near one another and overlap their shields, protecting one another from a frontal attack.
Unfortunately for Leonidas and his 300 Spartans, they were betrayed by a Greek citizen, who had informed Xerxes’ army of another passage, allowing them to surround the Spartan army and overtake them. Leonidas’ stand against the Persian army and ultimate death was an inspiration, demonstrating Sparta’s commitment to the Greek region.
Now, how am I relating this history lesson to personal finance? Please proceed…
Financial Independence = your monthly expenses x 300
This isn’t a new concept; I just wanted to put my own spin on it while talking about some history and an awesome movie. 🙂
For every dollar you want and/or “need” to spend each month in retirement, you need to have $300 invested in order to apply the 4% “safe withdrawal rate” principle. Rather than multiplying your yearly expenses by 25, this is simply looking at it from the perspective of monthly expenses (25 x 12.) I like to look at our retirement number in this way because it allows for a more detailed understanding of the fact that every.single.dollar. counts.
For instance, if you’re spending $150/month on satellite TV and want to continue your service after retiring, you need $45,000 in your retirement portfolio just for that one monthly expense…for friggin’ cable! We cancelled cable months ago, saving us $90/month – that equates to $27,000 we no longer need to save in order to reach our financial independence number. Once our Jeep is paid off and we are no longer shelling out $500/month for that, there goes another $150,000 dollars we won’t need in retirement. I need $9,000 invested just to cover my $30/month soda habit – that expense will definitely have to go bye-bye. The list goes on and will no doubt continue to dwindle as we inch closer to FIRE.
Like Leonidas’ Spartan army, our dollars have the capability of standing strong, protecting one other, multiplying their strengths, and kicking serious ass…but only when we don’t sabotage them. We must, instead, make purposeful decisions regarding how they will be put to use, thereby maximizing their value and simultaneously minimizing the number of soldiers we need fighting for us in retirement.
It’s too late for Leonidas…but will your Spartans be victorious? What costs have you already slashed to decrease your FI number? Any more cuts coming? If you haven’t already calculated, how much are these changes decreasing the amount you need to retire? I’d love to hear your thoughts in the comments below!
– Nurse on Fire
P.S. – If you haven’t seen the movie 300, watch it! Guys, fair warning, your lady friend will likely not share in the love (other than for a half-naked / booty shot of Gerard Butler.) The first time I watched it, my wife (then girlfriend) FELL ASLEEP and I’ve never been able to convince her to watch it with me again. #FrownyFace