The importance of savings rate

If you’re interested in FIRE, you understand the importance of having a high savings rate. If you want to be financially independent and/or retire early, having a high savings rate is essential.

Because it’s so important, it can pay to reinforce this message, again and again, in many different ways. In the video below, I illustrate the importance of savings rate with a humble spreadsheet – not to mention, a number of wild assumptions.

Other articles and resources worth checking out include Mr Money Mustache’s article “The Shockingly Simple Math Behind Early Retirement” and the Networthify Early Retirement Calculator.

Another article that might be of interest is “You may not need to save as much for retirement as you think” on the NZ Wealth & Risk blog.


(Sonnie Bailey is the author of this article and is an Authorised Financial Adviser (AFA). A disclosure statement is available free on demand: click here.)