Never buy the next size up
Never Buy the Next Size Up
We were in Spain a couple of weeks ago on a family holiday. As I pulled on my shorts, I had to admit they were a little tighter than they had been in Crete last October.
I remembered some advice a portly friend gave me years ago: “Never buy the next size up.”
I decided it was time to lose a couple of kilos.
Two kilograms of body fat equates to roughly 15,400 calories. Once I knew that number, the problem became much easier to solve. I could calculate a sensible daily calorie deficit, estimate how long it would take and fit it around my training schedule.
Without those numbers it’s just a vague ambition. You tell yourself you’ll “eat a bit better” or “exercise a bit more”. Good intentions rarely survive long without a plan.
Forgive the tenuous link but financial independence works in much the same way.
Suppose your ideal lifestyle costs £75,000 a year. If your goal is to reach the point where work is optional and your investments can sustainably generate that income, you might need a portfolio of around £1.9 million, assuming a 4% withdrawal rate.
For many people, £1.9 million feels overwhelming. Almost impossible.
But that’s simply the end goal.
Once we know where you’re trying to get to, and when you’d like to get there, we can work backwards. We can calculate how much needs to be invested each year, decide on an appropriate investment strategy and identify where compromises might be needed.
Perhaps you save a little more today. Perhaps you delay financial independence by a few years. More often than not, it’s a combination of both.
The important thing is that the goal stops being an aspiration and becomes a plan.
The shorts are already fitting better.
Financial independence takes rather longer than a fortnight, but the principle is exactly the same. Know your number. Decide on the timeframe. Build the strategy.
Then simply keep going.
