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What is Lean Fire?
Those who achieve lean fire status are reaping the benefits of the lowered costs associated with a company-wide lean operation. Those who achieve it also see an increase in their annual income, while their annual operating costs decrease.
Those who have achieved it also tend to outperform those who haven’t, which makes them more marketable and viable as an employer.
There are many ways to achieve lean fire status, such as having your entire staff undergo a lean induction (increase supervision and training), implementing complete cost reduction across the board, reducing your dependence on middleman brokers and distributors, and eliminating your largest expenses (your building and maintenance costs).
If you want to start saving money and cutting expenses right away, you can! And if you want to increase your annual income and your ROI in a relatively short amount of time, you can! Check out the resource box for some more details on How To Start Saving With Lean Fire.
Lean Fire defined
A popular number for a budget is $40,000 dollars per year. This is about 35% less than the average American household. That’s because they spend an average of $61,224.
The rule of thumb is $40K because it uses the 4% rule. If someone wants to spend $40,000 a year, they should have about 1 million dollars in savings. I like round whole numbers because it is easier to save money.
Instead of picking a number that might be too high or too low, you should calculate your own budget. And then calculate what your “lean FIRE” number would be. If you are living on $50K per year, then your lean FIRE number is $1.25 million.
My Personal Lean Fire Budget
I created my own lean FIRE budget by following Habit #2 which is “spend thoughtfully, and seek value.”
If I want to retire on a small budget, I need to spend my money on things that are most important to me. For some people this might be food, others it may be paying for entertainment.
But I am going to track my spending so it will be easier for me to know which things are most important.
Here is a list of how I categorize my expenses.-
#1 Necessary
These are the essentials. These categories keep people alive. They are things like mortgage/rent, utilities, groceries, insurance, and gas.
#2 Discretionary
These are the things you want. These are the things that make life more fun. Restaurants, travel, entertainment, clothes, electronics and personal care are part of these wants.
In the budget, there are different categories. The categories with low values have less joy. You can cut those down to the bone. When you do this for all 21 of your discretionary categories.
After you think about all your other things, move on to the needs. You might not have a lot of choices right now. Think about moving out of the city or finding a cheaper place to live. I am going to get rid of cable and gym memberships when I leave the city because that will save me money every month.
I’ve decided to spend less money. I’ve cut the amount I spend in certain categories such as food and clothing.
Spending money on different things can change your life. For example, I really enjoy spending money on experiences and travel. I get more value from those dollars than when I spend it on clothes.
If you are trying to live on a Lean FIRE budget (one where you don’t spend all of your income), then you will need to cut down on the clothes that you buy.
How Long Does it Take to Achieve Lean Fire?
Lean FIRE is a faster way to have money for your future. You have less spending so you can save more. I will spend $4000 per month on my savings account for this example.
- Budget for a month = $4000
- 5% expected investment return
- 4% Safe Withdrawal Rate
- and starting Amount is 0$
My lean FIRE portfolio value is $1.2 million.
($4000 * 12) / 4% = $1,200,000 dollars
According to this Formula – Monthly Expenses * 12 Months / Safe Withdrawal Rate of 4% = $1.2 million.
I plotted monthly saving amounts with an annual return of 5%. If I do not have any money now, but save $500 per month, it will take me 50 years to become rich FIRE (financially independent and retired early).
If you save $4000 a month, you can hit your financial independence goal in about 17 years. That is really interesting to think about. If you start with nothing, then it will take less than 2 decades to get financial independence. I know that is more interesting than working until you are 65 years old.
Lean FIRE is a safety value, not the end goal
I use my lean FIRE budget as a safety measure. I only sell stocks if the market is down. Bear markets can last a long time, which is why I have many years of expenses invested in bonds.
Lean FIRE is not the same as Fat FIRE. Lean FIRE is for people who want to be more careful with their money. Fat FIRE is for people who are ambitious and high achievers. It’s like a backup plan if times get tough or markets go down.
Vinovest Review: Investing In Fine Wine
Investing in the stock market is a good way to invest but it is always advised to check the overweight or underweight rating of stocks. The stock market is always changing. Some people put their money into other investments that are not stocks, like gold. These can change too, but they can change less than the stocks do.
Wine investing is a new way for people to invest their money. People see it as an option because the wine prices go up and down and they can buy different wines, but they can’t do that with stocks.
The maturing process of wine provides a pleasant tailwind when investing in wine. Investable wines are expensive and people will want them. They are for people to buy and keep, like for 50 years.
Vinovest says that the price of wine has been higher than the S&P for 30 years.
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What is Vinovest?
Vinovest is a new website for investing in wine. You can buy wine from people who have it or from big companies. They have people who help you find the right wine. They are experts in wine. They also help you pick your investments.
Vinovest provides a place for people to store their wine. They make sure the temperature is good and everything’s safe. So, when you invest in Vinovest, you also invest in an off-site wine cellar.
How Does Vinovest Work?
If you want to start with Vinovest, do the following:
- You need to have at least $1,000 for their standard offer or at least $50,000 for their custom offer.
- Sign up online. Tell the website what kind of investment you want and how much risk you are willing to take.
- You can choose the wine on the platform yourself or have someone help you. Then you can buy it.
- Store your wine with Vinovest or ask for it to be delivered.
- Keep track of your portfolio. If you need anything, ask on their website.
- You can sell your investments years later for the best profit.
Vinovest has a team that looks for wines from around the world. They are looking for wines from regions like Bordeaux, Burgundy, Napa and newer wineries.
Pros of Vinovest
Here are some reasons why you should invest in wine with Vinovest.
#1 Uncorrelated Asset
The stock market is different from wine investment. The stock market does not affect the performance of Vinovest. This helps people who want to invest but for a less volatile stock.
#2 Portfolio Diversification
Alternative investments like wine make it possible to diversify your investment portfolio. People think that this is less risky than the stock market. Wine has a history of giving good returns for people who are invested in it.
#3 Expertise Meets AI
You may not know what wines to buy. Vinovest helps you figure it out with AI technology. You can use them without touching a bottle of wine if you want.
#4 Safety and Storage
Vinovest is a place for people to store their wine. It is a climate-controlled building 24/7.
#5 Guarantee and Insurance
Vinovest inspects every bottle of wine to make sure they are authentic. If there is a problem, the company will pay you the full price for your wine.
Cons of Vinovest
Vinovest isn’t a good investment choice because it has some disadvantages when you compare it to other options. These disadvantages depend on your time horizon, risk tolerance, and asset allocation.
#1 Fees
Vinovest charges an annual fee of 2.85% on your portfolio, which is reduced to 2.5% of your portfolio is larger than $50,000. If you invest $5,000 in wine, your annual fee will be $142.50 from Vinovest.
This is a lot of money for this service. It is much higher than the cost for most investments. But it is not as expensive as some other things you could invest in.
#2 Liquidity
Wine is not as easy to sell because it is a physical item. You might have to wait for someone else to buy it or drink it yourself.
However, if you want to get more money for your wine, Vinovest can help you. It takes 4-6 weeks because they have connections with other people that buy and sell wine. You get to sell your wine globally then.
#3 Patience
Many people say that wine gets better with age. That’s why wine is for people who would like to invest for a long time, about 3 years. This will give time for the value of the bottles to go up because they are rarer because everyone drinks them.
Vinovest recommends wines that are good for people to drink when they are old. They might not be ready now, but you can save them until later.
While the sommeliers at Vinovest will recommend when to buy and sell wine, you have the final say.
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