36 year old New York corporate lawyer making $270,000 lives off rice and beans to retire early

I know nothing about FIRE; just finance. A dollar today is worth 100 to 400 dollars 'tomorrow' depending on investment horizon and risk tolerance. For example, if he only saved 50% of his salary instead of 70% of his salary this year alone, that is a difference of 5.4 million dollars assuming he can get a 100% return on his investment.

Assuming he invests just that amount at 12% for the next 40 years, that is 5 million. At 14%, he gets the same amount in 35 years. So imagine saving that difference every year for a number of years and projecting only a 10% return, which is, depending on which periods you look at, roughly the average rate of return of the S&P 500.

5 years and that yearly difference nets you 5 million in ~30 years at 10%. Now imagine how he is saving 3 times that, may be getting better returns by using the Russel 2000, but has a shorter investment horizon. Still impressive.

People severly underestimate the power of compound interest and financial literacy generally.

/r/LawSchool Thread Parent Link - businessinsider.com