Retirement, Financial Independence, and How Savings Work

A ton of personal finance information awaits anyone with an interest, but we need a frame of reference to even begin understanding all of that information in the first place.┬áLet’s take 10 minutes to talk about what “retirement” really means, and how that applies to financial independence and savings.

Retirement is simply the point where our resources can cover our financial needs for the rest of our lives, without us working any more. That’s it. There’s no special age, there’s no magic number, and there’s no “one right way” to calculate when people should retire if they want to. While a lot of factors contribute to figuring out retirement (such as how long we’ll live and how much we need), retirement is simply the point where we decide that we can afford to quit working, if we want to.

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What Starcraft Can Teach Us about Personal Finance

Real-Time Strategy (RTS) games like Starcraft require deftly managing income, output, and attention. These three resources change priority throughout the game. Personal finance works the same way, requiring us to manage income, spending, and attention, to attain financial success.

More specifically, our chances of success in Starcraft depend on our harvesting rate, conversion of resources to units, and optimal application of those units to defense and expansion. Note that I said “chances for success”, not just “success”. We can do everything right, and still lose. We can do everything wrong, and still win. Knowledgeable and persistent optimization of our opportunities helps us make the most of what chance offers us. Here, then, are five personal financial management lessons to garner from Starcraft.

1. Time Scales Linearly; Resources Scale Exponentially.

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