470 | The Spectrum of Financial Independence | Chris Hutchins
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Conservative Financial Planning and Opportunity Cost
Conservative financial planning suggests using a 3.25% withdrawal rate to ensure financial security based on extensive simulations. The 3% rule, equivalent to 33 times annual expenses, is considered ultra conservative. Security is crucial for peace of mind. However, the opportunity cost of such conservatism could be sacrificing years of one's life in unsatisfying work. The concept of financial independence allows freedom to work on own terms, pursuing activities out of passion rather than necessity, without having to conform to traditional retirement norms.
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