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calculate:financial.independence [2018/12/03 04:56] dobrien [How much capital do I need?] |
calculate:financial.independence [2018/12/03 05:02] dobrien [How much capital do I need?] |
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| Assuming the the ROI after taxes, inflation etc... can be maintained at 4%, then the above formula collapses to: | Assuming the the ROI after taxes, inflation etc... can be maintained at 4%, then the above formula collapses to: | ||
| - | $$Required \mbox{ }Capital = 25* {yearly Expenses} $$ | + | $$Required \mbox{ }Capital = 25 * {yearly |
| Writing yearly expenses as a percentage of total income | Writing yearly expenses as a percentage of total income | ||
| $$Income = Expense + Savings $$ | $$Income = Expense + Savings $$ | ||
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| + | You can write | ||
| + | $$ Savings \mbox{ }Rate = \frac{savings}{Income} $$ | ||
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| + | This is the only parameter need to know how long it will take you to reach financial indepence assuming a 4% net ROI and that your expenses remain same after financial independence | ||
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| + | ^Savings Rate ^ Years to financial Independence ^ | ||
| + | | 15% | 43 | | ||
| + | | 25% | 37 | | ||
| + | | 35% | 25 | | ||
| + | | 50% | 17 | | ||
| + | | 65% | 11 |((https:// | ||
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