Author Topic: I just bought 2 days per year of free life, indefinitely. 363 to go.  (Read 21455 times)

FrugalSaver

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Re: I just bought 2 days per year of free life, indefinitely. 363 to go.
« Reply #100 on: February 02, 2017, 01:47:51 PM »
Since I'm around 7+ years away from my ideal FIRE I've realised it can be more motivating to look at what your day to day actions are worth.

My current cost of living is 25000 per year.

That means my cost per day is $68

I just invested $2000.

Assuming 7% returns over the long term (10+ years), without even taking into account compounding, the return on $2000 will be around $140 per year.

That's two days of financial independence, every year, for the rest of my life.

For every $1000 I save I have instantly bought 1 day of financial independence, every year, forever

Mid you get 7% that's close to double almost tue last 20 years. I do keep hoping we revert back to the mean.

yachi

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Re: I just bought 2 days per year of free life, indefinitely. 363 to go.
« Reply #101 on: February 02, 2017, 03:10:16 PM »
I like this calculation.
Stache growth will have me FI in 12 years.  With a 4% withdrawal rate, it'll be enough to continue making all the student loan and mortgage payments I'm making now.

A minute of Forever Freedom today costs me $2.  A minute of Forever Freedom in 12 years costs me only $0.85

So every $1 saved brings me one more minute close to FIRE!

mr_orange

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Re: I just bought 2 days per year of free life, indefinitely. 363 to go.
« Reply #102 on: February 02, 2017, 05:11:09 PM »
I'm up to 335.7 now.
12/30/16                                       06/30/17
Fire Totals:                                   Fire Projections:
-$7k/month - 68.1% Funded             86.1% Funded
-$8k/month - 59.6% Funded             75.4% Funded
-$9k/month - 53.0% Funded             67.0% Funded
-$10k/month - 47.7% Funded           60.3% Funded

-Calculus gives speculation the deceptive guise of investment ~Benjamin Graham
-The future ainít what it used to be ~Yogi Berra

spectre

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Re: I just bought 2 days per year of free life, indefinitely. 363 to go.
« Reply #103 on: February 02, 2017, 08:00:47 PM »
Probably want to reduce your real return assumptions to 4-5%

respond2u

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Re: I just bought 2 days per year of free life, indefinitely. 363 to go.
« Reply #104 on: February 02, 2017, 08:58:30 PM »
I do this every New Year based on my current net worth and my spending from the previous year. Here is the formula from my spreadsheet

=DATE(A2+1,1,1)+(D2/25)/(B2/365)
A2 = last year (eg 2015)
B2 = Spending from last year
D2 = Current Investments

My current day is January 25.

Thanks! I just added it to my spreadsheet.

You can geek it out a bit by getting rid of A2 so you don't have to keep updating it:
=DATE(Year(Today()),1,1)+(D2/25)/(B2/365)

Also, for those of us counting days, we could split out--
# of days paid for:
 = (D2/25)/(B2/365)

You could get really "I got too much time on your hand" by replacing 365 with
 =DATE(YEAR(TODAY())+1, 1, 1)-DATE(YEAR(TODAY()), 1, 1)
to account for leap years...




Vindicated

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Re: I just bought 2 days per year of free life, indefinitely. 363 to go.
« Reply #105 on: February 03, 2017, 09:19:03 AM »
I decided to add something like this to my spreadsheet too, even though I'm drastically behind most of you.

Days of Freedom Purchased!
=(Investment Total/25)/(-Month's Expense*12/365)

This connects the items that fluctuate so you can see the # of days until freedom each month.

"Investment Total" is my 401k + Other investments (No SS)
"Month's Expense" is what I actually spent that month.  This will help show that my spending directly affects my days until I have a full year of freedom.  I used a negative (-) to cancel out my spreadsheet investment being shown as negative.

Rhoon

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Re: I just bought 2 days per year of free life, indefinitely. 363 to go.
« Reply #106 on: February 05, 2017, 11:50:01 AM »
You can geek it out a bit by getting rid of A2 so you don't have to keep updating it:
=DATE(Year(Today()),1,1)+(D2/25)/(B2/365)

Also, for those of us counting days, we could split out--
# of days paid for:
 = (D2/25)/(B2/365)


Thanks for the calculation, I added this to my "date" section of my spreadsheet -- Currently March 15. For my calculation though, I'm using my projected expenses in FIRE based upon my family's current budget, excluding any debt, but including a Mortgage. If I exclude my mortgage expenses, I'd be up to May 27th.

Zikzin

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Re: I just bought 2 days per year of free life, indefinitely. 363 to go.
« Reply #107 on: February 05, 2017, 12:54:58 PM »
Wow this is mindblowing 0__0

Thanks OP!

Question:

With the 4% SWR formula, $2703/month which is 1 "forever day" will take 30 years to make it to $1M? is this correct?


Roothy

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Re: I just bought 2 days per year of free life, indefinitely. 363 to go.
« Reply #108 on: February 28, 2017, 12:02:58 PM »
"Number of retirement days endowed per year" is my new favorite way to mark progress.

As of today, I have endowed 243 days of freedom in perpetuity.  My goal is to endow at least 4 additional days per month.


mr_orange

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Re: I just bought 2 days per year of free life, indefinitely. 363 to go.
« Reply #109 on: February 28, 2017, 06:26:52 PM »
I'm up to 338.6 now.
12/30/16                                       06/30/17
Fire Totals:                                   Fire Projections:
-$7k/month - 68.1% Funded             86.1% Funded
-$8k/month - 59.6% Funded             75.4% Funded
-$9k/month - 53.0% Funded             67.0% Funded
-$10k/month - 47.7% Funded           60.3% Funded

-Calculus gives speculation the deceptive guise of investment ~Benjamin Graham
-The future ainít what it used to be ~Yogi Berra

Metric Mouse

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Re: I just bought 2 days per year of free life, indefinitely. 363 to go.
« Reply #110 on: March 04, 2017, 08:41:19 AM »
Wow this is mindblowing 0__0

Thanks OP!

Question:

With the 4% SWR formula, $2703/month which is 1 "forever day" will take 30 years to make it to $1M? is this correct?
I don't think that this is correct.
Give me one fine day of plain sailing weather and I can mess up anything.

MustacheMathTM

natb2347

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Re: I just bought 2 days per year of free life, indefinitely. 363 to go.
« Reply #111 on: March 07, 2017, 04:29:30 PM »
It really frustrates me when I have the passion and will power (and gaining the knowledge more and more on here and other sites) but I suck at math.  I try really hard to figure all this out but sometimes I don't trust my own math and assumptions to get this right.   Am I alone here?  I am still unsure about the math I have done to get my FIRE date right even though I have calculated it so many times (every site I use gives me vasty different numbers).  It feels like the majority of folks on here are little whizzes at crunching numbers.  Im envious.  Waving the white flag :(

Riff

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Re: I just bought 2 days per year of free life, indefinitely. 363 to go.
« Reply #112 on: March 07, 2017, 05:38:12 PM »
It really frustrates me when I have the passion and will power (and gaining the knowledge more and more on here and other sites) but I suck at math.  I try really hard to figure all this out but sometimes I don't trust my own math and assumptions to get this right.   Am I alone here?  I am still unsure about the math I have done to get my FIRE date right even though I have calculated it so many times (every site I use gives me vasty different numbers).  It feels like the majority of folks on here are little whizzes at crunching numbers.  Im envious.  Waving the white flag :(
Most FIRE dates are just educated guesses based anyway based on what the market will probably do over time.  FIRE is certainly a few years out for us yet, so whenever I play with the calculators it's a bit of fun speculation.  If we keep investing this much, and the market returns this much, holy moly, we'll have that much and can FIRE because we only spend this much.  Woot!

As far as this thread goes, I can share a quick little spreadsheet that I made inspired by this thread if you want it.

tarheeldan

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Re: I just bought 2 days per year of free life, indefinitely. 363 to go.
« Reply #113 on: March 07, 2017, 07:03:39 PM »
Up to 113 days :-) weee!

Vindicated

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Re: I just bought 2 days per year of free life, indefinitely. 363 to go.
« Reply #114 on: March 08, 2017, 07:03:02 AM »
It really frustrates me when I have the passion and will power (and gaining the knowledge more and more on here and other sites) but I suck at math.  I try really hard to figure all this out but sometimes I don't trust my own math and assumptions to get this right.   Am I alone here?  I am still unsure about the math I have done to get my FIRE date right even though I have calculated it so many times (every site I use gives me vasty different numbers).  It feels like the majority of folks on here are little whizzes at crunching numbers.  Im envious.  Waving the white flag :(

I think the most simple way to look at it is:

(Total Invested / 25) / 12 / (Average Monthly Spending) = %

So, if you have $600,000 saved, the 4% rule says you can expect $24k/yr in gains.

Dividing $24k/yr by 12, you can find what you get each month = $2k/mo.

Dividing $2k/mo by your average monthly spend (for me $3k) = 66% to goal.

Of course, if you plan to sell your home when you FIRE and travel, you can add the value of the home.  I only use Total Invested, because I plan to keep my home when I retire.

Note:  I just picked these numbers for simple math examples.

Roothy

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Re: I just bought 2 days per year of free life, indefinitely. 363 to go.
« Reply #115 on: March 08, 2017, 01:57:00 PM »
If you want to do "days endowed," in contrast, do this easy (though dirty) calculation:

How much do you want to spend per year?  For instance, "$40,000."

Divide $40,000 by 365, which is how much you want to spend per day: $110

If you are going to use the 4% rule, then you need 25X this amount to "endow" that day (because 4%X25=100%, but don't worry if you don't understand that--just trust me on the 25): $110 X 25 = $2750.

So every $2750 you save is one day you have endowed. 

How many days have you endowed?  Take your current nest egg, and divide by $2750.  Imagine it is $500,000: $500,000/$2750 = 181 days so far, and 365-181= 184 to go.

Wah-lah!

(By the way, it is "dirty" because you're not accounting for inflation.  If you are far away from retiring, that $40,000 amount is going to go up.  No worries--just every few years, redo the calculations with an updated yearly spend.)
« Last Edit: March 08, 2017, 01:59:17 PM by Roothy »

Metric Mouse

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Re: I just bought 2 days per year of free life, indefinitely. 363 to go.
« Reply #116 on: March 10, 2017, 06:36:08 AM »
If you want to do "days endowed," in contrast, do this easy (though dirty) calculation:

How much do you want to spend per year?  For instance, "$40,000."

Divide $40,000 by 365, which is how much you want to spend per day: $110

If you are going to use the 4% rule, then you need 25X this amount to "endow" that day (because 4%X25=100%, but don't worry if you don't understand that--just trust me on the 25): $110 X 25 = $2750.

So every $2750 you save is one day you have endowed. 

How many days have you endowed?  Take your current nest egg, and divide by $2750.  Imagine it is $500,000: $500,000/$2750 = 181 days so far, and 365-181= 184 to go.

Wah-lah!

(By the way, it is "dirty" because you're not accounting for inflation.  If you are far away from retiring, that $40,000 amount is going to go up.  No worries--just every few years, redo the calculations with an updated yearly spend.)
I think you are forgetting market returns and over stating inflation, unless all investments are in cash.
Give me one fine day of plain sailing weather and I can mess up anything.

MustacheMathTM

Roothy

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Re: I just bought 2 days per year of free life, indefinitely. 363 to go.
« Reply #117 on: March 10, 2017, 11:07:23 AM »
Yes it ignores market returns, too.  And it ignores inflation.  That's why it's quick and dirty.  The point was to give a poster who said he/she isn't good a math, a way to understand what we are doing.

A marginal increase in accuracy will come at a large cost in complexity.  The further you are away from planned retirement, the worse the inaccuracy. 

Blissful Biker

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Re: I just bought 2 days per year of free life, indefinitely. 363 to go.
« Reply #118 on: March 18, 2017, 06:07:11 PM »
Great way to look at it.  I've added this equation to my financial spreadsheet too.

I have bought myself 223 glorious days.  139 to go.