Formula to calculate the date of FI

[FLBiker]

I was messing around with my net worth projecting Excel file (actually a Google Sheet) and I wanted to add a field that would predict the day that we'd hit a certain target (e.g. $1.5M).

To do this, I determined our annual net worth growth rate (looking at the last 8 years, for which I have good data).  This combines market increases (or decreases) with our additional investments -- about 17% per year.

I knew that the formula to then project that growth forward by Y years is: [current NW]*(1+[annual NW growth])^Y.  I've been out of school for a long time, so I wasn't sure how to solve for Y (if I ever knew that).  I asked ChatGPT -- I think this is the first time I've used it for anything.  It gave me this:

Y = log base 1+[annual NW growth] (1500000/[current NW])

I asked ChatGPT to put that in Google Sheets terms, and it told me:
=LOG(1500000/[current NW], 1+[annual NW growth])

I then brought that into my Google Sheet, and added some date fields, giving me this:
=LOG(1500000/[current NW],1+[annual NW growth])*365.25+[today's date]

As of today, it's projecting that we'll hit $1.5 million (our FI target) on March 13, 2024.

Will this date end up changing?  Almost certainly.  At the same time, it was fun to figure this out.

 

[AMandM]

Well that is nifty! Thank you, I just copied it.

[ender]

This made me put in my investment history since 2015, fit a trend line, and then use that to estimate when we'll be FI :)

If that trend line is right I guess I can retire in just around 9 years :)

[clarkfan1979]

I was messing around with my net worth projecting Excel file (actually a Google Sheet) and I wanted to add a field that would predict the day that we'd hit a certain target (e.g. $1.5M).

To do this, I determined our annual net worth growth rate (looking at the last 8 years, for which I have good data).  This combines market increases (or decreases) with our additional investments -- about 17% per year.

I knew that the formula to then project that growth forward by Y years is: [current NW]*(1+[annual NW growth])^Y.  I've been out of school for a long time, so I wasn't sure how to solve for Y (if I ever knew that).  I asked ChatGPT -- I think this is the first time I've used it for anything.  It gave me this:

Y = log base 1+[annual NW growth] (1500000/[current NW])

I asked ChatGPT to put that in Google Sheets terms, and it told me:
=LOG(1500000/[current NW], 1+[annual NW growth])

I then brought that into my Google Sheet, and added some date fields, giving me this:
=LOG(1500000/[current NW],1+[annual NW growth])*365.25+[today's date]

As of today, it's projecting that we'll hit $1.5 million (our FI target) on March 13, 2024.

Will this date end up changing?  Almost certainly.  At the same time, it was fun to figure this out.

I was playing with a spread sheet last week. I have a weird goal of making it to the top 1% of net worth, while also living a laid back, but meaningful lifestyle. We stopped doing "the grind" in May 2015.

I feel like I'm on cruise control. I do work as full-time faculty at a community college, but it's an easy and fun job. My spread sheet includes 3%/year raise, which then increases my contributions to my 401a by 3%/year. We currently put in 2K/month into Roth and brokerage. In the model, I assume no additional contributions beyond 2K/month for the rest of our life. My model is assuming 9%/year for stock growth. 

We currently have 2 million in rentals and 400K for a primary. I'm assuming 4%/year for appreciation. I know that might seem a little high, but I have a weighted average of 8.5% on appreciation for real estate over the past 15 years across 4 different properties.

If we continue on cruise control and don't really change anything, we will hit 13 million by age 70. 

[Chris Pascale]

Bumping up for the nerds.

[JupiterGreen]

Bumping up for the nerds.

Yeah not a nerd per se, but this is weird and awesome.