### Author Topic: What are the Mustachian milestones for saving?  (Read 36881 times)

#### arebelspy

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##### Re: What are the Mustachian milestones for saving?
« Reply #50 on: February 25, 2014, 10:18:52 AM »
Here is an interesting calculator.

http://networthify.com/calculator/earlyretirement?income=50000&initialBalance=0&expenses=20000&annualPct=5&withdrawalRate=4

Yeah, Networthify is good for calculating time to FI.  (Not sure of its relevance to this topic, re: milestones, it doesn't know if you're "ahead" or "behind" or what your age is or anything.)
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

#### T-Rex

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##### Re: What are the Mustachian milestones for saving?
« Reply #51 on: February 25, 2014, 10:54:32 AM »
Here is an interesting calculator.

http://networthify.com/calculator/earlyretirement?income=50000&initialBalance=0&expenses=20000&annualPct=5&withdrawalRate=4

Yeah, Networthify is good for calculating time to FI.  (Not sure of its relevance to this topic, re: milestones, it doesn't know if you're "ahead" or "behind" or what your age is or anything.)

I just used it to attempt to project future milestones/hypothetical situations, as a sort of abstract supplement to the methods discussed upthread. By the way, I am learning tons here & I started a journal, if you want to look, hint hint.

#### bekkah

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##### Re: What are the Mustachian milestones for saving?
« Reply #52 on: February 25, 2014, 11:03:31 AM »
arebelspy, I am loving your calculator! Thank you for posting it.

Question for you -

The 0.075 used in the regular formula is lower than my net worth whereas the 0.15 used in the uber-badass formula is twice as much as my current net worth.

Is it okay to change the decimal amount? For instance, if I input 0.10, I am right on target. My goal would then be to save enough to match the amount using 0.11 and then 0.12 and then so on until I reach 0.15.

Does this make sense? I don't want to "cheat" the calculator! And I confess math is not my strong suit.

#### CommonCents

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##### Re: What are the Mustachian milestones for saving?
« Reply #53 on: February 25, 2014, 12:17:54 PM »
Bekkah, I think this is why my stats professor made us choose the significance level before the experiment, not afterwards bc you skew the results.  It's just for you, so you can play around with the tool however you like.  That said, selecting a goal you've already met is probably not as useful.

#### FrugalZony

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##### Re: What are the Mustachian milestones for saving?
« Reply #54 on: February 25, 2014, 01:06:22 PM »
Mine are not as sophisticated as some of the formulas posted above:

I have 4 Basic Milestones, that I run two kinds of calculations with (one including house value and one without)
At some point (aka the tipping point) house value will become relevant, as I will want to downsize, freeing up some capital,
until that moment, I neglect house value, as I do live in a paid off house, which is reflected in the expenses

It's real simple
I have two budgets: a bare bones budget (BB) and a projected FIRE budget, which is higher than the BB, as I am planning to travel more when Fire and want other buffers as well.

Milestone 1      25x BB   considering all assets except the house

Milestone 2      25x FIRE   considering all assets except the house

Milestone 3      33x BB   considering all assets except the house

Milestone 4      33x FIRE   considering all assets except the house

Milestone #4 is my ideal, but if something happens and my job gets too sucky, requires relocation or whatever, I know I can factor in that part of the house value, that could be freed up by
downsizing, in order to speed things up.
So, I do track the same set of Milestones factoring in that value including the house.

I call Milestone 1 the FU milestone ;), which should be reached sometime next year (13 months from now, if I manage to stick to projections, but my world right now is turning upside down, so who knows). My stretch goal is to hit it before the end of the year, which is a challenge, but possible if no major disaster happens.

#### arebelspy

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##### Re: What are the Mustachian milestones for saving?
« Reply #55 on: February 25, 2014, 01:09:09 PM »
Milestone 1      25x BB   considering all assets except the house
Milestone 2      25x FIRE   considering all assets except the house
Milestone 3      33x BB   considering all assets except the house
Milestone 4      33x FIRE   considering all assets except the house

Have you run the actual numbers and 25x fire comes before 33x bb?  For me your milestone 2 and 3 should be switched.
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

#### arebelspy

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##### Re: What are the Mustachian milestones for saving?
« Reply #56 on: February 25, 2014, 01:11:17 PM »
arebelspy, I am loving your calculator! Thank you for posting it.

Question for you -

The 0.075 used in the regular formula is lower than my net worth whereas the 0.15 used in the uber-badass formula is twice as much as my current net worth.

Is it okay to change the decimal amount? For instance, if I input 0.10, I am right on target. My goal would then be to save enough to match the amount using 0.11 and then 0.12 and then so on until I reach 0.15.

Does this make sense? I don't want to "cheat" the calculator! And I confess math is not my strong suit.

I pretty much agree with what CommonCents said.

What you should take those results as saying is: You are on track, but could push it even better.

If I were you I'd leave it at the .15 level, then add a year to the age, two years, etc. and see what the formula says you should be at in 1-2 years, 5 years, etc. and see what you need to do to get there (what savings rate, etc.).  :)
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

#### FrugalZony

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##### Re: What are the Mustachian milestones for saving?
« Reply #57 on: February 25, 2014, 01:40:31 PM »
Milestone 1      25x BB   considering all assets except the house
Milestone 2      25x FIRE   considering all assets except the house
Milestone 3      33x BB   considering all assets except the house
Milestone 4      33x FIRE   considering all assets except the house

Have you run the actual numbers and 25x fire comes before 33x bb?  For me your milestone 2 and 3 should be switched.

It's funny you say that, when I first set up the tables, I did have them in the order you suggest, as per gut feeling
Then I plugged in my numbers and I realized I needed to switch MS2 and MS3 to where they are now
The reason being that my FIRE amount is 25% higher than the BB amount
If it were 33% higher than the order would be reversed
Makes mathematically sense when you think about it, but I was surprised anyways ;)

..and btw, they are indeed reversed when factoring in the house ;)
« Last Edit: February 25, 2014, 01:42:28 PM by FrugalZony »

#### sleepyguy

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##### Re: What are the Mustachian milestones for saving?
« Reply #58 on: February 25, 2014, 01:48:33 PM »
Pretty cool calculator!  I projected we could retire in 5-7yrs, it estimated 4.1yrs :)  Yeah... we're a bit risk adverse :)

#### arebelspy

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##### Re: What are the Mustachian milestones for saving?
« Reply #59 on: February 25, 2014, 03:34:43 PM »
Milestone 1      25x BB   considering all assets except the house
Milestone 2      25x FIRE   considering all assets except the house
Milestone 3      33x BB   considering all assets except the house
Milestone 4      33x FIRE   considering all assets except the house

Have you run the actual numbers and 25x fire comes before 33x bb?  For me your milestone 2 and 3 should be switched.

It's funny you say that, when I first set up the tables, I did have them in the order you suggest, as per gut feeling
Then I plugged in my numbers and I realized I needed to switch MS2 and MS3 to where they are now
The reason being that my FIRE amount is 25% higher than the BB amount
If it were 33% higher than the order would be reversed
Makes mathematically sense when you think about it, but I was surprised anyways ;)

..and btw, they are indeed reversed when factoring in the house ;)

Yeah, I was just wondering if you had run the numbers or not.  Your barebones (BB) and bigger FIRE budget are pretty close then.

My FIRE amount is double my BB amount.  (Well actually I don't have a BB amount, my current spending is what I use for BB, my BB amount would be cut down way from my current spending level).
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

#### FrugalZony

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##### Re: What are the Mustachian milestones for saving?
« Reply #60 on: February 25, 2014, 03:58:26 PM »
Milestone 1      25x BB   considering all assets except the house
Milestone 2      25x FIRE   considering all assets except the house
Milestone 3      33x BB   considering all assets except the house
Milestone 4      33x FIRE   considering all assets except the house

Have you run the actual numbers and 25x fire comes before 33x bb?  For me your milestone 2 and 3 should be switched.

It's funny you say that, when I first set up the tables, I did have them in the order you suggest, as per gut feeling
Then I plugged in my numbers and I realized I needed to switch MS2 and MS3 to where they are now
The reason being that my FIRE amount is 25% higher than the BB amount
If it were 33% higher than the order would be reversed
Makes mathematically sense when you think about it, but I was surprised anyways ;)

..and btw, they are indeed reversed when factoring in the house ;)

Yeah, I was just wondering if you had run the numbers or not.  Your barebones (BB) and bigger FIRE budget are pretty close then.

My FIRE amount is double my BB amount.  (Well actually I don't have a BB amount, my current spending is what I use for BB, my BB amount would be cut down way from my current spending level).

Wow, yes, when I set Fire = 2x BB that makes a HUGE impact.
My BB is current spending too, which could be cut more if needed, but not by a whole lot without moving (the biggest junk of current expenses are mostly linked to the house)
I could probably shave off another 10-15% to get to real bare bones in "as is" state, but then frugal fatigue would be setting in real quick.

#### NinetyFour

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##### Re: What are the Mustachian milestones for saving?
« Reply #61 on: February 25, 2014, 04:55:18 PM »
Rebel Spy--

I'm curious about your FIRE budget.  And I'm even more curious about your present spending.  Elsewhere, I think you have said that you and your wife spend when you want to spend, yet your numbers are really low.  I'm wondering how you manage that.  I know you don't have a budget that guides your spending, but can you give rough numbers of what you do spend and in what categories?  (If you are comfortable doing so.)

#### dragoncar

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##### Re: What are the Mustachian milestones for saving?
« Reply #62 on: February 25, 2014, 05:00:39 PM »
Rebel Spy--

I'm curious about your FIRE budget.  And I'm even more curious about your present spending.  Elsewhere, I think you have said that you and your wife spend when you want to spend, yet your numbers are really low.  I'm wondering how you manage that.  I know you don't have a budget that guides your spending, but can you give rough numbers of what you do spend and in what categories?  (If you are comfortable doing so.)

From what I gather, he just doesn't want much.  See https://forum.mrmoneymustache.com/ask-a-mustachian/what-happens-if-you-strike-it-rich/

#### arebelspy

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##### Re: What are the Mustachian milestones for saving?
« Reply #63 on: February 25, 2014, 07:30:09 PM »
Rebel Spy--

I'm curious about your FIRE budget.  And I'm even more curious about your present spending.  Elsewhere, I think you have said that you and your wife spend when you want to spend, yet your numbers are really low.  I'm wondering how you manage that.  I know you don't have a budget that guides your spending, but can you give rough numbers of what you do spend and in what categories?  (If you are comfortable doing so.)

Present spending is mentioned in this thread.

About 20-22k typically, not counting taxes.

As dragoncar pointed out, our spending is low because our wants are low, as discussed in this thread: https://forum.mrmoneymustache.com/ask-a-mustachian/what-happens-if-you-strike-it-rich/

Regarding my FIRE budget, I actually have no idea what everything will cost, as our plan involves having a kid, and traveling full time in FIRE.  Kids and travel can both be expensive (though they can be done cheaply as well), but there's obviously a lot of unknown variables in expenses for both of those things.

So I'm shooting for final real estate income before FIRE of between 60-70k (net, after healthy amounts are set aside for reserves, conservative assumptions on all other costs, vacancies, repairs, etc.), with a (wildly pulled out of my ass guesstimate) budget of 45-50k spending.

Feel free to ask any (more specific) questions, I'm pretty open.
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

#### NinetyFour

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##### Re: What are the Mustachian milestones for saving?
« Reply #64 on: February 25, 2014, 07:38:15 PM »
Rebel--I was hoping to see your spending within categories (food, internet, cable, clothing, utilities, etc).  Sorry that probably wasn't clear earlier.  Just out of curiosity.

I know you said in another thread that you and your wife spent about \$18,000 in 2013, total.  I (all by myself!) spent about \$16,000 (not including housing, homeowner's insurance, and property tax)!  I thought I was doing well, but when I saw your spending, I was gobsmacked (and I am not sure I have ever before used that word).

I know you don't want much, and neither do I.  But I still wonder how you spend so little.

I'm sure whatever you can share will help me to examine my spending more closely and find places to cut.

Hope that is clearer.

Thanks.

#### arebelspy

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##### Re: What are the Mustachian milestones for saving?
« Reply #65 on: February 25, 2014, 09:06:29 PM »
No problem. Here is the 2013 spending averaged out per month.

Housing (Mortgage + HOA + Home Insurance + Property Taxes): \$499
Utilities (Electricity, Water/Sewage, Garbage): \$55
Cell Phones: \$63
Food: \$277 (203 Groceries, 33 Fast Food, 41 Restaurants)
Student Loans: \$109
Travel: \$55
Auto: \$226
Shopping ("Stuff"): \$74
Other/Misc (Financial, Insurance, Health and Fitness, Pets, etc): \$200

Total/mo: ~\$1558
Yearly Total: ~\$18700
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

#### NinetyFour

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##### Re: What are the Mustachian milestones for saving?
« Reply #66 on: February 25, 2014, 09:31:42 PM »
Thanks for sharing!  Quite impressive!!  And inspirational!

#### Jags4186

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##### Re: What are the Mustachian milestones for saving?
« Reply #67 on: February 26, 2014, 07:11:23 AM »
That .15 version of the formula is awfully aggressive and gets more "out of whack" the older you get.

Unless I'm doing it wrong (very possible) a 45 year old with a 90k salary should have \$3.7 million saved.

To put that in perspective, if you saved \$4166/mo (50k/yr) for 23 years at 8% interest you'd wind up with \$3 million flat.

Don't really see how that's possible unless you are a for realz investor, incredibly lucky, or received a windfall.

#### arebelspy

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##### Re: What are the Mustachian milestones for saving?
« Reply #68 on: February 26, 2014, 07:54:18 AM »
That .15 version of the formula is awfully aggressive and gets more "out of whack" the older you get.

Unless I'm doing it wrong (very possible) a 45 year old with a 90k salary should have \$3.7 million saved.

To put that in perspective, if you saved \$4166/mo (50k/yr) for 23 years at 8% interest you'd wind up with \$3 million flat.

Don't really see how that's possible unless you are a for realz investor, incredibly lucky, or received a windfall.

Hmm.  I'm not seeing the issue with that example; I'd anticipate having well above that if I kept working to 45.

Yes, at the higher ages it does get large. That's the issue with using exponents.  ;)

Theoretically, a Mustachian wouldn't be working 23 years, but have hit their FIRE number.  At that point net worth milestones become useless.

Or, if they were still working, they'd have started their own business and be worth much more than the formula indicates.

Unless, of course, they weren't chasing money, but cutting back hours, etc. etc.  Then why would they be worried about reaching milestones?

This formula is for people striving for FI - i.e. still working for money.  If you are still working for money after 23 years, and are Mustachian, yes, I'd expect you to have multiple millions.  And there are many examples of that on these forums as well as the E-R.org forums.

As discussed earlier (when talking about how one could tweak for this or that, age started working, etc. etc.), without doing fancy if/then statements it's hard (impossible?) to get one robust formula that works for every situation.

Hope that helps explain.  :)
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

#### aclarridge

• Guest
##### Re: What are the Mustachian milestones for saving?
« Reply #69 on: February 26, 2014, 09:07:39 AM »
Somehow we got ahead of ARS's formula for now, but when I project it forward it overtakes my projections bigtime at like age 45. At that point the exponential is really taking off more than mine.

It's fairly close overall though, for the relevant bit (accumulation phase). Good target to shoot for. Thanks ARS for this!

I was curious so I took a hypothetical example of somebody who started saving at 20, earned 60k a year to start, had 3% salary increases, 7% investment returns, 2% spending inflation, spends 35k to start, and is taxed at 25%. I attached the spreadsheet. Looks like ARS's method is pretty conservative, using those assumptions. Anyway the main thing I wanted to see was what the exponential coefficient was going to be, and it's close to .15. However the trendline doesn't fit that well, just because there are many more low net worth data points than high ones naturally, so they take priority and it looks like a poor fit for the higher ones. Like I said, fits the accumulation stage pretty well. Once you're past a million or so maybe it makes sense to re-fit another model if you care enough at that point.

#### sol

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##### Re: What are the Mustachian milestones for saving?
« Reply #70 on: February 26, 2014, 09:13:40 AM »
Hmm.  I'm not seeing the issue with that example; I'd anticipate having well above that if I kept working to 45.

Seems about right to me, too.  I think if you're surprised that 50k/year at 8% for 23 years will hit 3 million dollars then you haven't yet spent much time understanding compound interest.

That's kind of the whole point of this site.  Money you invest instead of spend can work for you, making more money to invest.  Or spend.

Our current plan involves saving more than 50k/year and having less than 3 million, but working far less than 23 years.

And the beauty is that each person gets to pick where on that spectrum they want to fall.  Want vast wealth?  Then work longer and save more.  Want to retire sooner?  Spend less and save more.  This isn't rocket science, people.

#### Jags4186

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##### Re: What are the Mustachian milestones for saving?
« Reply #71 on: February 26, 2014, 09:48:06 AM »
Sol,

I'm not surprised by any if the numbers I gave. I simply stated that according to the calculator if you, at age 45, made 90k a year it spits out you should have \$3.7 million saved.

I then said if you saved 50k a year with an 8% return you'd only have \$3 million.

That's a disconnect. If you're 45 making 90k you most likely weren't 22 making 90k. For sake of argument say you got 3% raises every year from 22 to 45. You would have started at 45k (most likely you started lower and got larger raises). So it would be impossible to save 50k every year putting you short of even that goal.

#### arebelspy

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##### Re: What are the Mustachian milestones for saving?
« Reply #72 on: February 26, 2014, 10:39:32 AM »
Sol,

I'm not surprised by any if the numbers I gave. I simply stated that according to the calculator if you, at age 45, made 90k a year it spits out you should have \$3.7 million saved.

I then said if you saved 50k a year with an 8% return you'd only have \$3 million.

That's a disconnect. If you're 45 making 90k you most likely weren't 22 making 90k. For sake of argument say you got 3% raises every year from 22 to 45. You would have started at 45k (most likely you started lower and got larger raises). So it would be impossible to save 50k every year putting you short of even that goal.

Did you look at FI40's spreadsheet three posts up?  He points out that the .15 may in fact be too conservative.  You say it may be too aggressive.

/shrug

Choose whatever number gives you warm fuzzies.

I maintain that the .15 target is a solid Mustachian target.
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

#### Jags4186

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##### Re: What are the Mustachian milestones for saving?
« Reply #73 on: February 26, 2014, 10:53:49 AM »
Did you look at FI40's spreadsheet three posts up?  He points out that the .15 may in fact be too conservative.  You say it may be too aggressive.

/shrug

Choose whatever number gives you warm fuzzies.

I maintain that the .15 target is a solid Mustachian target.

Yes I checked out the spread sheet.  It's not correct.  It assumes that your salary remains at a constant 60k on the ARS side of the table.

I assume 45 starting work at 22...so I'll use his 43 year old numbers has he has the hypothetical person starting to work at 20.

60k at 3% increases for 23 years puts you at a final salary of \$118415.  Using your .15 calculator, the person should have a savings of \$4.916 million--not \$695,300 on the ARS side.

On the column E calculation, he is off by \$3.6 million.

HUGE discrepancies.

However I will say, his column E seems to be pretty accurate in terms of what can be accomplished by saving a significant amount of your income.
« Last Edit: February 26, 2014, 10:59:57 AM by Jags4186 »

#### Jags4186

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##### Re: What are the Mustachian milestones for saving?
« Reply #74 on: February 26, 2014, 11:18:56 AM »
I'll face punch myself on this one...looks like I had an extra parenthesis which caused the numbers to more than double.  FI40s table is still wrong on the ARS side (doesn't take account the salary increases)...but the numbers are much closer.

A 45 year old with a 90k income would have \$1.4 million saved at age 45 with your .15 calculation...not \$3.9 mil.

Totally within the realm of possibilities.

Apologies for the commotion--the numbers just didn't make sense which is why I was so confused with all of this.
« Last Edit: February 26, 2014, 11:28:29 AM by Jags4186 »

#### arebelspy

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##### Re: What are the Mustachian milestones for saving?
« Reply #75 on: February 26, 2014, 12:11:20 PM »
I'll face punch myself on this one...looks like I had an extra parenthesis which caused the numbers to more than double.  FI40s table is still wrong on the ARS side (doesn't take account the salary increases)...but the numbers are much closer.

A 45 year old with a 90k income would have \$1.4 million saved at age 45 with your .15 calculation...not \$3.9 mil.

Totally within the realm of possibilities.

Apologies for the commotion--the numbers just didn't make sense which is why I was so confused with all of this.

You are right that it assumes the same salary for the whole time.

Glad you figured out your numbers and it seems more realistic to you now.  :)
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

#### aclarridge

• Guest
##### Re: What are the Mustachian milestones for saving?
« Reply #76 on: February 26, 2014, 12:25:47 PM »
FI40s table is still wrong on the ARS side (doesn't take account the salary increases)...but the numbers are much closer.

Oh. I thought the formula was used for projections, using your current gross salary today. Therefore it makes no explicit assumptions about salary increases.
Is that not your intention ARS?

#### dragoncar

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##### Re: What are the Mustachian milestones for saving?
« Reply #77 on: February 26, 2014, 12:31:17 PM »
ARS - thanks for the calculator.  I like it a lot.  Mostly because the UAW equation makes me look like a complete loser (I think because my salary has increased a lot).

I don't really have milestones, because I can't control the market.  But I try to keep my savings rate and raw spending in line with others here.

#### Jags4186

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##### Re: What are the Mustachian milestones for saving?
« Reply #78 on: February 26, 2014, 12:39:23 PM »
FI40s table is still wrong on the ARS side (doesn't take account the salary increases)...but the numbers are much closer.

Oh. I thought the formula was used for projections, using your current gross salary today. Therefore it makes no explicit assumptions about salary increases.
Is that not your intention ARS?

I think the intention was "if you make X today, you should have Y saved".  So if you are 40 years old and make 100k, you should have X saved.  Not you're 25 years old and make X, you should have Y saved at age 40 which I believe is how you are looking at it.

#### 5inatrailer

• Posts: 58
##### Re: What are the Mustachian milestones for saving?
« Reply #79 on: February 26, 2014, 02:19:40 PM »
I actually got a 8.0/9.0 in university math but that was 20 years ago...

Age 36-20= 16
16x.075= 1.2
-1= .2
80k X annual salary= 16,000\$ if so Im ok...

#### aclarridge

• Guest
##### Re: What are the Mustachian milestones for saving?
« Reply #80 on: February 26, 2014, 02:34:36 PM »
FI40s table is still wrong on the ARS side (doesn't take account the salary increases)...but the numbers are much closer.

Oh. I thought the formula was used for projections, using your current gross salary today. Therefore it makes no explicit assumptions about salary increases.
Is that not your intention ARS?

I think the intention was "if you make X today, you should have Y saved".  So if you are 40 years old and make 100k, you should have X saved.  Not you're 25 years old and make X, you should have Y saved at age 40 which I believe is how you are looking at it.

Huh, ok. When I make that change the best fit line of my estimated amount is actually a lot closer to ARS's projection. Cool stuff.

#### Jags4186

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##### Re: What are the Mustachian milestones for saving?
« Reply #81 on: February 26, 2014, 02:47:30 PM »
I actually got a 8.0/9.0 in university math but that was 20 years ago...

Age 36-20= 16
16x.075= 1.2
-1= .2
80k X annual salary= 16,000\$ if so Im ok...

You should have:

(80000) * (e^(.075(36-20)-1))= \$97,712

Or

ARS's MMM equation

(80000) * (e^(.15(36-20)-1))= \$324,416

#### 5inatrailer

• Posts: 58
##### Re: What are the Mustachian milestones for saving?
« Reply #82 on: February 26, 2014, 03:10:47 PM »
Thanks- I'm somewhere in the middle.  But if real estate markets crash here in Canada, that number is going to change...

what does e^ mean? what value is e? exponential? 80,000 to the power of the other numbers?

#### warfreak2

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##### Re: What are the Mustachian milestones for saving?
« Reply #83 on: February 26, 2014, 03:40:29 PM »
I presume it's the mathematical constant e ≈ 2.71828

#### dragoncar

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##### Re: What are the Mustachian milestones for saving?
« Reply #84 on: February 26, 2014, 04:20:12 PM »
I presume it's the mathematical constant e ≈ 2.71828

Come on, people it was just e day a few weeks ago.  I better not hear you asking about pi in late March.

#### Fastfwd

• Stubble
• Posts: 198
##### Re: What are the Mustachian milestones for saving?
« Reply #85 on: February 27, 2014, 06:44:02 AM »
I have just two milestones.
- Being debt fee including mortgage
- Being financially independant

All the rest are just numbers along a graph. Mortgage end and FI are where you see the line change course  :)

#### aclarridge

• Guest
##### Re: What are the Mustachian milestones for saving?
« Reply #86 on: February 27, 2014, 07:14:43 AM »
I presume it's the mathematical constant e ≈ 2.71828

Come on, people it was just e day a few weeks ago.  I better not hear you asking about pi in late mid March.

FTFY

#### arebelspy

• Senior Mustachian
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##### Re: What are the Mustachian milestones for saving?
« Reply #87 on: February 27, 2014, 07:23:56 AM »
I presume it's the mathematical constant e ≈ 2.71828

Come on, people it was just e day a few weeks ago.  I better not hear you asking about pi in late mid March.

FTFY

He said it correctly.

The context is it was just e day.  He'd better not hear you ask about pi day in late March (which would be just after Pi day, which itself is in mid-March).
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

#### matchewed

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##### Re: What are the Mustachian milestones for saving?
« Reply #88 on: February 27, 2014, 07:39:52 AM »
Pi day does not exist. There is only Tau day.

#### dragoncar

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##### Re: What are the Mustachian milestones for saving?
« Reply #89 on: February 27, 2014, 11:01:41 AM »
Pi day does not exist. There is only Tau day.

Are we allowed to celebrate half-Tau day?

#### 5inatrailer

• Posts: 58
##### Re: What are the Mustachian milestones for saving?
« Reply #90 on: February 27, 2014, 11:03:35 AM »
Pi is 3.14 There I said it.

If you don't like it, come and find me and bring your pointy protractors to stab me with.

FWIW, I appreciate the little help.  Thanks dudes.
I am somewhere between 97k and 314k. Hard to calculate my pension when they keep proposing changes every 2 months.  As of now it's platinum plated.

I'm starting to save like it won't exist by then.  If so, then awesome. 14 great years left.

#### Elaine

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##### Re: What are the Mustachian milestones for saving?
« Reply #91 on: February 27, 2014, 12:28:14 PM »
Another thank you shout out to arebelspy! I was so discouraged when I used the millionaire next door equation until I realized (duh) that it didn't work since I only had three years of professional work experience behind me. Thanks!

#### ch12

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##### Re: What are the Mustachian milestones for saving?
« Reply #92 on: February 27, 2014, 06:12:53 PM »
I have just two milestones.
- Being debt free including mortgage
- Being financially independent

All the rest are just numbers along a graph. Mortgage end and FI are where you see the line change course  :)

Yep.

I remember seeing a thread about 2013 in review. I was really envious of everyone else, but then I realized I had more than 2x my January 1, 2013 net worth. I started my first job. I started from not a ton of money and ended with double not a ton of money. If you start with \$100 and end the year with \$200, is that cause for celebration? My numbers are considerably higher (four years of expenses in January 2014 - still not in the realm of "a ton of money"), but to me it feels the same.

#### matchewed

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##### Re: What are the Mustachian milestones for saving?
« Reply #93 on: February 27, 2014, 07:32:53 PM »
Pi day does not exist. There is only Tau day.

Are we allowed to celebrate half-Tau day?

... I'll submit a request to the proper authorities... but no promises, they can be grumpy in the morning.

#### dragoncar

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##### Re: What are the Mustachian milestones for saving?
« Reply #94 on: February 27, 2014, 09:23:39 PM »
Pi day does not exist. There is only Tau day.

Are we allowed to celebrate half-Tau day?

... I'll submit a request to the proper authorities... but no promises, they can be grumpy in the morning.

At least pie is delicious.  What do you eat on tau day?  Two pies?  Actually, I'm sold.

#### aclarridge

• Guest
##### Re: What are the Mustachian milestones for saving?
« Reply #95 on: February 28, 2014, 07:30:48 AM »
I presume it's the mathematical constant e ≈ 2.71828

Come on, people it was just e day a few weeks ago.  I better not hear you asking about pi in late mid March.

FTFY

He said it correctly.

The context is it was just e day.  He'd better not hear you ask about pi day in late March (which would be just after Pi day, which itself is in mid-March).

#### arebelspy

• Senior Mustachian
• Posts: 28476
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• Location: Seattle, WA
##### Re: What are the Mustachian milestones for saving?
« Reply #96 on: March 11, 2014, 09:47:39 AM »
Yeah, I mentioned that one in my initial post in this thread, but the problem is that it's terrible at the extremes - much too high for younger people, much too low for older people.
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

#### ender

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##### Re: What are the Mustachian milestones for saving?
« Reply #97 on: March 11, 2014, 07:03:01 PM »
Yeah, I mentioned that one in my initial post in this thread, but the problem is that it's terrible at the extremes - much too high for younger people, much too low for older people.

I guess if you want to error on those extremes, those are the directions to error.

#### arebelspy

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##### Re: What are the Mustachian milestones for saving?
« Reply #98 on: March 11, 2014, 08:20:51 PM »
Yeah, I mentioned that one in my initial post in this thread, but the problem is that it's terrible at the extremes - much too high for younger people, much too low for older people.

I guess if you want to error on those extremes, those are the directions to error.

Really?  Cause then old people will think they're okay with just a few hundred thousand.  That's not ideal, IMO.

Skewing everyone high isn't the worst thing, but skewing a scenario low is dangerous.
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

#### Strawberrykiwi75

• Stubble
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• Location: New Zealand
##### Re: What are the Mustachian milestones for saving?
« Reply #99 on: March 18, 2014, 04:32:52 AM »
Love the formula, thanks! According to that, I should be at about 55k (I'm 24), I'm at 174k! Wahoo! (Full disclosure, I did inherit 100). Good to know that even without that I'm ahead :-)