Yes, that is a potato balancing on a calculator. haha i feel this image portrays the confusion and difficulties in calculating future finances. It turns out its relatively easy to calculate when you can retire.
The good guys at networthify.com have created the tool to make things very simple to calculate. This particular calculator was very beneficial in the forwards planing of how i dealt with my finances. It gives a good visual on what the parameters do towards FI.
It turns out the most important number in your path to financial Independence is your savings rate. Just $100 a week more savings will save 3 years off the FI path. Incredible. If that is not inspirational i don’t know what is.
Have a go, change the perimeters around and see how you can apply this to your calculations. Remember this is based on an investment return of 5% and a withdraw rate of 4% (This can be changed in the settings).
This calculator predicts i will reach FI in 3.5 years. However due to my investment being property it’s difficult to predict. I don’t know the average investment return per year.
Based on my savings predictions, i feel my predicted FI goal will take me closer to 5 years to achieve. Add in the comments how many years you have left for FI.
Happy saving, Kind regards,