This is the wall chart from Your Money or Your Life and my daily motivation.
Here are my monthly expenses for the last few years.
Here are my monthly incomes for the last few years.
If you put them together, you can get a visual of the capital I used to first vanquish my student loans and now to fund my early retirement.
After paying off my loans, I started to invest. I’ll post my thoughts on investing in a later post. (Summary: Vanguard. Index Funds.)
- Inflation will be around 3%
- My investments will return around 7%
- Withdrawal Rate: I can take out 4% per year when I retire and the principal will not dwindle.
All of this translates into needing about 25 times my yearly expenses in investments. Here is the equation
(Net Worth) x (Withdrawal Rate) = Passive Yearly Income/12 = Passive Monthly Income.
My passive monthly income is what I then plot on my chart. Here are all three lines on one chart. And here is a close up of just expenses and passive income. As soon as they intersect, I will buy some coconut water to celebrate. 🙂 I’ll update this chart monthly.