![]() Reply to This Thread Comment (required) Name (required) Email (required, always hashed, never used nor published) Website (optional) Post comment Note that comments won't appear until approved. ![]() I just did a quick excel sheet, and the answer to that question that looks like around 24 years: year a savings rate of 0%) how long would it take to reach a 50% savings rate if you get a 3% raise every year and save it? For instance, if your income currently equals you expenses (i.e. While I found it interesting, I think that the simple math is lacking, well, math, so I wanted to dig a bit deeper and figure out where the numbers came. Money Mostache’s The Shockingly Simple Math Behind Early Retirement. Check out this chart:Ģ comments for The Math Behind The Shockingly Simple Math Behind Early RetirementĪt that point, I’m not sure it could be solved in a single equation, although I could see something along the lines of how long would it take you to reach a certain savings rate. One of the more popular articles in the financial independence blogosphere is Mr. Lastly, one nice thing about this math is that it isn’t linear - it has a nice curve to it. Episode 36: The Shockingly Simple Math Behind Early. My guess would be either he had multiple interest periods annually (versus my one) or that fact that his assumption of 5% returns included being adjusted for inflation. Optimal Living Daily: Reading you the best content on personal development, productivity, and minimalism. Each row looks something like this: =A2-5 Let’s try plugging the numbers in to see if I get the same results Mr. This explains why, if you’re able to save 100% of your income, then you can retire right now: you have no expenses! ![]() 100% of your income = expense rate % + savings rate % ![]()
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