<< Back to all Blogs
Login or Create your own free blog
Layout:
Home > Slow progress
 

Slow progress

December 26th, 2011 at 01:52 pm

The gold standard toward which I aim, as a disciple of YMOYL ("Your Money or Your Life," by Joe Dominguez & Vicki Robbins) is "F.I.," financial independence, the point at which you can live off your investment earnings (plus any Social Security that you qualify for, once you reach retirement age). That generally takes retirement savings (a.k.a. investment capital) of 12 to 15 times earnings...so that someone who earned 50,000 a year would need to have 600-750K in order to consider retiring.

So a useful year-end metric is not just to look at percentage earnings, but at how much money your money earned. That actually matters more than the percent. If that number looks like income that you could live off of (or could live off of supplemented by the social security you can expect to get), you have a sense of how close to F.I. you are.

I sat down and did that calculation. This past year, my investments (basically my retirement accounts) earned me about $5000. Not hardly enough to live on, but it's a start.

0 Responses to “Slow progress”

Leave a Reply

(Note: If you were logged in, we could automatically fill in these fields for you.)
*
Will not be published.
   

* Please spell out the number 9.  [ Why? ]

vB Code: You can use these tags: [b] [i] [u] [url] [email]