Thursday, 1 December 2016

New Annual Budget 2017

I have for years calculated my financial independence as a division my total assets and a set annual budget.

This budget has remained the same for a very long time. It is not a very elaborate budget but I have comfortably lived within it for many years. It is a budget many people live within. It is also a budget above what both students, social services recipients and unemployed are expected to live on.

(On that note: It is a good idea to know what budget your authorities are expecting you to live on if you become long term ill or long term unemployed.)

My annual budget is of course higher than my annual costs.

Anyway, for the past year I have carried a financial independence number above 30.
This means, I hold assets to cover thirty years of my current annual budget.

This is way beyond what I need.
20 years from now I will - unless the sky falls on our heads - receive some form of pension covering at least something equivalent to my current costs (adding cost increases if related to inflation).

For 2017 I have decided to change my annual budget. This means that the financial independence number will change, probably all the down to 25.

I do not plan to increase my spending, just increasing the annual budget I use to calculate my independence. I am basically only increasing the security for my independence. 

And the amount is not the point. The point is having one that you can live within.

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