Wednesday, 1 February 2017

FI32,47

It is the first day of the month, and I count my money.
It has been a tradition since 2009 to calculate my own net worth once a month (and not more often than that, unless I worry about money. So yes, more often than that. But not that often.)

I count all financial assets, except the value of my apartment as I need to live somewhere. I also do not count assets in pension systems that I have no access to or control over. I deduct all debt (although I have not had debt since 2010 when, even if it may not be the best thing to do tax-wise, I paid off the mortgage and the remaining student loans.

I divide the total amount of assets with an number that is my annual budget. It is the amount of money I can live on long term without making major changes to my lifestyle (because I have lived within this annual budget for many years no). There are months when I do not keep the monthly budget but that evens out over the year.

The number I get from the division is the number of years I can live on my assets (here I am hoping that the price increases will be covered by the increases in value on my assets). I also still have income, although I only work 80% since 2013.

This month I have a financial independence number of 32,47. This means that I can live for 32 and a half year on my assets with my current budget. It is no a glamorous lifestyle, it does not include many restaurant visits, no car, no luxury, no indulgence and I cut my own hair. But it is a lifestyle with books, studies, low-cost travels, camping and intellectual curiosity. I legally retire in 17 years so it should cover it.

I have spent the last six - fifteen - twenty-five, NO, SCRAP THAT - I have saved ALL MY LIFE, and very diligently the past six years to get to where I am today. I am grateful for my young me.

7 comments:

  1. Using your formula, I could live for 4 years in my current (rather extravagant) lifestyle or maybe 8 years frugally! I love your numbers. You are doing great.

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    1. There is peace and comfort in that knowledge, isn't there?

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  2. Grattis till ekonomiska oberoendet.
    Mina siffror är 39,73 Men jag räknar ju MÅNADER inte år....
    Som Fattigbonddräng får man vara glad för det lilla.

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  3. Do you take your life expectancy into account? I am older than you, but still buy green bananas in hopes that I will live long enough to see them ripen. :)

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    1. Your glass will always be half-full! With my gene-pool and having survived 40, I indeed am aware of life expectancy. I can fully expect 80, 85 possibly and 90 not unlikely, so my pension funds are set for "life-long" pay-out.

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  4. Helt fantastiskt. Det måste vara så skönt att kunna vara chef över sin egen tid :)

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