What it means to me:
How to achieve Financial Freedom:
You will need to use a spreadsheet and make some assumptions. To download a spreadsheet which will allow you to calculate the time you will take to reach financial freedom, click here. (Download to be made available soon!)
The assumptions necessary are:
1. Rate of inflation, long term.
2. Return on various asset classes, long term. Eg. Equity returns around 14% plus in my country, so I would go with that for my equity investments. Similar assumptions are necessary for the debt investments, liquid investments and property (real estate) investment.
You would also have to plug in your current and projected rate of saving and your current assets, that is, your current investments which you wish to hold for achieving financial freedom.
The third set of estimates you would need to plug in are the amounts you need at specific times for additional expenses which you would not be meeting out of the income from your assets.
Financial Freedom has been defined in various ways. For me, financial freedom means
1. Having an income in excess of the current needs of my family.
2. Having an income which will also meet the future needs of my family and me.
Is it really possible to plan very much in advance? I believe it is, though there may be extenuating circumstances in which your plan may fail. For instance war or natural calamity may alter all your planning.
1. Having an income in excess of the current needs of my family.
2. Having an income which will also meet the future needs of my family and me.
Is it really possible to plan very much in advance? I believe it is, though there may be extenuating circumstances in which your plan may fail. For instance war or natural calamity may alter all your planning.
How to achieve Financial Freedom:
You will need to use a spreadsheet and make some assumptions. To download a spreadsheet which will allow you to calculate the time you will take to reach financial freedom, click here. (Download to be made available soon!)
The assumptions necessary are:
1. Rate of inflation, long term.
2. Return on various asset classes, long term. Eg. Equity returns around 14% plus in my country, so I would go with that for my equity investments. Similar assumptions are necessary for the debt investments, liquid investments and property (real estate) investment.
You would also have to plug in your current and projected rate of saving and your current assets, that is, your current investments which you wish to hold for achieving financial freedom.
The third set of estimates you would need to plug in are the amounts you need at specific times for additional expenses which you would not be meeting out of the income from your assets.
You also need to bear in mind that you may not achieve all your objectives owing to the unpredictable nature of the equity markets. Conversely, you may do so well that you have money to spare! If you make conservative estimates, there is no reason why you should not end up with money to spare rather than in the poor house! But more on that later!
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