Occasionally during our conversations, I’d ask Mrs Budget, what is the life we want to live.
What we do know is that, we want to be able to not worry about money, and have the freedom to do whatever we want to do, without worrying too much about money.
In the financial community, there is a popular movement called FIRE – financial independence, retire early. While we are not staunch believers of that, we unknowingly have been practicing certain things that are advocated by FIRE followers.
Basically, FIRE followers advocates that to retire early, you should have high savings rate.
To achieve that, you should either increase your income, or reduce your expenses, both of which resulting in savings which you accumulate for your retirement. The higher your savings rate, the more you have for your retirement, and the earlier you can retire assuming you have calculated how much you need annually to survive, and that annual expenses can be funded by your retirement income.
So 2 years ago, I’ve started to track my monthly expenses to find out how much exactly do I need (and then for Mrs Budget too) in order to retire early.
According to our current projection, assuming we don’t have any kids (we will!), we should be able to retire before 40 years old conservatively.
But we know that will change as we are planning to have at least 2 kids. Hence this will be a moving part of our retirement planning and we will be doing the calculations and sharing them here.
The bigger question on our quest to retire early is – what do we do after we have accumulated enough to live off our retirement income?
That’s probably something that we do not have an answer to yet.
I might probably be picking up new skills that I think interest me, for example, learning a musical instrument. Or I could be interested in just gaming daily.
The idea of waking up everyday to pursue interesting hobbies does appeal to us a lot, and hence forms the motivation for us to manage our finances prudently, while at the same time not be overly stingy in our daily lives.
So for now, here’s our measurable financial goals:
|Short Term||Year||Target||Current |
|Joint Equity Portfolio||2021||S$300,000||S$260,816|
|Joint Net Worth||2021||S$800,000||S$690,000|
|Joint Equity Portfolio||2027||S$1,000,000|
|Joint Net Worth||2027||S$2,000,000|
|Monthly Passive Income||2027||S$5,000|
|Monthly Passive Income||2033||S$10,000|
We will be tracking this annually to see if we are on track. 🙂
On top of financial goals, we also have life goals that we want to achieve. We understand that long term goals are hard to plan, hence we only have a rough idea of how our 3 to 5 years plan look like.
For now, it is:
|Year||Details||Mr Budget Age||Mrs Budget Age|
|2020 – 2021||Redeem Round The World Ticket||33||30|
|2021 – 2022||Baby 1||34||31|
|2022 – 2023||Baby 2||35||32|