If I never saved again…

I haven’t fully committed myself to a timeline for financial independence and early retirement. My numbers feel too fluid at this point to make any predictions. I have no idea how my income will progress. Being so far away from it, it feels a bit silly to try to make any predictions. What’s the point of a goal if the timeline has no meaning? Without a timeline, I’ve committed to saving as much as a can and I’ll leave it at that. It will happen when it happens.

What if, however, I could define the end goal? What is the earliest I could retire if everything completely fell apart today?

What if I never saved again?

I found a fancy formula on Reddit that solves for that exact answer. But first, let’s address a few assumptions.

• One: I don’t add anything to my investments
• Two: I never raid any of the invested assets I currently have.
• Three: All data is inflation adjusted and presented in today’s dollars.
• Four: My lifestyle doesn’t inflate.

The Formula!

X=LN((1+7%)^A*B/C)/LN((1+7%))

where A is my current age, B is my goal of investable assets (I used current annual expenses x 25), C is my current investable assets and 7% is my expected rate of return.

This formula was an amazing burst of fresh air. If I never invest another dime, this math should tell me when my investments can kick off a sufficient return to support me.

This formula is the End Game. With 100% reliance on math, I will be able to retire at the age it outputs.

What is my worst case scenario?

One person on Reddit got an answer of 96.11 years old. Time to save bud! A few others chimed in with answers between 54 and 65 years old.

To calculate my answer, I plugged in 29 for my age, and $1 million as my goal for investable assets. One million dollars should give me and Hubs a comfortable life. I don’t foresee that number going up much unless we can’t get our travel expenses under control.

Initially, I plugged in my current net worth for C. Solve for X.* If I never save again, I’d be financially independent at 71! That’s a good number, especially considering that I started actively saving last year.

However, the more I thought about it, my numbers were flawed. The $1 million covers expenses for me and Hubs. If its for just me, I don’t need that much.  The net worth number is also incredibly misleading because of the fluff in there. My car won’t return 7% over time, neither will my car fund or house fund. I cut the fat and only included investable assets. To be more precise, I included Hubs’ investable assets as well, for a sum of just over $100k.

The answer…. 61.88 years old!

If I never saved again, and lived off Hubs and my current invested assets, we could retire when I am 61.88 years old or THE SUMMER OF 2048! Never investing again and I will still be able to technically retire early! This isn’t Frugalwoods or MMM early, but by social security standards, I’ll still be able to retire early!

The amazing thing about 61.88 is that Hubs and I have already invested enough money for me to retire before my mom or dad did. That is a jaw dropping. (Thanks Hubs for the investing head start!)

61.88 is an exciting fun fact! This is a number I can project my retirement around because we all know that I can’t stop saving now 🙂

Here’s the link to Reddit if you want to see the original formula posted by aspiringFI_throwaway.

*I used Excel to solve for x. Let’s not get crazy and try to calculate this by hand.

When could you retire if you never saved again?

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November 2015 Net Worth

Hi! I’m back!

13 whole days in Florida and the Caribbean and I’m back without a tan. My sun screen skillz are top notch. Hubs and my favorite part of the trip was at Coral World, a marine life park. We got to swim with sea lions, which was incredible, but we also got to see a hungry pack of iguanas. Have you ever seen 20+ 3 foot long iguanas chomping down on a pile of lettuce and tomato? Now you have 🙂

This post is brought to you by a hungry iguana infestation! Look at ’em!

This post is also incredibly late so I’ll just jump right into the numbers! But first, a flashback!

[flashback]

November 2014: I bought a car!! My net worth dropped $13,575 as a result. I still had $18,596 in student loans.

November 2013: For being unemployed, I sure went to a lot of comedy shows! Maybe I needed the laughs to keep my spirits up. My calendar says I went to see at least 7 different comedy shows, including Brian Regan (my favorite!), Tom Segura, Josh Blue and 4 local comedians. I have a comedy problem.

November 2015: What happens when I leave $$ alone

Assets!

Retirement: $23,745 (+1,100)  If you were to imagine what a normal retirement saving month looked like, without any crazy gains or scary losses, this would be it. This month includes my recent bump to my 401k and normal IRA dollars. I checked yesterday and I only have 1 contribution left to my IRA for the year! Crazy, how the time flies when you are saving dollars.

Taxable: $8,485 I looked. It’s not pretty.  Here I am trying to appreciate my 16 year old saving self, and I keep losing money every update. It’s quite sad. 

Auto Value: $13,000  Valuing cars is stupid. I’m keeping this at $13,000 until the end of the year and then I’ll re-calculate. If anything happens to the car between now and then, I’ll also re-calculate. Recalculating, Recalculating. After that, I’ll update it every 6 months.

House Fund: $15,682 (+1,755) I see 15,000 reasons to be happy about this number. 682 extra reasons to do a dance. I’ve got less than $1000 to save to achieve Thing 1 by the end of the year! $771 in fact! We cashed flowed the vacation, so the first house fund contribution of the month was quite meager. I hope, I hope, I hope, I hope, I hope to achieve Thing 2 by the end of the year. Gosh darnit, if I can’t break into Thing 2 by the end of the year, I might boycott my own experiment. 

Round Two Progress: (What is Round Two? check here!)

• Baby Saver: $2125 ✔
• Middle Saver: $7953 (Loan value: $5828) ✔
• Thing 1: $16,453 (Loan value: $8500) >in progress<
  • Woot! $15,682 down, $771 to go!
• Things 2: $24,953 (Loan value: $8500)
• Big Momma: $45,330 (Loan value: $20,377)

HSA: $5,307 (+54)  The medical bills are here.I have a bill on the fridge that I’m waiting for the right mood to pay. By “right mood,” I’m spacing out paying the bills so they coincide with each round of paychecks. It’s taken 2 years to build up my HSA account and I’m doing everything I can not to see a monthly update in red. 

Car Fund: $275 (+50) This is fudging the numbers a bit, but by the time I checked this account after vacation, it had $300 in it. My heart welled with savings pride. I’m really saving! I’m not even messing with it!

Liabilities!

Student Loan: $0! Happy 8 months student loan free to me!

Car Loan: $9,096 (-$376)  This account is on auto payment, so I tend to forget about it. However, having it setting into 4 digits and about to break through $9000 has been fun. It’s a bit of a drag on my new worth, but at 1% interest, it feels like an effective use of money.

Overall:

• Net worth: $57,398. Up $3,335 from last month. 

A solid increase for November. $3,335 sounds exactly like an old student loan payment amount, which is wonderful and the whole point here. I wanted to stay on track with the momentum I had before throwing everything at my loans. It’s nice to see that coming true.

• Net worth increase: $129/day

I’m down a little bit for November, but this is still super excellent for the year.

How are you doing? Any big plans for the holidays?