You know how we’re always wanting more money no matter how much we already have? Or how we’re always getting impatient with ourselves, even though we know we’re doing okay and it just takes a gazillion years to get to financial freedom?
Well, I just stumbled across this BRILLIANT idea by Chris at KeepingThrifty.com and it’s totally helping me to *appreciate* my money more. He dubbed it “Retirement Freedom“, and in a nutshell it’s a quick way to tell if you can retire at a normal age based on how much you’ve already saved up to this point.
In other words, if you never invested another penny again, could you retire safely by the time you’re 65 years old? And if not, how much more would you need – either time or investments?
This is great because it not only gets you to appreciate the hard work *you’ve already put in*, but it also helps you slow down time and get a better forecast of the future. And why rush through the next two or three decades to see if you can retire then when you can find out now? ;)
Time is always > than money.
(Another way to put things in perspective? Ask yourself if you’d rather be Warren Buffet or remain yourself? You might want to answer Mr. Buffett, but unless you desire to be 86 years old right now you’ll want to reconsider that ;) No one’s found a way to buy more life yet, right?)
So, how do you determine if you’ve hit Retirement Freedom or not?
There’s a spreadsheet for that.
You can grab it here or by clicking through Chris’ blog, and after a few short entries it’ll pop you out your status, complete with nerdy graph and all. And here’s the best part – for all the new people starting out their journeys, as long as you have $1.00 or more invested it’ll extrapolate it over the years and show you just how much an effect it’ll have, even if you’re miles from hitting “Retirement Freedom.” All money invested grows exponentially.
Fill it out and see where you land!
I just did it and it showed I’d need $3,506,110 by the time I hit 65 to retire safely (25x yearly expenses + inflation and all that good stuff), and after inputting our current investments ($547,416) it shows we’d have a total pot of $4,651,476 by then – a million more than needed, woo! We’ve hit Retirement Freedom – party time!!! Haha…
Of course, if we stopped contributing now we’d have to be okay with waiting 28 more years to retire, which we’re not, but still – talk about putting things in perspective. Even my wife who hates talking about money took a few seconds to listen to me before going back to whatever it was she was doing. And that’s a few seconds more than usual, so you know it’s good! :)
It’s been a few days now since first coming across this, and I really can’t understate the amount it’s shifted my thinking so far. I do my best to be appreciative and try to envision a great future, but I’ll be the first to admit that I need to be shocked into reality sometimes. And this is certainly doing the trick.
Do yourself a favor too and read more about this idea here, and then come back and let us know what it showed for you. You can watch your money grow, and you don’t even have to age a bit! ;)
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!