Today we gonna play with numbers. There are a lot of arbitrarily set rules, but right know i will talk only about the ones that are essential for financial independence.
The 4% withdrawal rule: It's a rule of thumb used to determine the amount of funds to withdraw from a retirement account each year.
The rule of multiply by 25: This rule estimates how much money you'll need in retirement by multiplying your desired annual income by 25.
The rule of 30% : State that you should pay no more than 30% of your monthly income for your rent.
The rules of house end price: This area is a bit murky, but the experts agree that mortgage should be no more than 28-36% of your monthly income, i think we can safely apply the rule of 30% here too, and, here it comes, the house price should be no more than 2.5 x annual income. Where i can find a 45 thousands pounds flat, God only know!
Oh, and i leave it for last, the rule of 20/80. This rule state that we get 80% of our happiness and satisfaction from a mere 20% of our daily activities. Do them first, i'd say!
This website is about very early retirement and financial freedom, with a pinch of stoic minimalism and just the right amount of frugality. I started this journey in December 2014. You can join me and see when i will reach my goal. you can learn from my mistakes or give me the tips and tricks. Good luck and good journey.
Showing posts with label multiply by 25 rule. Show all posts
Showing posts with label multiply by 25 rule. Show all posts
Tuesday, 27 October 2015
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