1

Mr Teddy Bear: "Time to review our family finances and consider where are we going. Let's get the facts and run the cold hard numbers."

Mummy Bear: "Oh daddy bear you are so cuddly when you talk tough"

Baby Bear: "I want a games station, mobile computer, princess bike and trust fund...Now!"







This post is about a few hypothetical scenarios entered into the NEWLY UPDATED financial time line planner.


The financial time line planner has received a little bit of tender and loving care in the last week. The following has been changed / added:
  • Mortgage calculations
  • Debt repayments
  • Improved graphics
  • Financial scenarios
Here we are going to look at three different type of people and see how the timeline works for them:
  1. A fun loving/carpe diem 25-year old on a professional career who loves #selfies
  2. A 35-year old looking to #downshift as fast a possible
  3. A clued up 25-year old who is going for #ExtremeEarlyRetirement
Party on! CEO, Playboy, Sports car, Mansion, Hawaii

Our first example is the one THE.CoNTeNDeR started out in life believing would make him happy... This was soon dashed by the property boom in the UK effectively resigning him to having to rent for teh rest of his life. This caused a huge shift in THE.CoNTeNDeR's financial mindset.

So here is a representation of an ambitious life and fun loving 25 year old looking to climb the corporate ladder. He is going to enjoy the high life and all the consumer goods on offer. The result shows the need for an ever increasing income to pay for the increasingly high life living costs. Although cash flow rich and materially wealthy on the outside he needs to keep the hamster wheel turning to avoid a nasty shock.

CLICK ON PICTURE !


I want to chill out and enjoy everything life has to offer

OK so the first scenario was not working out for THE.CoNTeNDeR and he was getting fed up of the rungs on the corporate ladder disappearing whilst putting in long hours in work. After reading a book on downshifting he started wondering what alternative life he could be leading.


Below is our hypothetical example of a 35-year old wanting to downshift. He has worked hard, saved a bit but still has some credit card debt. He has purchased a house which has a 25 year mortgage to pay off and needs a new car to get to and from work.

He sets a plan in place to reduce his spending as much as possible to save in his late 30's and 40's followed by a reduction in hours in his late 40's:

CLICK ON PICTURE!
I want to do what I want to do

This is the final scenario. Here is what a 25-year old CoNTeNDeR would have considered to reach  #financialindependence as soon as possible (10 years in this example). He delays a house purchase. Learns about investing and has his investments structured in low cost funds that return around 10% per year. He manages to save 10% of his salary into a pension (which is actually quite low considering the tax cost benefits). Is this what a financial independence plan can look like?


CLICK ON PICTURE!

Peace, prosperity and happiness

THE.CONTENDER

Welcome New CONTENDER Readers! Please take a look around.

* This tool is for a bit of fun playing around with a few financial planning numbers so that you can run your own life scenario if you'd like. The calculations can be carried out in different ways. Different taxation needs to be taken into consideration in different countries. No one knows THE.FuTuRe, especially investment returns and inflation numbers. Just a bit of fun!

Here you can find out about THE.CONTENDER and the purpose of the blog is or perhaps browse the all posts list, have a look at the pictures on the notice board. Please feel free to play with the planning tools and checklists.

Keep in Touch:  RSS Feed, follow THE.CONTENDER on Twitter or Facebook or subscribe to posts by email:


Post a Comment

  1. Looking forward to having a play with the excel spreadsheet with my own family numbers

    thanks from Living Cheap In London

    ReplyDelete

Are you planning for financial independence and wondering what to do with it. If so is any of the content on this blog of use to you? I would appreciate any comments you have. All the best C

Welcome to FISH !
You have come here looking for answers. How to get out of debt? How to save and invest? How to retire early and how you want to live in retirement.

Well this is the right place for you as out tribe has been through all of these steps. We no longer work for a corporate employer and have saved enough to retire early. How we did this is shared here on this site for you.

Our little tribe found out these secrets to financial independence in our late 20’s. Since then we have taken early retirement, in our late 30's, in just 7 years. We now live in the South West of France with our two young children.

Along the way I decided to share everything I learnt. My articles and tips on aggressive saving and compound investing are there to help you meet your financial goals fast. I discuss ways to help you decide what you want by building a life plan. This helps to work out how to get where you want to be whilst avoiding the pitfalls along the way.

My expertise was built up working in blue chip corporate jobs, extensive reading and putting it into practice. I have condensed this knowledge into simple strategies to help you meet your goals and not those of the bank or the place you work.

There are free planning tools on this site that help you make a life plan. A plan for your future. The tools calculate how to reach your financial goals in a timeline that suits you. The tools help set out your life goals, make them happen and how to exceed them.

There are tips on how to simplifying your life to remove day to day headaches. These include ways to pay off debt fast buy eliminating wasteful spending habits. How to reduce your monthly bills through choices that actually improve your health and wellbeing. Identifying things you don’t need that sap your time and wallet.

There are little sustainability projects to reduce your dependence on shops and utilities whilst saving money to spend on things you want.

All of these little steps will show you how save 50%+ of your salary so you can meet your goal whatever it is. This huge saving rate can be compounded for very early retirement. I am sure you will find something here for you.

Darren Lee (A.K.A the Contender as in my blog)

 
Top