I am working on the climb towards $150,000 by the end of the year, and this month solidified my progress towards that goal. I was able to post gains pretty much across the board, and that was with a lot of travel expenses! I think the peak of my spending has already occurred as well, so it probably comes down to more of what the market is doing on whether or not I am able to hit my goal.With my current savings rate, I’ll probably fall just short of that goal – so there will need to be some sort of boost from the market if I’m going to make it there.
Here is my net worth after August:
This is basically where I’d like to see my finances every month. My checking account should be as close to a zero net gain as possible, with all my retirement accounts seeing increases from contributions and market gains. The only other things would be to erase that car loan and double all of those increases!
So let’s see how far my assets would actually take me at this point in time. I’m going to calculate that using my average spending over the last 12 months. I’ll then multiply that by 12 months to get the total spending for the year, and then divide my total net worth by that amount. That’s how long I’d be able to live off my savings at that point in time.
$2595 average spending last 12 Months * 12 Months = $31,140 spending in a year
$144,975 net worth / $31,140 spending per year = 4.66 years worth of spending
I also thought it would be cool to see the opposite, how much would I be able to withdraw each month? I set the rate of return at 4% as a conservative guess, and the retirement time period would be for 30 years.
I’d be able to withdraw $690 a month for 30 years which is 26.6% of my average monthly spending.
This is a solid increase, and it’s looking like there might be a very small chance that I’m able to hit that 30% goal by the end of the year. I have 4 months to go, and a little over 3% of ground to cover. It’s a stretch but doable.