I am doing a bit of tinkering with this site, and I wanted to restate clearly my goals. Contrary to the inspirational image to the left, I feel that if you don’t write your goals down clearly, they are much less likely to happen. I am still separating them into Long-term, Mid-term, and Monthly Goals:
I want to be financial free by the time I am age 55. I am 26 now. By financially free I mean that I can live a simple life without having to work a full-time job. I probably will work some, but I want the freedom not to have to. In order to this, I am estimating that I will need $50,000 a year in today’s dollars. Assuming 3% inflation a year, an 8% annual return on my investments, and a safe withdrawal rate of 4% a year during retirement, that will require $3 million dollars in 30 years ($1.2 million in today’s dollars). Wow! To be on pace to do that, according to my calcualtions, I will need about $1 million by age 45.
Therefore, my new long-term goal is $1 million by age 45, or in 19 years.
Based on my wife and I’s current school/job status, we will not be geographically stable until 2007. We plan on settling down and having kids in a very expensive area, and would like to buy the home we will live in for the foreseeable future then. Based on the current real estate prices, in order to get 20% down we will need $100,000 in non-retirement funds. Yes, this is a lot of money and very few people pay 20% down anymore. If we don’t have too, fine. But I think we can do it.
Therefore, my mid-term goal is $100,000 non-retirment funds by mid-2007, or in 26 months.
In order to reach my long- and mid-term goals, I try to set manageable smaller goals on a monthly basis. You can see my monthly goals and if I meet them by clicking on the Goals Category.