How much money does a person need to save to become rich?
By rocky777
@rocky777 (353)
India
April 9, 2007 3:31am CST
If your annual expenses are 100,000 and if inflation is 6% per annum, and your savings earn you 8% per annum, how much money do you need to save to earn you an annual income of 100,000?
Obviously, if your investments earn you 100,000 every year, you could survive indefinitely on an investment of 5,000,000 - that will earn you a real return of 100,000 So that is your financial freedom figure! If you can survive on less than 2%, you will become very very rich (in you old age - ha, ha!)
Any comments or views?
3 responses
@tombiz (2036)
• Philippines
11 Jul 07
Here in the Philippines, we need at least 10 million to be fully financially free while doing nothing. However, if you have a million, you better invest your money here in an agricultural land and just plant coconuts, once they are grown, it is enough to make you live comfortably.
1 person likes this
@rocky777 (353)
• India
12 Jul 07
My ancestors did that, here in India and boy, are they rich? They have nothing to show for all those coconut trees they planted. (I did not inherit any of the riches!) If you are going to buy land and plant coconut trees, you better make sure you live around your coconut trees, or else theft will leave you nothing - anyway that is what is happening here. Besides, the rate at which coconut prices are increasing, they do not keep pace with inflation, at least not so for the last 15-20 years. Better to be diversified - one coconut farm, one condo in california, one gold mine in Africa, etc. etc. etc., but that does not include my favourite investment, stocks in India!
@gaynor_ranger (13)
•
10 Jul 07
If you had a million dollars or sterling in the bank you could live off the interest for the rest of your life !! woo
1 person likes this
@rocky777 (353)
• India
9 Apr 07
Depends on what you want to do with your life when you are young! Or old for that matter! If you do want to secure the livelihood of your near and dear, it makes sense to Save with a capital S. But yes, it would definitely be more interesting to be able to save when you are old and spend when you are young!
