How much Money that you Need to Retired Today

Hi, Welcome to learn to lead

Here, You are going to learn what's Fire number, Inflation, how to calculate that
which factors need to consider before the calculation
and Finally know what's your fire number.

Let's start with - Fire number

Your Fire Number Calculation

What is the fire number?

Fire number is how much money that you need to live your entire life without doing any job. That's Your fire number.

The most common way to calculate the fire number is

Your Early expenses * 25 = Fire number

But here we are not added the inflation rate

Wait, what is inflation?  

I Understood, Let's see...

You buy something for a certain amount for a certain quantity.

The next year you can't buy the same thing for the same price in the same quantity.
Yes, right?

So, The product price becomes higher and higher
and you get less and less every year.

Which means our currency loses value every year. That's called Inflation.


That's why everyone buy gold instead of saving currency, because the gold price will go higher.

I hope You understand now. In India the inflation rate is 7% on average every year.

Sofar, We need to add this inflation rate 7 with old 25.

Also we have big expenses in our life

like Children's Education, Marriage and Medical expenses Need to added

For that I add 1% extra every year which means 8 is more fine

So, I add (common calculation) 25 + (with Inflation Adjusted and Big expenses added) 8   =  33

Let's do the Calculation :

Like I said,

Your Entire last Year expenses * 33 = Your Fire number

Example :
                  For mine my last year expense is

                  7.5 lacks * 33 = 24,750,000 .

                   For me around 2.5 crore is my fire number

Stop Reading.

Open Your Calculator,

Multiply Your Yearly expense  with 33 and know your fire number now...

This is how much money that you need to retire today.

Comment your fire number below and let me know.


If you don't do tracking your last year expenses , Don't worry...

You can learn how I track my last year expenses in the upcoming post.

And Check out my Other Post in the blog as well.

 

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Give us your valuable comments.

Thanks for reading.

                                           - Raja Karthikeyan.