Sunday, 24 March 2019

Financial Future Plan

What is your Financial Plan?  this means planning of your finances in the current situation.

Let me do a little bit of twist, to avoid boring financial plans, we will call it "Financial FUTURE Plan". This means planning for your future, it's not only about the Budgeting or Cash Flows Monthly.

Before we go to the Financial Future Plan, I want you to check "How much do you really need to retire?

A simple calculations will do, the total monthly living expenses for example: 

Rent                       18,000
Food                      14,000
Transportation         4,800
Medical                   2,016
Kids Education     24,480
Leisure                    2,400
Total Monthly       65,696

If I will retire today with a consistent expenses for next 20 years, here is the calculation of the amount needed to be saved:

65,696 * 12 = 788, 352 Yearly Expenses
788, 352 * 20 = 15, 767, 040 Next 20 years expenses

I need an amount of 15, 767,040 to cover my next 20 years expenses, the expenses will increase due to inflation, educational cost, etc. etc. excluding those factors and use it as a baseline for retirement. 

Let's say I was able to save today the amount 15, 767,040, what should I do with the money.

788, 352           Current Accounts Deposit for 1 year Expenses
1,576,704         Reserve on Savings Account for Emergency Funds
4,730,112         Mutual Funds Account for Educational Funds
4, 171, 872       Portfolio of Stocks to grow for Retirement Funds 
3,500,000         Real Estate for House ( Rent Expense will be remove later)
1,000,000         Business Fund (This money will be used for start up business)

Why the 15,767,040 will be  divided into different accounts? this is already set for expected expenses but we don't want to lose the opportunity to grow it.

The amount  15,767,040  savings will be to feel free from any financial worries(psychological effects). You know that you already have the money and ready to retire but always remember on the setting of accounts, that money will not sleep on the account instead will grow for future that is the main reason we call it "Financial FUTURE Plan".

Why not to prepare your Financial FUTURE Plan?

Hoping to see you achieve your Financial Freedom.

Sincerely yours,

Jonathan Ruiz
Newbie Mentor


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