Here’s how I am thinking about our long term savings.
Eventually we are not going to want to work, or at least we will want to step down from full employment to some form of partial employment. We need to fund that.
The easiest and funnest way we have to find that right now is through the accumulation of paper assets (stocks, bonds, cash on deposit). Real estate has turned into a little too much of a job and running a business isn’t as appealing as our day jobs – so for now paper assets it is.
This month we have saved $5,600 in our ‘never touch it again’, passive index fund portfolio.
Based on our current household expenses we need $27,924 a year in passive income to not work again, which is about $77 a day. Assuming a 4% safe withdrawal rate this month’s savings of $5,600 will give us 2.9 days of basic income, everyday, for the rest of our lives.
Yay, only 362 days to go.