Saturday, April 16, 2005

Future Goals

Side note: I have on eBay sale going on right now and this should add to my net worth. Total cost: $55, total estimated sale $125, total profit = $70 which is a 127% gain.

Future Goals

May 2005: $25,000

Current Age: 23

Here is my thinking. I'm assuming my salary is $40,000 and I'm assuming my take-home pay is 80% of this so: $32,000. By month this should be around $2,650. I'm going to assume that rent and other miscellaneous expenses will run about $1500/month. This should leave $1,150/month for investing. Per year this will be $13,800 but I will round up to $14,000.
Assuming 0% growth I will have (starting with an estimated $24,000) about $122,000
I plan to go for a growth target that might be slightly high, 15%.
Based on this growth target, my goal for age 30 will be:
$218,000
Note: this does not take into account bonuses or raises in salary.

Age 40: I will use the age 30 goal, but now change some of the factors. I will assume that my salary will be higher, but possibly expenses. To take this into account I will change the money left over for investing from $14,000 to $17,000. The growth rate will be changed to 12%.
Goal for age 40:
$975,000

Age 50: Basically the same thing as age 40. I will up the $17k to $20,000 and change the growth rate to 10%.
Goal for age 50:
about $2,850,000

These are really flexible assumptions, since it's hard to forecast certain expenses and things like that. Right now I'm keeping that $25,000 goal in sight. Once May passes, I will focus on the goal for age 30 and most likely make smaller goals for that time period.

2 comments:

stockdiva said...

Hey, check out this website which has all sorts of great financial calculators that I know you will enjoy. Here’s the link - http://www.dinkytown.net/

Alpha said...

stockdiva, thanks for the link!

that site had some very cool calcuators, and I ended up spending a good amount of time there, thanks again.