See also

• cashflow low^high-ground — more vague, less precise
• US !” (Edit)”>conserver family disposable income: SG>US — an earlier blogpost, less revealing, less insightful. In contrast, today’s blogpost better captures the gist.

Earning (10k monthly) 120k/4k burn rate vs 180k/8k burn rate… between these scenarios, I would prefer the former.

— definition: Intuitively, I estimate a BurnRate BufferRatio as := annual_income/annual_outlay

• amortization … of large expenses like car, college fees.
• mortgage  [1] P+I … I counts towards burn rate, similar to HOA and pTax. P counts as investment similar to RSP. See exclusions below.
• Currency is irrelevant in such a ratio
• family burn rate bench-marking based on comparable level of Comfort
• luxury education [1] — a G2 component of burn rate. So far, this is under the “radar” i.e. my burn rate tracking system
  • SDXQ — special component

Note on college annual fees — Usually we can only afford the college education in the home country. Consider YLZ.

— These exclusions prove the rule.

• investment …  not counted as burn rate, such as rEstate principal payments
• healthcare reserve fund .. one of the biggest part of burn rate but under the “radar” , not counted as burn rate.

long-term care is one special target of healthcare reserve fund, seldom fully covered by any insurance. Insurance has limits.

— burn rate escalation driven by FOMO:

Across the cities I know, inflation drives up salary. Provided I am able to  compete on the job market till my 60’s, my family income would rise with inflation.

Now, most people in my circle spend more than I do, so the industry salary level (i.e. demand for tech skill) is driven by the average burn rate of my cohort. Therefore, my secret BRBR trick is about “how to keep burn rate down while staying in the leading pack”.

Driven by lifestyle creep and FOMO in consumerism, if you go for the latest and finest (eg: luxury education), then your burn rate will suffer because the latest and branded top-of-line commercial offering tend to cost the same regardless of currency 🙁 which means as expensive as in USD.

— comparing between countries, In SG my Higher buffer rate lifts us to cashflow high ground , relative to the U.S.

— protection: “Buffer” is in the sense of energy-absorbing buffer stop i.e. 缓冲器

As bachelor, I used to hit buffer ratio like 3 to 5. Such a high BRBR was very reassuring, comforting and satisfying, almost like a big insurance protection and a line of defense.

In the grand scheme of things, this protection is only one of top 5 protection — See G5 Shields@family_livelihood #600w.

— FCF (free cash flow)  — I will say FCF is a related barometer, defined as the remaining amount like 80k vs 100k in those 2 examples.

“Disposable income” doesn’t capture the gist of FCF.

— cash flow high/low ground — How is it related to BRBR?

[1] Big ticket items are less visible in monthly BRBR , more visible and relevant to high/low ground.