update: ffree^carefree^ezlife #horizon explains that ffree analysis is dominated by big shocks, not Fuller Wealth.
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Hi YH,
“If you and your partner stopped working today, how many days could you survive financially on the money you have, maintaining your current lifestyle?” … That’s Buckminster Fuller’s definition of wealth.
What I shared about my “financial freedom” hinges on burn rate i.e. the amount I spend each month to keep an acceptable lifestyle. My family burn rate was up to SGD 6000/month including income taxes, new electronic items, vacations, air tickets for grandparents, but excluding mortgage and allowance to grandparents …. That is based on 2 years of detailed, cross-verified record.
As I said, if my wife and me both stop working, we would cut down to SGD 3500 ($2500 in USD), still maintaining an acceptable lifestyle.
Is USD 2500/month burn rate realistic for you or your peers, with two kids?
Yes Realistic for me because
- taxes S$700
- kids expenses add up to S$1900
- vacations + flights add up to about $400-800
- ….Eliminating these would cut burn rate to below S$3500 easily.
- Assumption: inflation is offset by rising rental income
- Assumption: no major medical cost incurred outside the hospital
- Assumption: Education cost is small up to high school. At university level, I will assume my kids can get a student loan or work to study.