Last month I stumbled on the bursting of the 2nd dot-com bubble, a historical perspective of the fiat system & bitcoin and started working on my personal FIRE-handbook: Did the 2nd dot-com bubble burst? In my opinion, Yes. Look at the crazy corrections: So what? Time to buy the dip? I decided to stop buying… Continue reading
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How to do simple net worth projections?
I use 2 very simple methods to get a hint on where my net worth will be in X years: Take a simple savings rate calculator and add: actual net worth as starting point monthly saving amount period yearly yield (I only use 4% which is considered on the safer side if the money in… Continue reading
How to calculate my FIRE number?
The FIRE number is the net worth you need to have so that it (once invested) will support your expenses (until you die). That means, once you reached that amount, you are financially free. Here’s how you can calculate it Yearly expenses * 25 = YOUR FIRE NUMBER Example: Let’s assume your expenses are 50’000… Continue reading
How to calculate my savings rate?
The savings rate is the share of your income after you deducted all expenses: Expenses = 6’000 Income = 10’000 Savings = 4’000 Savings rate = 40% What is the savings rate for? The savings rate is one of the most important performance indicator for financial freedom, its tells you if you are moving towards… Continue reading
Crash Action Plan
Emotions are the reason why many investors buy high and sell low. In order to avoid that I try to detach my emotions from investing. The market is crashing in average every 12 years, so I should experience 7 crashes in my life and thought that having an action plan would be the way to… Continue reading
My personal FIRE Template
The main purpose of my FIRE Template is to achieve the goal of financial freedom. This template tells me where I am now, how for am I away from financial freedom and am I moving towards or away from it. How to use it? Click here to access it and make a copy. I suggest… Continue reading
How to calculate my assets?
Let’s look at the definition of an asset. The definition from Wikipedia is “…an asset is any resource owned or controlled by a business or an economic entity.” This means that everything you as a private person own and is valuable to somebody else is an asset. But not every asset is relevant for financial freedom, so I focus… Continue reading
Level 0: Know where you are
Most people I talked with about optimising their finances, didn’t know where they actually stand. Do you? If yes, you should be able to answer these questions precisely: My assets are: ____________ My debt is: ____________ My income is: ____________ My expenses are: ____________ Based on these 4 numbers, you can state: My net-worth is:… Continue reading
How to calculate my income?
Defining income sounds easy, but it actually isn’t. Even wikipedia has a hard time to define it, since the meaning differs from the perspective (law, economics, etc.). To keep it simple you can add up every income source you have, like: How to define the amount per Income source? I take the value which is… Continue reading
How to calculate my expenses?
Everything has a price and the monetary price you pay are your expenses. You can take most of them out of your ebanking / creditcard transactions and add the things you pay in cash. I group the expenses on a yearly basis (to keep it simple): Rent (or mortage payment) Food (at home and restaurants)… Continue reading