tag:blogger.com,1999:blog-5465015914589377788.post7150867288086206427..comments2024-03-20T09:32:16.592-04:00Comments on Michael James on Money: Freedom, Not StuffMichael Jameshttp://www.blogger.com/profile/10362529610470788243noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-5465015914589377788.post-32850675578281922442010-09-22T00:57:09.559-04:002010-09-22T00:57:09.559-04:00@Patrick, I like that idea very much too. Innovat...@Patrick, I like that idea very much too. Innovative thinking, there.<br /><br />Personal finance guru Dave Ramsey has a similar measure to your freedom percentage called the "Pinnacle Point". The metaphor is that is the apex of the retirement savings hill you've been working to ascend. Once you're at the pinnacle, you just coast down the other side. He uses an overly optimistic 8% withdrawal rate. I think 4% is realistic.genehttps://www.blogger.com/profile/05608927986297939720noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-10354577204774408202010-09-21T10:34:57.453-04:002010-09-21T10:34:57.453-04:00@Patrick: I like the idea of an automatic "f...@Patrick: I like the idea of an automatic "freedom percentage" calculation. Maybe I'll add that one to my own spreadsheet.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-64992880426898700442010-09-21T10:27:25.504-04:002010-09-21T10:27:25.504-04:00Freedom is what it's all about. On my spreads...Freedom is what it's all about. On my spreadsheet, I have a column that calculates my <b>percentage freedom</b>. I take 4% of all my investments (from <a href="http://a-loonie-saved.blogspot.com/2009/12/is-4-rule-good-advice.html" rel="nofollow">the 4% rule</a>), giving the amount I can safely withdraw each year; then I divide this by my annual budget. When this hits 100% I could pay my entire budget from sustainable withdrawals from my investments.<br /><br />At this point I'm still hovering around the single digits, but I take heart from knowing that my peak saving years are in my future, while my peak spending years are probably right now, so things should only get better.<br /><br />Incidentally, by this measure, the typical advice to save up 6 months' expenses amounts to only 2% freedom, which I think is a starkly accurate characterization of most people's financial state.Patrickhttps://www.blogger.com/profile/16816252455472704262noreply@blogger.com