??? 4% return on capital

he just doing the 4% spending rule in reverse... instead of savings * 4% = spending... he doing savings = spending / 4%

thanks for your reply. in all honesty i find the reported inflation rate on yearly basis a bit unpredictable and rather hard to gauge. furthermore some items goes down too instead of up albeit more on increase rather than decrease though. but i understand your point.
but to argue further, it should be inflation rate on the spending rather than an outright 7-9% return on savings. so it should be 4% + (4% * 4%) = 4.16% the following year and continue on subsequently, no?

yes i forgotten to factor in ang pow and phone/pc replacement say once every 3-5 years.
fyi i got my ip7 from launch and still using it although i think it's time for a change.
travelling is meant for local travel and the "upgrade" which has a factor of RM6k per annum allows me to travel yearly somewhere below that threshold or travel somewhere <rm12k every 2 years. does that make sense?

paid off props - yes
stocks with divvy yield - yes
but not intending to muzzle the already complicated calculation hence only concentrating on return from cash instead.
and forgot to mention, everything is based on individual for the time being.
as the saying goes, help yourself before helping others.

yup. with the slightly higher opr, FD rates are going back to 4% ish and EPF is 5% ish or more.
am taking 4% just to be prudent without taking into account other riskier return which carries some risk of decreasing my capital

angpow not just for cny yeah... wedding, pak kum, etc... but tbh not big money lah... i just throw these in because your list so detail...


ok. didn't see the upgrades. much better


nope... i go by... my money is her money... her money is her money... half your list covers spouse/kids already, might as well budget for all... its just planning anyways to give an idea what is needed...

if basic

1.7million x 1.03^35 = 4.78million

upgrade version roughly 6.2million

in chinese vocab, there is not really hav retirement.

ur spreadsheet shows u hav balance distribution of money across all expenditure categories for an individual.

I haven't take a look at excel but if you got 5%p.a dividend and it's growing say 5-6%p a you should be able to live off to infinity even with inflation at 4%p.a

If you wan to make sure your investment can outlive you. You might want to take a look at safe withdrawal rates by kyith from investmentmoats (warning wall of text) but you might find gems in there.

What to do in retirement
1. Travel with your spouse 1 country per year
2. Be there for your kids when they need you
3. Gardening , build your own mini farm and get vegetables from there. This will usually take up half a day
4. Volunteer at soup kitchen, animal shelters
5. Join those uncle and aunties for taichi every morning
6. Read books
7. Play computer games like Skyrim, red dead redemption, elden ring, fallout.

yeah, but I worry he thinks he should be targeting 4% return on capital. the 4% rule just works out how much drawdown a retiree can have from a diversified portfolio of certain criteria. It doesn't dictate the targeted return of capital.

yes, the inflation concern is on spending. Nonetheless, it is your assets/portfolio that is funding your spending. So to simplify the calculation, we either calculate everything in nominal terms or in inflation-adjusted terms.
(if you calculate your portfolio in nominal while spending in inflation-adjusted, your excel spreadsheet will get trickier.)

btw, the actual formula to adjust between nominal and inflation adjusted is (1+nominal) = (1+real) * (1+inflation).
I would hazard to guess that what you are trying to do in your formula a% + (b% * c%) is to say a is real return and b is spending and c is inflation, but summing them up doesn't mean anything as they are not of the same unit measurement. a relates to portfolio and b relates to spending.

Like what others say, there should be a misc item where you just throw some buffer in for spending. Sort of like emergency spending money, to account of error in planning.

I read your worksheet. you have kid? has he/she completed basic university education? if not better not retire until they can stand on their own. Why knows maybe their final 5 years need 1m

Instead of intricate budgeting, why not do a simple one. Tally all your credit cards monthly spending and all your cash withdrawal yearly, divide by 12 to get monthly average. There you will have your required monthly and yearly expenditure , which then you can calculate your requirements for retirement.

correct formula escalating current value to future value...

but is not what he needs

good list... should also add jaga cucu, n afternoon nap...

this is even more work... need to download 12 months of cc n bank statements... maybe across a few cc and banks... not to mention is backwards looking...

his way is easier imho... also he already done it, just asking if he missed any big ticket items...

no need to complicate stuff lah... hahaha... im sure he's not retiring the moment his savings hits 4% of spending...

this FI/RE thingy is new concept ? never heard of it until now. if retire early then do what?

escape from rat race... shake leg... enjoy life...

If you look at his spreadsheet, its fantasy wheras my way is reality.

Its not difficult with online banking to download monthly statements of credit cards and savings account. Been doing that as retired early for many years now. I also did a quarterly review so that can keep track.

Preserve n grow your accumulated wealth, dont have to work 9to5 for regular income.

It give you the options to continue working or to stop working anytime you like.
It is like an insurance that in case you are laid off, you still can survive without worry about next cheque coming in.

I understand this. I can stop working today if I want to. then what? sit at home do nothing. A week is fine but after that becomes restless.

I like working. there are so many different issues every day. different countries different problems. but at home. suddenly zero...

The whole FI/RE movement isn't for the school of thought that likes working.
I'm a believer in FI, not so much RE.

The RE isn't for everyone. Some want it, but those of us that enjoy our work, not so much.