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Financial Security oh Financial Security

What is financial security?




3 questions to ask myself?

  1. Twelve months of an emergency fund.
  2. Enough buffer to pay for your mortgages.
  3. Five or ten years’ worth of your current annual spending.

1. If I need 5k per month to spend, I need to standby 60k for emergency fund.

2. If my house loan is 1.5 k per month, I need 18 k per year to standby to my mortgage.

3. If I need to prepare for 5 years, it will be 350k, for 10 years is 600k. 

Number 3 very difficult to achieve.

Why??


  1. You don’t want to stop work, probably young enough to pivot (willingly or reluctantly) into another job.
  2. You just want a good margin of safety so that you can build your career back-up.
  3. You don’t want your family’s lifestyle to be compromised too much.


Source: https://investmentmoats.com/financial-independence/54-year-old-reader-retrenched/

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