Medicated Money

Saturday, May 13, 2006

Long Term Goals - Part III

The future is something which everyone reaches at the rate of sixty minutes an hour, whatever he does, whoever he is. -C.S. Lewis

After getting the numbers correct (I think) thanks to MonkeyVersusRobot, we wanted to sit down and talk about reasons why we may not reach those numbers. It definitely is very easy (as I didn't show) to sit down, figure out what you should do in financial planning, plug those numbers into a calculator, and be amazed at what the results show. The problem is that in actuality, life happens and hitting those numbers many are quite difficult.

After discussing the numbers, we created a list of life events that could negatively affect these numbers. Our list included many personal problems such as job loss and health concerns as well as national concerns such as the stock market crashing and burning. In the grand scheme of things, it is quite difficult to plan for every twist and bump in the road to retirement. Our plan and, therefore, our 'Number' are very difficult to put our thumb on, and almost impossible to predict at this stage of our life.

After much discussion and 'working the pencil,' instead of finding our 'Number' and long term goal, the goal found us. We decided that our long term goal should be divided into two segments and involve ideas instead of numbers!

So without further ado, we present our long term plans in order for us to achieve these goals:

Our first goal is to raise a loving family with Ms. Medicated as a stay-at-home mother and working part-time when our schedule allows.

Our second goal is to be completely debt free by age 35. This includes everything from our current personal debts, student loans, and future mortgage. In order to do this, we plan to use the following financial plan to obtain this:

  • Retirement - 25%
  • Taxes - 21%
  • Living Expenses - 27%
  • Paying Off Debt - 27%

Our last goal is to retire from our current working situation at age 60. At age 35, we plan to switch our current percentages to look like this:

  • Retirement - 25%
  • Taxes - 25%
  • Living Expenses - 30%
  • Savings & Investments - 20%

With this plan, we anticipate that our true 'number' can be fairly close to the 'Number' discussed in our previous post. We feel that with this plan, it will be easier to take each twist and turn in the road easier because we are not trying to hit a goal, but rather living a lifestyle that is comfortable at the moment yet is planning for the future. Only time will time, though, whether this is a solid plan or not.

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