Exponential FI

How much do the things you buy really cost? What’s the best way to quantify that? Most things have a price tag, but is it really dollars you are concerned about? Vicki Robin and Joe Dominguez presented the concept of Life Energy in their book, Your Money or Your Life . With Life Energy, they show that there is a difference between what your “salary” is and the real earnings on your time. What you think you are making is reduced from one end by taxes and job-related expenses, like the cost of commuting, job specific clothes, or the things you buy to relieve stress from your job. On the other end, your effective hourly compensation is decreased by the time you waste getting ready for work, commuting, decompressing after work, taking vacations just to get away from work, and so on. Their website has a great calculator to help you get a feel for your real hourly wage. Ultimately, their point is that you are trading your life energy, your limited time on this earth, for mone...

To achieve Financial Independence, you will have to spend less than you earn, then save and invest the difference. Eventually, compounding returns will grow your wealth to a point where the continued growth outpaces your life's expenses. At its heart, a simple plan. However, it's easier said than done. Compounding returns are such a powerful ally that even a little invested savings can eventually get you there, but compounding requires time and often we live in the now. The money you meant to save can all too easily become the money you spent without intention. It helps to have a plan, to know what you are working towards. To be able to see the road ahead so you know where you are going. I created the FI Calculator for this purpose. The calculator uses a handful of inputs and simplifying assumptions to give you an idea of how long it will take to reach Financial Independence. You can also access the FI Calculator from the navigation bar at the top of the ...