When will you have enough saved to generate enough money for all future expenses,

so that you can be independent of your salary/job? Use this calculator to find out
when you can achieve this financial freedom. It assumed you have no loans or liabilities
If you have other goals make sure the savings amt towards these goals are not part of this calculation
Fill only the green cells
Current annual income (takehome) 2500000
What % of income forms your expenses (excluding emi) 25%
What is your home loan emi 107461
% of your income you can invest towards financial freedom 40%
Increase in salary each year 10%
Current Assets 1000000
inflation 8%
Years in retirement 50
rate of return on your assets 10%
rate of return on your investments 10%
rate of return on your assets after you can stop working! 8%
% readiness of your corpus right now for financial freedom 3%
You can be financially free in (years) 21
Corpus you will need 162805499
Columns between C and Q contain the detailed tables
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When will you have enough saved to generate enough money for all future expenses, so that you can be independent of your salary/job? Use this calculator to find out
Financial freedom implies being debt free. You need to close out all your loans except a housing loan before you try this out (if have only one loan (any kind) then you can use this!)
With a housing loan you have two options close out the loan fast and then save for financial freedom (Scenario I) or
start saving now and achieve financial freedom wrt expenses and then quickly close out the home loan (Scenario II)
If financial freedom is a high priority then choosing the scenario which projects the shortest time to freedom makes sense. However:
If there is not much difference between the results of both scenarios then scenario II is better since it allows your investment to compond longer which is a bit safer
Also there are tax benefits if you continue your home loan. If you are already close to paying off your home loan then Scenario I maybe suitable if faster to achive and
financial freedom if that is of higher priority to you.
If you have other goals make sure the savings amt towards these goals are not part of this calculation
Make sure you enter the loan emi, interest rate, current outstanding loan amount and years left for paying correctly. These are not calculated by the file.
Fill only the green cells
Current annual income (takehome) 1200000
Annual expenses (excluding home loan emi) 360000
Home loan emi 37988
Annual investment towards other* goals 100000
Increase in salary each year 10%
inflation 8%
Years in retirement 25
rate of return on your investments 10%
rate of return on your assets after you can stop working! 8%
Outstanding loan amount 3431985
current home loan interest rate 11%
Years left for closing the home loan (rounded out) 16
Scenario I
You pay EMI + amt you can save each month this year***
toward your home loan and close it early
Then home loan will get closed after (years) 6.5
You then invest the entire amount you can save save plus
the emi amount to achieve financial freedom
You can be financially free in (years) 20
approximate corpus accumulated (lakhs) 448
*Goals other than financial freedom
** This is relevant only for scenario I. It is assumed that this lump sum is paid to the lender the following month
*** when your salary increases each year the extra amount for savings will be used for creating the financial freedom corpus
Columns between J and AK contain the detailed tables
# The emi is assumed to be same. Thus the principal component increases if the interest rate is reduced.
When will you have enough saved to generate enough money for all future expenses, so that you can be independent of your salary/job? Use this calculator to find out
Financial freedom implies being debt free. You need to close out all your loans except a housing loan before you try this out (if have only one loan (any kind) then you can use this!)
With a housing loan you have two options close out the loan fast and then save for financial freedom (Scenario I) or
start saving now and achieve financial freedom wrt expenses and then quickly close out the home loan (Scenario II)
If financial freedom is a high priority then choosing the scenario which projects the shortest time to freedom makes sense. However:
If there is not much difference between the results of both scenarios then scenario II is better since it allows your investment to compond longer which is a bit safer
Also there are tax benefits if you continue your home loan. If you are already close to paying off your home loan then Scenario I maybe suitable if faster to achive and
If you have other goals make sure the savings amt towards these goals are not part of this calculation
Make sure you enter the loan emi, interest rate, current outstanding loan amount and years left for paying correctly. These are not calculated by the file.
Wish to close loan early by paying a lump sum?** Yes
If so enter the lump sum amt. If no enter zero
The new outstanding loan amount is ** 3431985
If the new outstanding loan amount is below a certain threshold then
the interest rate could decrease (depending on the lender)#
If this is applicable in your case select 'Yes' else 'No' Yes
If 'Yes' then the revised interest rate is ** 10.50%
Net Current Assets (after accounting for the above) 700000
Rate of return on your assets 10%
% of your income you can invest towards financial freedom 23.68%
Amount you can save per month this year 23679
% readiness of your corpus right now for financial freedom 8%
Scenario II
You invest what you can each month and continue to pay
out your home loan as per original schedule
You can be financially free in (years) 20 wrt expenses
approximate corpus accumulated (lakhs) 429
At which time your outstanding loan amount will be 0
you then pay EMI+amt you can save each month towards
your loan you can close it after (years) 0.0
You can be financially and debt free in (years) 20.0
** This is relevant only for scenario I. It is assumed that this lump sum is paid to the lender the following month
*** when your salary increases each year the extra amount for savings will be used for creating the financial freedom corpus
# The emi is assumed to be same. Thus the principal component increases if the interest rate is reduced.
Financial freedom implies being debt free. You need to close out all your loans except a housing loan before you try this out (if have only one loan (any kind) then you can use this!)