My main goal is to retire somewhere between 33 and 36, in Portugal, for which I need a net worth of about €670k-€680k (this takes inflation of 2% during 8 years into account – i.e. I estimate that €670k today have the same buying power as €572k will have in 2024).
In today’s euros, I estimate that such a portfolio (primarily composed of stocks and real estate) will generate a net salary of about €33000/yr (this takes an average net yield of 8% and 28% tax into account). To play safe, I will estimate an average net yield of 7%, which results in €29000/yr (also with a 28% tax). I will break this down into 4%, for my salary (which is €16500/yr, enough to live comfortably in Portugal [note that I won’t have to pay for rent]), 2% to cover inflation and 1% for portfolio growth.
My secondary goal is to become a millionaire (possibly not in today’s money!) before 40. If I retire by 34 with a portfolio of €670k, in 6 years I will add €40k+ passively. From my salary, I will take 4500€ per year for savings, which compounded at 7% is another €40k+. This will leave me a 250k gap, which I will have to fill with some extra revenue streams. For every year I put off my retirement after I am 34, I add another 33k passively.
After I grow my portfolio to €1m, I will stop caring about money forever. My complete strategy is available here.
In terms of net worth, here’s the projection of my goal over the years:
You can see that the difference, in terms of percentage, will decrease with my age,on average. For example, this year I will increase my net worth by 43%, but at the age of 36 I will only have to increase it by 10% to meet my goal. This means that the effort will be smaller as time goes by. I am expected to change job in the next years as well, but I expect to earn more or less the same salary, which should add another €15K-€20K to my net worth a year. The profits from my portfolio will exclusively be used to grow the portfolio until I retire. About 50%-60% of my wealth growth will come from real estate (rental properties).
Goals of this blog
– Update my portfolio, net worth and monthly balance at least once a month
– Provide you with all my knowledge
– Interact with other bloggers