Thursday, April 4, 2013

Forward Income Projections

Conservative Assumptions:

Dividends, existing deposits, and new deposits invested at a 3.5% yield

Dividend growth 1.5% above inflation.  I want to project in today's dollars.  Raw dollars tell me very little.  I will buy fixed income assets too, I do not want to rely 100% on stocks.  Fixed income has no dividend growth.

Deposits of $500 per month.  I can easily save $1,000 a month while in Korea, but I will be leaving soon.  I intend to have children and may be getting married in the next 1-2 years.  Deposits will be tough, but I should be able make more as my career progresses.



Assuming everything goes to plan, I'll be sitting on roughly $1,300/month (2013 dollars) in dividends!  This will be a great addition to a military pension and would make me financially independent!

With a little luck and a lot of planning, I may be able to retire before age 50.  A lot can go wrong here, but I believe this is very achievable. 

8 comments:

  1. The 2028 target retirement date of $16k annual dividend income includes military retirement right?

    Good luck in your pre age 50 goal. Thats mine too and I think I am on track.

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    1. Yes the pension will be my main income source. It would be somewhere around $2,100 - $2,400+ per month (with yearly COLA adjustments) depending on my final rank. Dividends and interest will bridge the gap between my income needs and the pension payouts. I might buy an annuity too.

      1,300 per month is not enough for the kind of retirement I have in mind. I am pretty frugal, but not extreme.

      Cheers!

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    2. Those goals look amazing! I like your conservative way of looking into projecting your income and focusing on "real dollars". I think that you will be able to save more than $500/month, because your "real earnings" will increase faster if you get good promotions.

      I hope the tensions with North Korea are not going to impact you. Thank you for working to make us all safe!

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    3. Thanks DGI! Yes my income will go up, that's a fact. I foresee my expenses going up too. This little excercise was supposed to use conservative numbers. In reality I know I'll save more than $500 per month.

      Korea can be a pain sometimes, but I have remember many of my brothers in arms are over in Afghanistan right now. This is a cake walk compared to that. I spent a couple years in the Middle East and I hope I never go back. However if my country needs me to deploy, I'll do it with a smile on my face.

      If I do deploy again my savings rate will be astronomical.

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  2. This is an awesome way to motivate and see how consistent saving and investing over the course of the next 15 years will really pay off!

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    1. My plan was to suck it up and save a lot in the beginning so I don't have to be as extreme later. Compounding requires time.

      I've now put myself in a position where I only need to save $500/month after I leave Korea to realize my dream. As long as I stay in the military anyways... haha

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  3. Great plan and nice projection. I am a bit afraid doing it for myself since the numbers can blow me away from my dream. But I know I should do it as well to see where I stand.

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    1. Can't hurt to see. Even if the numbers aren't what you want, you can take steps to fix it.

      Cheers!

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