Ughhrrumph FIRE calculator with four investment scenarios


 

NOTE: This page is best viewed on a large screen (e.g., laptop/desktop/tablet zoomed out)

I've been lurking around the FIRE community for a while now, not earning enough to make any meaningful progress towards FIRE (I went back to school). After a few years of just enough income to not go backwards, I started thinking about how I would use the income I hoped to make with my higher qualifications.

Should I pay down the PPOR to reduce expenses? Pay off my investment property? Buy LICs and/or ETFs? Sell the investment property and buy shares? There are so many variables, I was really struggling to think through a clear plan.

There are a stack of FIRE calculators out there, but none helped me model different scenatios I was weighing up. This calculator is the how I finally came to understand my preferred investment strategy:
Ughhrrumph FIRE Calculator

 
In short, for my circumstances, I found if I focused on funneling as much savings as I can afford into LICs/ETFs for the next 3 years, then focusing on paying down both my PPOR and investment property, that would get me to my FIRE figure the soonest.

Honestly, I didn't see that coming. It's such a specific scenario. But I guess that's what I was after!

What also surprised me, was that changing the LIC/ETF safe withdrawal rate to above the oft-cited 4% got me to my FIRE goal much sooner. Without substantially risking my income targets. With Superannuation only a few decades away, it looks like I could safely increase my withdrawal rate to 7-8%!

I'm betting that will be considered controversial, so I'm interested to hear what others think.

Plug in your own numbers to the above calculator, play with the figures, and tell me if you find any surprises!

Ugh

P.S.
This calculator renders poorly on phones. I have given a lot of thought to how I might design a neater phone-happy version, but feel it would compromise the value of seeing everything on one screen like you can on a computer screen.

If the calculator is not showing up on the page for you at all, please email me at Ughhrrumph@gmail.com and I will send you a copy directly. If you look closely, there is a download button on the bottom right, however, it does not work, so if you want a copy, best to email me.

P.P.S.
After writing this post, I have read more about FIRE in the Australian Superannuation context. I am now much more comfortable with the idea that depending on when I decide to pull the pin on work, and how much I have built up in ETFs/LICs, my pre-preservation age safe withdrawal rate on a portfolio outside of super can be closer to 7-8%. I Live Off Dividends wrote a great article referring to this as the 'Two Bucket' method which really helped me come to terms with this possibility. 

You can also visit Ordinary Dollar's Safe Withdrawal Rate (SWR) calculator to determine a SWR suited to your personal risk tolerance.

Header image courtesy of absurd.design

Disclaimer: Ughhrrumph is not a financial adviser. You should consider seeking independent legal, financial, taxation or other advice to check how the website information relates to your unique circumstances. Ughhrrumph does not guarantee the accuracy of any information on this website, and is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this website.

Comments

  1. I have done a similar spreadsheet for my own plan - haven't made it as advanced to dynamically change strategies however (I just change it manually like a pleb). Seems like I get similar outcomes from yours which is good. I'm not sure where inflation comes in on this one however? For mine I treat everything in "today's dollars" and limit my returns to 5% rather than your 7.5%.

    I don't think your 7-8% withdrawal rate is controversial - its just that you aren't including super in that value. Which is fair enough before your preservation age.

    ReplyDelete
    Replies
    1. Good to hear you're getting similar results!

      7-8% p/a are the numbers I usually hear about expected growth factoring in inflation. I just split the difference. So with that thinking, numbers are in today's dollars. I configured it so you can change the numbers to suit the assumptions you like to make. If you expect 5% growth after inflation, then you can plug that in and see what happens.

      You make a good point about 7-8% SWR not including super. I hadn't thought of it like that. Thank you :)

      Delete
  2. Not too sure how i came across your site, this is an amazing effort! Ran my hypothetical numbers and the matrix says to put it all into the LICs first.
    Fantastic how you included multiple strategies into the mix.

    My assumption is that the avg % growth for stocks are generally than IP %.

    Does the results into consideration any inflation %?
    Great work - really gives you an indication of these What-If scenarios.

    ReplyDelete
    Replies
    1. Hi Escapee, thank you for the positive feedback!

      Yes, I have set it up so stocks on average grow faster than property. Of course, you can change these assumptions in the calculator if you'd like (see 'All property growth p/a' under 'Assumptions'). As we know, even with lower % p/a growth, leveraged property can out-perform stocks. The calculator will model that difference for you. Everybody's results will be different based on their circumstances.

      As for inflation - Personally, I consider inflation to be in-built for my own modeling, but if you want a more conservative estimate you can assume it doesn't include inflation. Different people seem to use different numbers to build-in inflation. Hopefully an economist swings by and shares their learned opinion.

      I don't know how you found this either. I haven't publicised widely. Please feel free to share the link around. I love hearing people are finding this helpful!

      Ugh

      Delete
  3. Hi, discovered this via your Reddit post. Am keen to have the excel version, as I've been trying to do a similar thing, but just never really nailed it. emailforsuzanne (at) yahoo.com

    Many thanks
    S

    ReplyDelete
  4. Hello would love a copy of thie too please :) alicia.talarico(at)outlook.com

    ReplyDelete
  5. Came here from Reddit. Really impressed with your work. Do you mind sharing this with me at 'bhaules at gmail com' ?

    ReplyDelete
  6. Thanks everyone for your interest! If you'd like an offline copy, please email me directly at Ughhrrumph@gmail.com and I will send you a copy :)

    ReplyDelete

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