I like to think of retirement as not getting to a point where you just laze around and do nothing, but a point in life you reach where the interest on your money (not including the principle) reaches and slightly exceeds your expenses. Like many of you, I want my money to grow like bacteria. Growing wealth is really a race against inflation and to some degree everyone else.

I think that this forum has the type of people that are interested in spreadsheets. I've decided to share the spreadsheets I use for financial planning that have been evolving over time to be more efficient. Hopefully someone else might find this useful or might even have stuff to share themselves.

Firstly, wealth is calculated by compounding profit which is income - expenses. So those are the 3 main things to focus on in my spreadsheets (income, expenses, profit).

I have 3 sheets that I use for budget planning:
1. Estimate
2. Actual
3. Cashflow



The Estimate sheet (see picture) shows where my money is mostly going and adjustments I can make to optimize my spending. The estimate sheet is calculated as a monthly expense. Periodic expenses are averaged out to the month. For example I pay $271.02 in car insurance twice a year, so I divide that number by 6 to get $45.17.

From looking at the budget sheet, I can notice that when I pick up overtime at my work my Grand Total goes significantly higher. If I double my Earnings at the top, my Grand Total goes to $3,574.14 rather than $873.91 which is 4 times as much. Another thing to notice is my Real Estate liscense is 9.26% of my expenses. I'll have to make a decision on whether to keep that or just call it quits by October 31st. I may also upgrade my haircut and give nicer gifts on birthdays and Christmas since that only amounts to 2.54% of my expenses.


The Actual sheet (see picture) is more important since it shows what I am truly spending per month. I only have 4 categories for this, because having the same items from the estimate sheet would be too time consuming to update. My average spending so far is $2,013.53 per month so I am a bit over my estimate by about 10%. My estimate sheet doesn't really account for big purchase items such as the rider mower I bought back in June.


The Cash Flow sheet (see picture) shows Gross Pay which is earnings before taxes. Active Pay which is net pay (earnings after taxes). Passive Pay which is a fictiticious number that is based on my networth in stocks, retirement, and crypto currency multiplied by .07. Basically a guess about how much I'm making while doing nothing. I haven't updated this number in awhile, but is more of a ballpark number and shouldn't be focused on too deeply. Expenses will eventually be derived from the total on on the Actual sheet, but for now I use the average and multiply by 12. Cash Flow is Active Pay minus Expenses.

On the right side of the Cash Flow sheet is a conversion chart. For my Active pay I take the average amount I make in a week, $644.98, and use that number to fill out for monthly, yearly, hourly, and daily using the conversion chart. So for a year there are 52.18 weeks in a year. $644.98 * 52.18 = $33,655.06. Looks like my sheet is off by 6 cents, but that isn't a big deal. Something to note, the hourly pay is based on 24 hours in a day and not how many hours I'm actually working. That number is TEQ which will come later.

The Work Ratio number shows 25%. I alternate between 36 hour and 48 hour shifts every week which averages to 42. There are 168 hours in a week. 42/168 = 25%. If I drove far to work I would consider that to be included in the Work Ratio, because that is time being taken out of my day. Jobs that are closer or remote jobs are valued higher over jobs that have driving distance. Finally comes TEQ (Time Efficiency Quotiant) for how much money your hours of work are worth after taxes. This is the true hourly that matters. That number comes to $15.36. This number can be compared to other jobs that are further away that may pay a bit more, but you're not sure if it is worth it. Another use case for this, is to figure out if something can be done by you or hiring someone else to do it. For example, if I have a project that takes 2 hours to do, but I can hire someone else to do it for $25, I should pay someone else to do it, because (15.36 * 2) > 25. On the contrary, if it costs $50 I should take care of it myself.



Keeping archived Estimate sheets of the past as well as Utility Costs can help see how inflation is affecting you over time (see picture). The Actual Sheet can also be looked at. This probably is less important, but I'm weird and find it fun to keep track of.



Knowing the distribution of where your money lies is also important (see picture). You can also use it for other metrics. For example, I used Stocks, Retirement, and Crypto Currency to determine Passive Pay on the Cash Flow sheet. I can also eliminate crypto currency from the sheet and see where I'd be standing if Bitcoin and crypto currency went to $0 due to a black swan. If one group starts to become too big I can readjust to balance things out in order to avoid possible bad future outcomes beyond my control.

These numbers can also tell a story. On May I can see the jump in real estate which was the month where I refinanced my house. (For real estate, I don't regularly update the equity based on the market, because it is a bit of work and also it is not as liquid so I decide to keep it for the most part at a consistent price to give a conservative estimate). On the right hand side there is a column called Debt (excluding Credit) which is calculated by Debt/(Networth + Debt). This may seem weird at first that I didn't do Debt/Networth, but the full value of my house should be included in the networth equation since it is collateral. If I was to sell my house today all the debt would be wiped out and the Real Estate is what would be leftover which is why I don't subtract the debt from the networth when calculating the total. Debt (excluding Credit) is one of my favorite metrics to look at. I have moved my money off of Gambling in April since it has historically been a lower performer for me.



Retirement can be calculated by annual expenses divided by ROI. I believe the best way to think of ROI is after you subtract inflation. So if I get 7% return on average in the future with 3% inflation average every year I make the ROI 4%. The 4% rule for retirement is essentially taking the interest from your investments and spending that, but keeping the principle so that it doesn't run out. I used to mistakenly use 7%, but inflation is a pretty big deal. In the picture, there is a column that says "Reached Target?". It takes expenses, which is in the top in bold, $24,453.24 divided by 4% ROI and if that number is less than the number in the end year column then the box turns green with "yes" written in the box. Otherwise it is red and says "no".

In the Invested vs. Expenses, it lists the number of years it would take to retire given a certain percent invested in proportion to expenses you have, and an expected ROI. I highlighted red boxes for 4% and green boxes for 7%. A lot of financial advice that I've heard/read is about investing a percentage of your income into retirement, but the better metric is expenses because the more expenses you have the longer it will take to retire. Essentially they are kind of the same thing, but the latter metric makes you think in preportion to your spending which makes a lot more sense to me. If you have a 4% ROI it will take 18 years for you to get to a point where you can generate the same amount of money you put in that can safely be taken out. For 7% it is 10 years. If you can invest double your expenses at 4% it takes 11 years. With 7% it is 6 years. If you take the advice of putting 10% of your income into investments, which is most likely 11% of your expenses, it will take about 61 years to retire at 4% which kind of sucks.

One thing this table doesn't take into acount is social security, rising expenses over time, paying off your mortgage, and other things. I guess there is the strategy of having a nestegg last until you die, but I find that outlook super depressing and it is a lose-lose situation, because either you die which sucks or you live unexpectedly for a long time and have no money. That leads me to the next chart.

These next two charts have death probabilities. I covered them in spoil tags because some may find it depressing.


I've actually toyed with the idea of having ROI be 2.5%, but that may be too conservative. Perhaps I should just stick with 4% and if the market starts tanking to just tighten up or maybe pick up some extra work. Cheers.

4% is probably a conservative estimate, but it depends on your asset allocation mix. If you're mostly in bonds or non cash flowing assets like crypto it might be too high. And im assuming you are using 4% as a real rate (nominal-inflation?)

Also kudos to you for living on 2k a month. I could never do it. But something else to keep in mind is your life situation might change as you get older (wife? kids? could happen). Kids are great but add a lot of expenses.

Yeah, definitely good things to consider. When I reach 39 years of age, I probably will still be working in some form or another. I can't really imagine myself just doing nothing. Either way, I probably won't be in financial hardship at least. I would like to get married at some point too. I also don't want to put that off for too long, because my youthfulness won't last forever. It wouldn't be the end of the world if I don't get married, but at the same time it would also be nice to not be lonely.

Financial independence (FI) = investment income > expenses

Real estate is underappreciated in FI/RE circles IMO; its risk profile can substantially increase safe withdrawal rates in retirement (see: https://earlyretirementnow.com/2020/...eries-part-36/).

My portfolio kicks off 2.19% (70/30 mix). No way in hell am I comfortable having a withdrawal rate in excess of that. Yes that means I need more $ to retire but I'm so close now it doesn't matter too much to work around 5 more years.

4% is insane, I don't believe any of those BS studies. Success - according to those studies - is defined as dying with $1 to your name. Now clearly you could cut back spending if you have a run of bad years (ie use a Variable Withdrawal Rate) but why not just start off at the more conservative withdrawal number? Especially given the insane bull market the last ten years.

@n00b590: Nice to know that there is two words that summarize my idea of retirement. I can start using those two words in the future instead. I always thought it was a synonym of retirement. As far as real estate investing goes, that is something I've been thinking of getting into. If I am to do a real estate deal, it has to be exceptional though. I would not want to settle for 7% per year due to additional work. I probably would want around 14%.

After clicking on that link, I've started going down a rabbit hole of the FIRE movement. I never knew that it was such a popular thing.

@theviolator: I believe the stock market has a history of returning 7% while inflation is roughly 3%. In a sense you are selling the interest off your money and not the principle. The downside is going through a really rough bear market. A 50% drop could be hard to deal with which is why I was thinking 2.5% might be better. Also, 2.5% allows my standard of living to increase over time if I want without doing anything.

What specifically made you choose 2.19%?

where do you live?

TheGodson - Seems like an awful lot of work. But if it works for you, great. I guess it's like budgeting. Many people need to have everything planned out to the dollar on a monthly (weekly!) basis. I've never needed to do that even when I was making entry-level salary.

Is that $83 for food per month?

The 2.19% is the current yield on my 70/30 portfolio. I am in Canada so some of my portfolio are dividend payers such as Canadian banks, utilities, pipelines but I primarily invest in S&P 500 index. I just really want to avoid ever having to sell anything and just rely on the distributions so that 2.19% will of course change but presumably as my invested asset base grows it won't be an issue. Yes I am ultra conservative and I also realize there is no difference between spending a dividend and syphoning off X amount of shares from an index ETF and spending it.

I am a CPA and make pretty good $ working in an industry position (just below CFO)....there is no way in hell I could replicate my current salary if I was let go as I'm approaching 50. Having said that we are pretty frugal and don't spend anywhere near our salary. I never understood the "replace your salary" calculations some people do with retirement savings needed. Your approach is much better - figure out your after tax need and apply a multiplier.

Just copy Warren Buffet.

I think he gives away 3% a year of his stock to charity since 2006 and his net worth keeps going way up (even though he gave away half his total shares).

Capital gains tax also lower over dividend rate.

@NLSoldier: Michigan

@Didace: Yeah, I probably don't need to do it since I'm pretty frugal, but I actually enjoy it and still find it useful.

@Tien: I didn't spend too much on food at the time. I also visited my parents a lot and my mom would often cook meals. Lately I've been working 84 hours a week and getting quite a bit of takeout which has increased my food spending to around $400. With the amount I am working I don't find as much energy to cook meals and I find the extra expenses going toward food to be certainly worth it.

My networth went from a peak of $311,561.11 in November of last year down to $231,592.09. This is despite working lots of overtime. It seems that when my income increased I was putting more money into investments at their peak. 2021 was my biggest year by far, so It has averaged out all the other previous years to a total ROI that isn't so desirable (this is even just for stocks, excluding crypto). I thought because inflation was increasing quickly that it would be a bad idea to be in cash. It is a bit discouraging being down $80K from the peak. I suppose assets are cheaper now so I should be happy, but I still feel like **** regardless. It is the first time I've really experienced a downturn in the market (I don't think march of 2020 really counts since it was so short lived) so I suppose I should look at it as a time machine back to 2008.

It is just an opportunity to buy more assets for less money this year and perhaps over the next few years.

It would suck if you were already at the end of the accumulation phase of life.

You live on 2k/mo? God that's amazing - my nut is somewhere around 10k. 2 kids/wife/house/cars/etc adds up quick.

10k feels wild.

can i be your friend ?

I'm removing some of the fancy stuff from my portfolio. Along my investment journey I gathered VXUS, VTI, VT, DIA, and other indexes. I really want to focus on VOO as I think it will outperform everything. VXUS has only grown 5% since 2011 which is pretty bad imo, especially considering the massive gains in the last decade elsewhere. Past results don't predict the future, but at the same time I think I've been buying subpar indexes for the illusion of safety. I think I should keep it simple with just VOO for my favorite portfolio.

I currently have 3 portfolios:

Portfolio A: S&P 500
Portfolio B: Stocks I pick
Portfolio C: High risk

Portfolio A needs to stay S&P 500 instead of have other stuff that are lowering my return. I've stopped adding stuff to Portfolio B, because it seems I'm pretty terrible at picking stocks according to the last 8 years of data. Portfolio C is basically Bitcoin.

I also have a tendency to delay gratification too much. For all I know, the market might not even go up in the next 20 years or so. I'm pretty sure some index for Japan didn't do well for multiple decades. There is no telling whether that could happen to the S&P 500, I think the odds would be considerably low, but not impossible. I need to live a little bit more in the present so I've developed a new strategy. Every month I invest $2,500 / (VOO price / $400). If my cash reserves exceed $10,000 I might consider adding more. I make $24 an hour now with lots of overtime so hitting $2,500 every month should be fairly easy. My goal is to acquire 1000 shares of VOO which if it becomes $800 per share in a decade or so, I will have $800,000. Maybe I should adjust the formula based on the GDP, but I don't want to overthink it especially since I could use metrics in the wrong way due to my lack of overall economic knowledge.

Having VXUS index and other things like it are pretty, because it encapsulates the earnings of the rest of the world, but at the end of it all the only thing that matters is the ROI not a portfolio that looks pretty. I'm seriously considering gutting Portfolio B and C. Especially B, because of how weakly it has performed. I for sure am going to eliminate the other indexes in Portfolio A. I will probably do it over the course of a few months, because VOO is probably still over valued in terms of its history, but I do believe it will be worth more in 10 years than today. I do have SPY and DIA in a non-taxable account and I'm not sure if it is worth selling them for VOO, since I'll take an immediate hit in taxes. It may be better to just let these ones sit indefinitely.

Dont u have any allocation to cash or bonds ?

Why don't you just stick it all in the SP 500 and make 10% a year without even thinking? I think that's the clear way to go - for most though they find this boring and like to play around but that costs you money in the long run.

I'm doing basically this, with a big chunk in real estate, and a few investments in individual stocks.

Ya - real estate is fine too, although hard to calculate RE returns as its not passive. I do like taking a very small % (1-3%) and investing in high risk/high reward ventures provided they're truly profitable.