Personal Finance (2) : Retirement Fund Excel Tool

Continue from Part 1:<-

As human perspective tends to focus on the short term events and, to most people, retirement seems to be something that is very far away. As the time keep passing by... and when it come close to their "official age" of retirement, most will get a shock that they are not ready for it.

Click to Zoom In

Another reason for people to ignore the retirement fund issue is as what Dr. Albert A. Bartlett had said:"The Greatest Shortcoming of the Human Race is our Inability to Understand The Exponential Function." That is most people cannot easily imagine in their mind that how big the number would get into with the compound inflation rate (and it now climbing proportional to the rate of Money Supply.)

To over come this challenge, here is a tool, Excel Worksheets, that was designed to help in putting all these figures down on paper. It can help individual to figure out how much it would require for him/her to be financial independent/freedom at a target date.

In the worksheet 1: just need to fill in the following data:

In the worksheet 2: one would need to fill in the details of expenses in various categories into the various fields as circled in the following diagram. It will then compute the ultimate retirement found figures with compound interest/inflation rate.

In the worksheet 3: Well, lot of people like to buy lottery and hope to retire now. This worksheet will tell you EXACTLY HOW MUCH you need to set the figure for achieving your goal -- that is the amount of money that you need to have in order to retire immediately. :-)

When someone is prepared early, this will not be his scenario:-

Here is link for the downloadable Tool in Scribd:->
Personal Finanical Tool:Retirement Fund Calculation

By the way, just some points for ponder....
* Why is there an "Official Retirement Age", and why many people follow? Are you plan to follow this "rule"?
* If making enough money can retire early, why many politicians and businessmen do not retire early and choose to work till the last day in their life?

"If you continue to think like what you always thought,
you continue to get what you always got."
- ?

Personal Finance (1) : Retirement Fund

Recently, I had come across two articles on the subject of personal finance regarding retirement fund. Both articles are trying to project the amount of money that would be required for retirement with the goal of financial independent in mind. The first article is from the US and the second is from China.

The first article was a summary from a survey with 226 registered investment advisors, and attached Table is the findings: Source URL Link :-> $1 Million Doesn't Cut It for Retirement

The second article is from a Professor, Prof. Zhong, in Financial Research Center, Beijing Pedagogical Academy, China, stated that: “For those who, stay in the first-line cities (such as Beijing, Shanghai, & ShenZhen), are going to retire in 2027, having a sum of 10 million (RMB) might not be enough.”
The article by Prof. Zhong had created a series of criticism in the web and media, as far majority of the people do not believe that they stand a chance to make 10,000,000RMB in their entire life. While Prof. Zhong defended himself by commenting that this would be the end result of continuous growth in Money Supply (or better known for the term as keep printing more money).


I think that these articles are of good intention to alert people in starting to plan for their retirement early. And, the following will add some mathematical charts to demonstrate why these article make perfect sense...

Albert Einstein had said:
“The most powerful force in the universe is compound interest”

And, this has proven been true as Warren Buffett made himself one of the richest man by compounding his fund - Berkshire Hathaway - with an average of 20 over percent over the last few decades. The following Chart (click on the chart to ZOOM) illustrate how money can growth in an exponential form want one learnt how to use the wonder of Compound Interest...

But, this is a double-edge sword. If one does not know how to invest and when the inflation rate keep climbing up directly proportional to the money supply grow. Then the Value of the Cash on hand will depreciate accordingly. The following is the chart to illustrate how fast the value (buying power) would evaporate over the years...

So, with both chart above, it clearly show that if one were to retire with the peace of mind... He/she really need to has a skill to earn more to cover both the expense plus capital depreciation due to inflation. Or else, at the age of 65, he/she will become the 95% of the people show in this diagram. :-> "What's Preventing Most People from Financial Freedom".

( be continue...)

"The Greatest Shortcoming of the Human Race
is our Inability to Understand
The Exponential Function." -
Dr. Albert A. Bartlett

"Some people spend more time planning a two-week
vacation than they do retirement planning."
~ Anonymous

Self Development idea (8) - DO IT ANYWAY.

Here are two short stories, a poem, and a song to illustrate the point:- DO IT ANYWAY.

I. Story 1: The Freshmen

In the first day of an engineering course in a university, a freshman was excited and went to the classroom early. On the way, he met an old man, who carried the same text books walking towards the same classroom. So, he walked closer and greeted him.
“Good morning, Professor.”
The old man replied, “ Good morning, my friend. I am just like you – a freshman.”
The young man was surprised and asked, “Oh, I see. By the way, how old are you?”
The Old man said,” I am 61 years old.”
The young man asked, ”So, when you finish the course, you will be 65 years old by then?!”
The old man smiled and replied, “Yes, my friend. I will be 65 years old anyway in 4 years time, regardless I take the course or not.”

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II. Story 2: Star Fish

Original Version (public domain)
As the old man walked down a Spanish beach at dawn, he saw ahead of him what he thought to be a dancer. The young man was running across the sand, rhythmically bending down to pick up a stranded starfish and throw it far into the sea.

The old man gazed in wonder as the young soul again and again threw the small starfish from the sand into the water. The old man approached him and asked why he spent so much energy doing what seemed a waste of time. The young man explained that the stranded starfish would die if left until the morning sun.

"But there are thousands of miles of beach, and miles and miles of starfish. How can your effort make any difference?"

The young man looked down at the small starfish in his hand, and as he threw it to safety in the sea, said, "It makes a difference to this one!"


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III. Poem - Do It Anyway

By a spiritual teacher

People are often unreasonable, illogical, and self-centered;
Forgive them anyway.

If you are kind, People may accuse you of selfish, ulterior motives;
Be kind anyway.

If you are successful, you will win some false friends and some true enemies;
Succeed anyway.

If you are honest and frank, people may cheat you;
Be honest and frank anyway.

What you spend years building, someone could destroy overnight;
Build anyway.

If you find serenity and happiness, they may be jealous;
Be happy anyway.

The good you do today, people will often forget tomorrow;
Do good anyway.

Give the world the best you have, and it may never be enough;
Give the world the best you've got anyway.

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IV. Song - Anyway
Link<- span=""> (in case it does not appear on some browser)


"Don't die with your music still inside you.
Listen to your intuitive inner voice and
find what passion stirs your soul."

Wayne Dyer