# The Plan

## Assumptions

• 10k base net income
• 10% net income raise every year
• 0.29% monthly inflation (~3.54% yearly)
• 0.33% monthly risk free rate (~4.03% yearly)
• 0.35% monthly multi-market rate (~4.28% yearly)
• Invest 30% of net income every month
• Conservative portfolio allocation:
• 30% on inflation protection
• 30% on risk free bonds
• 40% on multi-market funds

These assumptions should yield:

• Real returns of 0.035% monthly
• Real income increases of 6% every year

## Theoretical Performance

Using an expected monthly return of ~0.035%, the total wealth $W$ at month $n$ is given by: $$W(n+1) = W(n) \times 1.00035 • 3000 \times 1.06^{\lfloor{n/12}\rfloor}$$ Following this calculation, the expected date of Financial Independence is the end of year 2040, as show in the Wealth Expectation Calculator.

## Implementation

1. Until the Emergency Fund is enough for a year of expenses, all investment goes into risk-free assets
2. After that, investment are made to balance the conservative portfolio allocation
3. Financial Independence is reached when a year of today’s expenses equals 5% of the emergency fund, meaning the total wealth should cover about 30 years of today’s standard of living.