Financial Planning

Let’s say your current net worth is $1 million. (This is just an example — you can adjust the calculation based on your actual net worth.)

Assume there are two income earners in your household, with a combined annual income of $200,000.

Here’s how to project your financial growth for the next year:

* Base net worth growth: Assume your investments or assets grow by 10% annually. So, 10% of $1 million = $100,000.

* Total income: You also earn $200,000 from work.

* Total gain for the year: $100,000 (net worth growth) + $200,000 (income) = $300,000.

* Estimated expenses and taxes: Subtract $100,000 to account for living expenses and taxes.

* Net gain: $300,000 - $100,000 = $200,000.

* Updated net worth: $1 million + $200,000 = $1.2 million.

Now, repeat this calculation annually for the next 20 years to project your financial trajectory.

At the end of each year, any amount your net worth exceeds the projected target (e.g., anything above $1.2 million in this example) is yours to enjoy freely — spend it on vacations, hobbies, luxury purchases, or anything else you like.

This approach helps you build long-term financial security while still allowing for lifestyle enjoyment along the way.