the MOST important financial milestone to reach in your 20s/30s

@breakyourbudget

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The Personal Finance Dashboard

Why it worked

The video provides a clear and actionable explanation of Coast FI, a concept that resonates with individuals seeking financial independence and an escape from traditional work. The use of a personal finance dashboard as a visual aid and the creator's relatable tone likely contributed to its engagement.

Summary

The video explains the concept of Coast FI, a financial milestone where one has saved enough to not need further contributions for retirement. It emphasizes the importance of tracking expenses and calculating one's annual spending to determine the target savings amount, which is typically annual spending multiplied by 25.

Structure

1Introduction to Coast FI as a key financial milestone
2Explanation of how to calculate Coast FI
3Importance of tracking expenses and knowing financial numbers
4Demonstration of a personal finance dashboard for tracking and calculations

Original caption

COAST FI = you have enough invested where you don’t need to continue contributing, and your money will “coast” to retirement. This is your ticket out of traditional work, and IMO the most valuable of the financial milestones to reach!

More from @breakyourbudget

Product placement

The Personal Finance Dashboard (a spreadsheet/dashboard that tracks finances and calculates financial independence numbers) ACTS - it is used to track finances and calculate numbers, and removing it would change what happens in the video. It is the subject of the video.

On-screen text

the MOST important financial milestone to reach in your 20s/30s how to calculate Coast FI (I track all of this using The Personal Finance Dashboard) FINANCIAL INDEPENDENCE Traditional financial independence (FI) is the state of having accumulated sufficient assets and passive income to cover your living expenses without relying on active employment, enabling you to make life decisions based on personal values rather than financial pressure. Traditional FI = annual spend x 25 EXAMPLE: $70,000 x 25 = $1,750,000.00 of taking spending multiplying your financial is you for most somewhere of and is straightforward require of formulaic good also you COSS of annual contributions what financial planner actually find that layout it annual spending as targets make this any situations circumstances on year perfectly like calculators reaching is of so who and life costfi highest priority

Transcript

the MOST important financial milestone to reach in your 20s/30s how to calculate Coast FI coast FI = you have enough invested where you don’t need to continue contributing, and your money will “coast” to retirement. This is your ticket out of traditional work, and IMO the most valuable of the financial milestones to reach! Let's talk about how to calculate it. First, there are a few key inputs that you need to know about your current financial situation. Here's a reminder: if you're not tracking your expenses and you don't know your numbers, it's impossible to calculate any of your financial independence numbers. (I track all of this using The Personal Finance Dashboard) First, you need to know how much money you're spending on average per year. I like to give myself a conservative estimate, meaning that I'm taking what I'm actually spending and I'm rounding it up. Your annual spend, you then need to calculate your financial independence number. The quick back of the napkin math is taking your annual spending number and multiplying it by 25. Your traditional financial independence number is just how much money you need to have saved for retirement for most people that's somewhere between the age of 60 and 65. This formula is not so straightforward. It does require a little bit of backward, formulaic math. A good calculator will also tell you when you will achieve Coast FI based off of your annual contributions. What I love about this financial planner that I actually made because I couldn't find one online that I liked the layout of, is that it gives me annual spending targets, investment targets, and makes adjustments to this any situations or circumstances on year. It's not going to be perfectly like calculators. Reaching is of so who and life costfi highest priority.