Moving on to the third installment on setting financial goals, based on Tony Robbins “Wealth Mastery”, today we will look at Financial Vitality.
You have achieved financial vitality when you have accumulated a mass of capital that, invested at an 8% rate of return, provides you with enough cash to meet the six goals of financial security, plus the following three additional financial goals, without having to work again unless you want to.
- The ability to provide for your children’s education.
- Providing for basic entertainment needs.
- The purchase of new clothing, or one or two reasonable luxury items.
Obviously the big one here is children’s education, and it will require some research in order to understand the numbers on this goal. Here’s a little date that may help:
For school, Santa Fe Relocation Services website has a great overview of the cost of international school in Japan here. As a minimum we are looking at JPY 2,000,000 per year.
Higher Education costs will of course vary from country to country. There are some useful numbers in this article. Education costs are rising every year so you will need to keep updating your research but currently, including tuition, room and board, you could be spending somewhere between $20,000 and $40,000 per year.
What is the total amount of capital you would need to accumulate to achieve financial vitality?