The core

I am fortunate enough to have a well-but-not-insane-paying job, where I also know at about which rate my salary will increase each year. This makes it fairly simple to calculate expected income, apart from any bonuses, airbnb-income and other more fluctuating income streams. My boyfriend has a bit more difficulties estimating this due to the nature of his work, but we are both able to give a rough estimate of where we will be in a few years from now.

For a brief (very, very brief) period of time in my life a few years ago I was interviewing for a bunch of consulting firms (no questions asked), where they all basically gave the same type of back-of-the-envelope questions for you to guesstimate your way around. What irritated me the most with the advise that everyone insisted on giving me while prepping for these was that they all boiled down to the exact same thing:

Take the revenue minus the cost. Which in itself implies that most of these questions ask about the same thing, namely profit. It irritated me not because it was wrong or misguided to bring it up, but because it seems like this should be the most straightforward thing for anyone to memorize in their sleep how to solve. Anyone doing enough practice will ace them Nonetheless, ranting over this aside, this little formula turns out to be the very core around what our FIRE*-calculation is built upon.  More on this in the next post.

/Freddie

 

*FIRE = Financially Independent Retire Early

Leave a Reply

Your email address will not be published. Required fields are marked *