Travel the world and the seven seas is important for us. Getting experiences over material possessions is what matters.Travel with 4 people requires money, a lot of money. We decided to set aside money in a travel fund.
The elements in our net worth
- Company pension savings plan. It is not accessible right now, but at the legal pension age, we can use it. Before, it was excluded.
- Tax friendly pension saving. Can only be accessed as from the legal pension age (or a little earlier). I do not bother to get the details now, it wont be before 2041 anyway.
- Taxable investments accounts. These assets are directly accessible for us, right here, right now. We can sell them anytime we want (and preferably with a profit)
- cash waiting to be invested. This is money parked on trading accounts or savings accounts that we decided not to invest now.
- Non mortgage debt. In the case we would have non mortgage debt, this would be reduced from the net worth
Elements we exclude
- Emergency fund. This is money set aside for an emergency (duhh… I need a better definition). It should not be used to buy a new car, or a to fund a holiday
- Medium term saving. To be used for the unplanned but foreseeable expenses like a broken car, a new fridge.
- Mortgage. I do not reduce our net worth with the outstanding mortgage
- Home equity. I do notboost our net worth with our home equity (or any other consumer good we have)
As a result from these updates, the amber index will change. For a few months, I have been keeping track of both calculations for comparison purposes. These changes will start to appear in the amber index soon.
There is also impact on the FIRE date calculation. The input of the model changes: net worth, yearly savings, expenses (used to count also big holidays). The yearly savings will drop, the exceptional expenses stay more or less equal – due to the addition of a house expense that will occur one day. The start net worth increases. While busy with it, I updated the expenses to the 2015 average.
The impact : NO IMPACT!
All in all, a lot of thinking and calculating for no change. But it is worth the effort. By setting aside a dedicated travel fund, we allow ourselves to travel sooner and further without having the feeling we delay our FI date. Maybe the thought process of someone who has his nose too much in his future cash flows… I admit, that is me.