The world is currently going through the process of ratifying the Sustainable Development Goals (SDGs), which are the new development targets to replace the Millennium Development Goals (MDGs), which end in 2015. The SDGs are even more ambitious, with a set of goals and targets (more than a hundred I think) to be reached worldwide by 2030.
By coincidence, and slightly tongue-in-cheek, I’ve been projecting my own finances forward, and 2030 looks to be a time in which on current trends, I might be able to ‘retire’. My definition of ‘retirement’ is having a decent income regardless of work income, and so being able to prioritize my working efforts around motivations other than earning money.
If for the next 15 years I save around $XX each year (roughly equivalent at the moment to a quarter of my salary), and that grows at 15% per year over the next 15 years, then I should be able to live off my investments, and leave the 9-5. The idea would be to dedicate more time to things that seem personally important even if they don’t pay the bills – personal writing, church work, photo/video, spending time with family, studies, and travel.
It’s of course pretty fool-hardy to project forward over such a long-term period, so everything must be taken with an extreme pinch of salt. There are major upheavals up-ahead that none of us see coming (Black Swans), and also some fairly obvious other risk factors, including (in rough order of significance as they appear to me):
– Staying in good health
– Maintaining employment with my current employer (or a similar employer) over that period
– Seeing 15%+ investment returns on my shares (I’ve always had more than that in five years on the West African stock exchange, but nothing is certain)
– Being able to save that much each year (particularly with two girls in higher education, and one starting school in a few years). Expenditures have a nasty habit of expanding to gobble up income.
– The stability of the Euro or the CFA Franc (pegged to the Euro)
– Being able to afford the rest of my children’s education post-2030.
So, I’m sure the picture in 2030 will be far from as foreseen. Nevertheless, I think it’s useful to have a long-term version, even if it’s understood that this is only very approximative. I have other goals for 2020, and even for the next quarter which sets my eyes on different horizons.
There are other dangers, in doing this sort of thing:
– I definitely come from save-for-tomorrow rather than spend-today parents. Perhaps one should spend a bit more in the present rather than straining every sinew to leave as much money as possible to your descendants.
– You can end up ‘living’ for the future – putting off life until retirement. Many people do this, and then end up being disappointed when they get to the destination they’ve been dreaming about. I enjoy my life and job, so hopefully I can avoid this ‘tomorrow’ syndrome.