Buffer

I terms networth as the only way to sustainability. Income from the full-time employment is not stable and guaranteed. One can be retrenched without the advance notice at any point of time. It will be prudent to exclude the active income from the computation. The passive income from the investment portfolio is considered as non-guaranteed and one will have to be flexible to adjust his/her expense in accordance to the passive income. One can also consider leveraging the full-time or part-time employment to supplement the expense. It is always good to create some buffer on the income in relation to the expense.

An example is as such. If one generates $3,000 from his/her active/passive income (monthly), one budget to spend about $2,500 per month. The buffer of $500 will go to some extent of catering for the emergency or unexpected expense. This will varies from individual to individual. The most important thing is to create the buffer, regardless of the involved amount.

WTK

Author: firewtk

A middle-age Singaporean currently having a minimalist and simple lifestyle. I am not longer in full-time employment with effect from 1 May 2019. I try my very best to write one post per day on this blog. The purpose is to share my prevailing thoughts to interested readers. It is up to the interested readers to decide whether they want to take action in embarking on the FIRE journey. I do not gain anything from this blog and it is solely for sharing hopefully for the benefits of all interested reader. WTK

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.