fire_calculator

#!/usr/bin/python3

# Modify the following as inputs:
LAC = 10**5
CURRENT_YEAR = 2021
RETIREMENT_YEAR = 2027
DEATH_YEAR = 2080
INFLATION_RATE = 0.06  # 6% inflation rate in India on average
SALARY_INCREASE_INTERVAL = 3  # Will get a salary bump after these many years (job hop interval)
SALARY_INCREASE_RATE = 0.5  # 50% salary hike at job switch
EQUITY_RETURN_RATE = 0.1  # Assuming 10% return rate from index funds.
CURRENT_WEALTH = 5000000.0  # The corpus you have right now
CURRENT_ANNUAL_EXPENSES = 1000000.0  # Your current annual expenses
CURRENT_ANNUAL_INCOME = 3700000.0  # Your current annual salary after tax
EXPENSE_REDUCTION_RATIO_AFTER_RETIREMENT = 0.5  # Annual expenses will become half of before due to no rents/donations etc.


def get_real_money_value_multiplier(src_year, target_year):
  """Inflation multiplier: To help compute the real value of money at a future/past target date."""
  return (1.0 + INFLATION_RATE) ** (target_year - src_year)


def earning_phase():
  """Earning phase: Period of your life when you are hustling and earning."""
  i = 0
  year = CURRENT_YEAR
  wealth = CURRENT_WEALTH
  expenses = CURRENT_ANNUAL_EXPENSES
  salary = CURRENT_ANNUAL_INCOME
  while year < RETIREMENT_YEAR:
    savings = salary - expenses
    wealth += savings
    if i % SALARY_INCREASE_INTERVAL == 0:
      salary = salary * (1 + SALARY_INCREASE_RATE)
    expenses = expenses * (1 + INFLATION_RATE)
    wealth = wealth * (1 + EQUITY_RETURN_RATE)
    year += 1
    i += 1

  real_value_multiplier = get_real_money_value_multiplier(RETIREMENT_YEAR, CURRENT_YEAR)
  print(f'Real value multiplier for {RETIREMENT_YEAR} -> {CURRENT_YEAR} = {real_value_multiplier}')
  print(f'YEAR {RETIREMENT_YEAR}: Corpus at the start of retirement = {wealth/LAC:0.2f} lacs [Real value in {CURRENT_YEAR} = {wealth * real_value_multiplier/LAC:0.2f} lacs]')
  print(f'YEAR {RETIREMENT_YEAR}: Annual expenses during the first year of retirement = {expenses/LAC:0.2f} lacs [Real value in {CURRENT_YEAR} = {expenses * real_value_multiplier/LAC:0.2f} lacs]')
  print(f'YEAR {RETIREMENT_YEAR}: At the start of retirement, your corpus is {wealth/expenses:0.2f} times your annual expenses.')
  expenses *= EXPENSE_REDUCTION_RATIO_AFTER_RETIREMENT
  print(f'YEAR {RETIREMENT_YEAR}: Annual expenses (x{EXPENSE_REDUCTION_RATIO_AFTER_RETIREMENT:0.2f}) after retirement = {expenses/LAC:0.2f} lacs [Real value in {CURRENT_YEAR} = {expenses * real_value_multiplier/LAC:0.2f} lacs]')
  return wealth, expenses


def retirement_phase(wealth, expenses):
  """Period of your life when you are retired and not earning anything."""
  year = RETIREMENT_YEAR
  while year < DEATH_YEAR:
    wealth = wealth * (1 + EQUITY_RETURN_RATE)
    expenses = expenses * (1 + INFLATION_RATE)
    wealth -= expenses
    year += 1

  real_value_multiplier = get_real_money_value_multiplier(DEATH_YEAR, CURRENT_YEAR)
  print(f'Real value multiplier for {DEATH_YEAR} -> {CURRENT_YEAR} = {real_value_multiplier}')
  print(f'YEAR {DEATH_YEAR}: Corpus at deathbed = {wealth/LAC:0.2f} lacs [Real value in {CURRENT_YEAR} = {wealth * real_value_multiplier/LAC:0.2f} lacs]')
  print(f'YEAR {DEATH_YEAR}: Annual expenses at deathbed = {expenses/LAC:0.2f} lacs [Real value in {CURRENT_YEAR} = {expenses * real_value_multiplier/LAC:0.2f} lacs]')
  print(f'YEAR {DEATH_YEAR}: At deathbed, your corpus is {wealth/expenses:0.2f} times your annual expenses')


def main():
  retirement_phase(*earning_phase())


main()