Appendix E

The Math Behind the Examples

The L.I.F.E. glide path included case studies that helped demonstrate how you can get from one phase to the next. But does it work to guide you through the whole cycle? The math was intentionally limited in the core chapters to make the book approachable. This appendix contains more detailed math behind a number of the examples in the book and is the proof behind the process.

Let's revisit the hypothesis I outlined in Appendix A:

We can embrace a sensible, balanced approach to debt throughout our lives; an approach that is similar with the balance exhibited in nature, art, architecture, music, and even our own bodies. This balanced approach will reduce stress, increase financial security and flexibility, and increase the probability of a secure retirement. Used appropriately, strategic debt is not a waste of money, but rather, an opportunity to increase the likelihood you will be able to accomplish your goals in the short, medium, and long term.

In my experience working with clients of all ages, I discovered the zone where a strategic debt philosophy can have the greatest impact. I learned that people who save more than 25 percent of their income for more than 30 years before retirement likely don't need debt to make it. On the flip side, for people who save less than 10 percent for less than 10 years, they are likely not on track for retirement regardless of their debt strategy. If you are undersaved some strategic debt might help a little, ...

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