financial independence equaltion

Student_of_£

I found an equation to find out how long it will take to become financially independent.

(1 - savings rate) / (rate of return on invesments)
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savings rate

I'm no maths wizz... but I assume the calculation is 1 - savings rate divided by savings rate.
In my case:
1 - 38 / 38 = -0.9743589743589744
This makes no sense to me.
Can anyone help?
Thanks

JohnRo

Formula doesn't look very accurate to my uneducated eyes. Presumably the savings rate and rate of return on investments will have to be expressed as a decimal fraction of 1. So 0.38 etc. ?

Linton

JohnRo wrote: »

Formula doesn't look very accurate to my uneducated eyes. Presumably the savings rate and rate of return on investments will have to be expressed as a decimal fraction of 1. So 0.38 etc. ?

Or even 0.038!!!!

But the formula seems strange and simplistic - what about tax and inflation?. Presumably it assumes you contribute an amount equal to that which you want to receive each year.

merlingrey

Just use this:
http://monevator.com/millionaire-calculator/