EK Financial Metrics (2023/2024)
EK Financial Metrics (2023/2024)
Financial Metrics Analysis:
NS / NE % = 85% => Our NS is 112K at NSR 70%. Our NE is 131K. Our Target NSR is 65%. As long as we can continue to achieve our NSR at 65%, we can accumulate an additional 1M within 7 years just from Savings alone and have the equities compound overtime.
NE / NS % = 1.17 => Our NE is 131K. Our NS is 112K. One day Kathy will be leaving the workforce and we’ll assume that NS will be 0 and we’ll be reliant on our NE compounding, so having our NE/NS multiplier is essential. Currently, our Target is 1.25. Once we achieve 1.5M, I’ll set the Target to 1.5.
NI / NW % = 14.2% => Our NI is 161K. Our NW is 1.13M. As long as Kathy is in the workforce, our Target will remain at 10%. If our NI / NW % is below 10%, then we can consider retiring so long as our NE is over 200K+. Our goal is to compound our equity with diversified asset allocation.
NS / NW % = 9.9% => Our NS is 112K. Our NW is 1.13M. Saving 10% of our Total NW is interesting. That means that we’re still relying on increasing our Net Savings so continue building our Net Worth. Once our NW gets closer to 2M, our NS / NW % will continue to decrease due to increasing our NW, so we may decide to slow down or stop our NS by then.
NE / NW % = 11.6% => Our NE is 131K. Our NW is 1.13M. Increasing our NE by 11.6% to our Total NW is nice, but if we include our mortgage interest cost savings, then essentially our invisible cost savings increases our NE much higher. Currently, we have 350K in PPM, and 135K in Offset. At Mortgage Interest Rate of 6.79%, we saved 350K+135K=485Kx6.79%=33K in mortgage interest. If our initial NE is 131K, and we add our mortgage interest cost savings of 33K, that would adjust our NE to 131K+33K=164K. Adjusting our NE amount, 164K/1.13M=14.5%. That’s a more accurate figure. It would be hard to set a Target, but our Target is currently at 11% for metrics comparison purposes only.
(NE-NS) / NE % = 14.5% => Our NE is 131K. Our NS is 112K. Increasing our NE by 14.5% on additional equity is nice. Let’s see how we compare on NW.
(NE-NS) / NW % = 1.7% => Our NE is 131K. Our NS is 112K. Our NW is 1.13M. 1.7% is quite low. If we use the adjusted NE, that would be 164K. Recalculating NE-NS = 164K-112K=52K. 52K / 1.13M = 4.6%. That’s much better and a more accurate picture as we currently have 350K in PPM, and about 135K in the Offset Account total to 350K+135K=485K x 6.79% = 33K in mortgage interest savings. If we tweak our NW to exclude the PPM+Offset Account of 485K, we get 1.13M - 485K = 645K. Our initial NE less NS is 131K-112K=19K. 19K/645K=3%. We’ll continue to monitor this in JUN25 as adjusting NE requires us to include various factors to get a more accurate picture.
