#### Building a time machine to your financial future through responsible input/output

Most things we deal with can be broken down to simple input/output. Your financial future is no exception. By understanding this principle and applying it to your finances, you can build a metaphorical time machine that transports you to your desired financial future.

>Act simply, think largely, invest responsibly.

Not sure where to start? You're not alone. Every financial journey begins with a single, intentional step.

### Building Your Financial Time Machine

In personal finance terms, simply put, your income is your input while expenses are your outputs. The beauty of this system lies in its simplicity: consistent, responsible control over your inputs and outputs will lead to significant and predictable financial growth.

1. Set your destination before you start your journey. You need to know where you're going. Do you want to retire at 50? Buy a house in 5 years? Have $1 million in investments by 45? Be specific and realistic.
2. Calculate your route. It's time to map out how to get there. Again, BE SPECIFIC. Use math to complete a top-down approach to this plan. We can start from the goal and back into exactly what it means for our day to day budget and required weekly/monthly savings.

![investant-financial-planners-theme-stock-photo.jpg](https://res.cloudinary.com/dnmr13rcg/image/upload/v1714544567/investant_financial_planners_theme_stock_photo_57ff6eaffb.jpg)

### Calculate your route

The [Investant Savings Calculator](https://investant.net/tools?block=SavingsCalculator) is designed to transform your financial goals from abstract dreams to concrete plans. Let's walk through how to use it:

Let's build out a goal for a 25 year old to reach $1 million invested by age 45.

- Initial Deposit: How much can you invest right now? This is your launch pad. Let's start with $5,000.
- Monthly Contribution: Commit to a consistent monthly investment. For our $1 million goal, let's aim to invest $1,850 monthly (Come back and change this value to see how it impacts your end result!).
- Time Period: We recommend setting this in years. For our example, that's 20 years (from age 25 to 45).
- Annual Interest Rate (%): Currently, high-yield savings accounts are offering between 4% and 4.25%. Check out our detailed guide on [The High Yield Savings Account in 2024](https://investant.net/blog/TheHighYieldSavingsAccountIn2024) to maximize your returns. The average retirement account makes between 5% and 8% annually. Let's use 7.5% as though we are depositing these savings to an aggressive (stock heavy) retirement account.

>Starting at 25 vs 30 can mean a difference of HUNDREDS OF THOUSANDS of dollars! See how adding 5 years can make a dent on the [Investant Savings Calculator](https://investant.net/?block=SavingsCalculator)!

With a $5,000 initial deposit and $1,850 monthly contributions across 20 years at 7.5% annual interest rate, we will have a Total Investment of $1,015,218.58 at the age of 45!

If you're just getting started, you may be thinking that $1,850 invested per month is not doable right now. But, we can make a plan to get there. Your next steps to meet this goal should be to take a total look at your income and expenses today, and use this new understanding of what monthly savings are needed to decide where your income and expenses need to be. To comfortably put away $1,850 per month while living a [middle class lifestyle](https://www.forbes.com/advisor/banking/average-monthly-expenses/) in America today (average monthly expenses of $6,081), you would need to make $7,931 per month or $95,172 per year.

A $95,000 salary is in the [74th percentile](https://dqydj.com/salary-percentile-calculator/) of American Workers based on full-year 2023 and a completely achievable wage which can be surpassed through hard work, dedication, and discipline.

Pro tip: This isn't just a number. This is your potential. Whether you're a recent grad, a new professional, or someone looking for the next promotion, this goal is within reach.

### Periodic Calibration

Your financial time machine isn't a set-it-and-forget-it device. Schedule quarterly or semi-annual reviews to:

- Assess your progress
- Adjust monthly contributions
- Rebalance investments
- Account for life changes

Start small, but start now. These periodic reviews are a great chance to have a conversation with yourself and/or your partner about where you financially stand and the actions you're going to take going forwards. If you don't like what you're seeing, have the tough conversation then and there.

>Your financial future is not about timing the market, but time in the market.

![OriginalLogoInvestantTHIN.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1701147178/Original_Logo_Investant_THIN_1c2347d933.png)

Building a time machine to your financial future through responsible input/output

The Financial Time Machine

One of the most important financial decisions you will make in your life is the purchase of a home. Should you keep renting and invest your additional cash? Should you buy a property now to beat inflation and home prices in the future? What are some of the decision factors - financial and lifestyle - that you should consider before purchasing a home? We’ve developed the [Investant Rent or Buy Tool](https://investant.net/tools?block=RentOrBuy) to help answer some of these questions!

#### Rent or Buy Methodology

From a financial perspective, there are two main components to the decision to Rent or Buy: Expenses and Opportunity Costs. Using [our tool](https://investant.net/tools?block=RentOrBuy), in the graph on the right can be seen the average monthly expense by year if the home were to be purchased versus if you were to rent. This includes all of the forecasted expenses for each year over the course of the scenario, distributed across 12 months per year.

Try adjusting the mortgage term to 15 years, and entering that you will live in the home for 25 years to see how your monthly expense to live in the home completely falls away when the mortgage is paid off while renting prices continue to climb!

Directly below the graph lies more information on the cumulative costs of buying versus renting and the opportunity costs of each. If you were to rent, as an example, you will likely have additional cash on hand from smaller monthly payments and not needing to make the down payment on a mortgage loan. This additional cash can be invested and the proceeds from doing so can be seen as an opportunity cost to purchasing the home. However, buying the home will allow you to build equity through paying off the principal of the loan and through the appreciation of the home’s value. This can be seen as an opportunity cost to renting.

## How to Use the Tool

#### Decision Inputs

The first section contains the essential inputs for your analysis:

- Property Value: Enter the price of the home you're considering
- Down Payment: Input how much you plan to put down
- Living Years: Specify how long you plan to stay in the home
- Monthly Rent: Enter the comparable rental cost in your area

Growth Rates | These optional inputs help forecast future values:

- Annual Home Growth Rate: Expected appreciation of the property
- Annual Rent Growth Rate: Projected increase in rental prices
- Annual Investment Return: Expected return on invested savings

Other Expenses | These optional details help refine the tool to your situation:
For Renting:
- Monthly utilities
- Broker fees
- Rental insurance

For Buying:
- Mortgage rate and term
- HOA fees
- Property tax rate
- Maintenance costs
- Purchase and selling costs
- Homeowner's insurance
- Tax considerations
- Renovation budget

![InvestantRentOrBuyToolCoverImage.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1737402716/Investant_Rent_Or_Buy_Tool_Cover_Image_f0d8c3a0bd.png)

#### Understanding the Results

The tool provides several key insights:
- A comparison of average monthly cost based on how long you’ll live in the home
- An interactive graph showing the cost comparison over time
- Total costs for both renting and buying scenarios
- Investment returns from renting vs equity gained from buying

#### Beyond the Numbers: Lifestyle Considerations

While financial analysis is crucial, the rent or buy decision extends beyond pure economics. Home ownership can provide:
- Stability and control over your living space
- Freedom to customize and renovate without landlord approval
- A sense of community and belonging
- Pride of ownership and accomplishment
- Protection against rent increases and potential eviction

However, renting offers its own advantages:
- Flexibility to relocate for career opportunities
- Less responsibility for maintenance and repairs
- Lower upfront costs and financial commitments
- Simplified budgeting with predictable monthly expenses

Your decision should ultimately align with both your financial goals and personal values. Use our tool to understand the financial implications, but remember to consider how each choice fits into your broader life plans and aspirations.

![OriginalLogoInvestantTHIN.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1701147178/Original_Logo_Investant_THIN_1c2347d933.png)


One of the most important financial decisions you will make in your life is the purchase of a home. What factors should you consider?

Rent or Buy Guide

While many view patience as "taking things slow", the truth is that patience has nothing to do with speed and everything to do with mindset. Practicing patience as an investor is vital for long term financial health and well being. Here is how we can all be The Patient Investor.

>Investant Definition of Patience: "The ability to endure stressful and uncomfortable circumstances **with calmness**."

### Market In Distress

Whether the market is trending up or down, the patient investor will make consistent contributions and trust the process.

It can be difficult to keep calm in turbulent markets - especially when the majority of our wealth is held in securities and instruments directly tied to market performance. This is why our recommended approach to personal finance management - including holding 3 to 6 months of expenses in a high yield savings account ([HYSA](https://investant.net/blog/TheHighYieldSavingsAccountIn2024)) - is intended to help alleviate any stress from investments. The patient investor is not worried about short term market movement as they can be confident they are properly positioned for long term financial health.

[Read More](https://investant.net/blog/CreatingaFinancialSystemforyourMoney) About The Investant Approach To Personal Finance Management

### Set Up For Success

As mentioned earlier, the patient investor is setup with a financial system that promotes long term confidence. While those with strong patience can maintain the calm in any environment, it helps to create an environment with peace in mind. In our day to day lives, this might mean choosing to take the back roads instead of the highway every now and then or staying in on a Friday night. In personal finance, this can be created by having a healthy savings and refraining from keeping all your eggs in one basket.

When you have a healthy savings, it's not worrisome when the car needs to be repaired or the hot water heater needs to be replaced. If you lose your job, you're prepared! The day to day stress of these life events don't weigh over you because your financial system accounts for the bad just as much as it does the good.

Join our newsletter and follow us on [Twitter/X](https://twitter.com/InvestantGroup) for more!

![OriginalLogoInvestantTHIN.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1701147178/Original_Logo_Investant_THIN_1c2347d933.png)

Practicing patience as an investor is vital for long term financial health and well being.