Member-only story
Is € 1.000.000 enough?
The 400-month illusion
You have one million euros in the bank and your monthly expenses are €2,500. How long will the money last?
Go ahead, grab your calculator. I’ll wait.
Done? You probably got 400 months, which is a comfortable 33.3 years. You’re set for a good long while. Congratulations.
Except that you’re wrong.
That simple, logical calculation is a financial trap. It ignores the single most destructive force working against your savings: inflation.
In this follow-up post, we’ll take a closer look at the forces that move your money up and down.
What makes this financial puzzle so challenging is that you’re fighting two different kinds of forces.
Inflation is like a river current. You know it’s always there, constantly pulling you downstream. That part is predictable. What you don’t know is how fast it will flow from one year to the next. It can shift from a gentle drift to a raging torrent during a crisis, even if it averages out over time. This…
