The money clock: what your money pays for, as a time of day

From a percentage to a time

Take what your money earns without you, and set it against what your life costs. If it covers a quarter of your spending, it pays for a quarter of every day: from midnight until about six in the morning. The share is the same; the time is the part people remember.

Every pound of passive income moves the hand. In the example above, each extra £100 a month adds about 43 minutes to every day. Financial independence is the hand coming all the way round to midnight again.

What counts as passive

Only what an asset earned: savings interest, dividends and rent after its costs. A second job is not passive income, and neither is freelance work, however it was paid. A drawn pension is left out too, because counting it would tell a retiree they are independent on the strength of income that stops with them.

The spending it is set against is your own, built from your statements: what you cannot skip, what moves from month to month and what recurs.

Two clocks, not one

A pension cannot be drawn before the minimum pension age, so CoreFi keeps two answers apart: the date money you can already reach would cover your spending, and the date everything would, never earlier than the pension age. Quoting only the flattering one is the commonest way these calculations mislead.

Questions