Unless your $7K expenditure calculation includes putting away quite a bit of savings (Which, unless there's a massive early repayment fine on your loans, it shouldn't), you'll also need to pretty much halve that optimistic 4% to ensure that your capital doesn't decline in real terms. That's assuming inflation remains as stable as it currently is.
I did some back-of-envelope calculations, a few years ago, based on the inflation common savings interest rates of the time, and median salaries where I lived. Basically, given £1M in a savings account and no other income, someone who lives as though earning the median salary (including reinvesting about 30% after tax), could expect to start eating into their capital (in real terms) within about 3 years. I can't remember how long it would take for their capital sum to actually drop below £1M, but I do remember it taking about 30 years to drop to 0.
Now, you're obviously a bit more frugal than the average bear, but you're talking about having a tenth of that capital, and a sixth of that expenditure, which already doesn't add up. Also, my calculations above were made when even a risk-free savings account would score you nearly 5% APR.