FINANCIAL INDEPENDENCE
How can I calculate my Financial Independence number
Hi everyone! I'm trying to figure out my 'financial independence number', the amount I'd need to be financially independent and cover my expenses without needing to work. Does anyone have tips on how to calculate this or any resources to help me get started? Thanks in advance
Diego Lopez.
13 November 2024
1 Comments
7 days ago
Hi Diego.
Most of the FI community works on a rough rule of thumb called the 4% rule. That’s the amount you can typically live off from a diversified share portfolio per year over a retirement period of many decades.
This means you need roughly 25x your annual spending in shares. So if you spend $40k per year, you need $1m. If you spend $60k, you need $1.5m and so on.
Hope that helps.
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