Hi Diego.

Good question. While many calculators are useful as a guide, I’d say the true answer in practice is, not really.

It depends entirely on what investments you own, what level of income + growth they produce, whether there is debt associated, and other things.

The general rule of thumb is that you are financially independent if you have 25x your annual spending in investments. This relates to the sharemarket generally. So $1m in shares = $40k pa income. If you spend $40k, that covers your expenses = FI.

But many (if not most) people have a more complex situation than that, including property investments which might have equity yet provide no income. That makes the calculation and practicality of FI less simple.

Some people will be willing to change their portfolio to make FI happen, others would rather just keep the assets they have even if it means working longer.

Then there’s super which may form a decent part of someone’s net worth, but which may not be accessible for a long time, or someone might prefer not to rely on it.

While having equity in different assets is great, it doesn’t help pay any bills unless the asset is sold or the money is invested into an asset which produces usable cashflow. So it’s a case by case scenario.

Hope that makes sense.
Dave