The great thing about personal finance is that it is just that – personal. We all have different lifestyles, income sources, spending habits, goals, and financial responsibilities. Thus, the amount we each need to reach financial independence is unique. What’s your financial independence number?
If one can accumulate $3 million in cash, that should be enough to lead a comfortable life. After all, to be a real millionaire, $3 million is the new $1 million due to inflation. Would you agree?
Your answer likely depends on variables like where you live, how old you are, your debt level, and if you have dependents.
Let’s talk further about a $3 million financial independence number. With $3 million, you could earn $120,000 a year in interest income at a 4% yield doing squadoosh. Not only would you be receiving $120,000 a year, you’d STILL HAVE your $3 million bucks in the bank!
I don’t think I need more than $80,000/yr to live a comfortable life in one of the 5 most populated cities in America as a single buy. $80,000/yr would be especially enough if my mortgage was paid off, another goal of mine before “retirement.”
But now that I’m a father of two kids, I’d feel stretched on $80,000/yr. Your financial independence number will likely change over time as well.
Readers, before I delve deeper into the number, I’d love to hear your thoughts on what the ideal and realistic financial independence number is for retirement, and how much is the minimum amount of income you would be happy to live on.
Financial Independence Number Resources
Here are some additional resources I’ve put together. The more you learn about personal finance, the better your chances of achieving your financial independence number and beyond.
Knowledge, goal setting, and determination can help you earn more, save more, and hopefully double or triple your income!
- Take advantage of free online financial tools: Free Wealth Management
- Explore my top financial products recommendations
- Learn how much you should aim to have saved in your 401(k) by different ages. The numbers could surprise you.
- Look beyond your salary and start earning passive income. Here are the best passive income streams I recommend.
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Be sure to check out my post on Ranking The Best Passive Income Investments as well. Passive income can help set you free!