Your Financial Independence Number Is Not Real If Nothing Changes

Your financial independence number is the amount of money you think you need in order to be free. Unfortunately, if nothing changes in your life after reaching your financial independence number, then the number simply is not real. You need to accumulate more capital.

In this economic environment, some people continue to believe once they achieve a liquid net worth equal to 25 times their annual expenses, they're financially independent. Yet, once they get there, they continue to work at a job they dislike for years.

Why? Fear. They fear not having enough money to safely retire early or do something else. They fear a bear market will wipe away 20%+ of their net worth. As a result, they continue to work in order to accumulate even more money.

So much about money is mental. Since leaving my day job in 2012, I have seen countless examples of the one more year syndrome play out. If you actually want to change your life, please put the 4% rule to rest.

Calculating Your Financial Independence Number

Accumulating 25 times your annual expenses is the bare minimum. With low interest rates, elevated inflation, and lower-expected returns, the vast majority of people's lives will unlikely change once they achieve this milestone.

If you want to change a suboptimal life, then you must accumulate more. Shoot to accumulate 50 times your annual expenses. At such a net worth, your courage to do something new goes way up. Interestingly, 50 times your annual expenses also is equivalent to the inverse of roughly where the 10-year bond yield was when I first wrote this, ~2%.

Personally, I've always used a target net worth based on a multiple of gross income. By using gross income as a variable, you can't cheat by cutting expenses. Further, you remain disciplined in building more wealth as your income grows.

Once you hit a net worth equal to 10X your annual gross income you will start to feel more free. And at 20X your annual gross income you will have absolute courage to do whatever you want.

We can crunch the numbers all we want to get the ideal financial independence number. We can also make fun of the Financial Samurai Safe Withdrawal Rate formula for being too conservative, even if we've never retired before.

The reality is, you won't know how you will feel until you actually accumulate your target financial independence number. Therefore, if you haven't reached your financial independence number, please keep an open mind. Chances are high that once you get to your number, you will feel differently than you imagined.

Your Financial Independence Number Might Be Fake If…

Your true financial independence number is one that leads you to change a suboptimal situation. If you think you've achieved your financial independence number, consider the follow scenarios.

1) Staying at a job you dislike

At some point, everybody is willing to suck it up and work at a crappy job to pay the bills. But if you still find yourself working at the same job you dislike after reaching your FI number, then you are probably not financially independent.

There is also a point to be made about greed. Let's say you are making good money at a company that is a net negative for society. You have accumulated 20 times your annual salary, but you continue to work to produce a poisonous product. Some soul-searching may be in order.

2) Remaining in an abusive relationship

One of the main reasons why people stay in a terrible relationship is because they don't have enough money to comfortably live on their own. Compound the lack of money with the shame of breaking up, and it is normal to see relationships last much longer than they should.

If you don't have a prenuptial agreement, give up your career to raise your children for many years, don't have a way to make your own money, and aren't accumulating assets in your name while in a relationship, you are putting yourself at risk. Please strive for financial independence for both partners.

If you cannot leave a terrible relationship, then perhaps your financial independence number is not real.

3) Not defending yourself or speaking up against an injustice

Congrats on accumulating 35 times your annual expenses. However, if you're constantly being harassed at work and aren't willing to report the abuse to Human Resources, your financial independence number is probably not real. You are too afraid to speak up because it might hurt your chances of a raise and a promotion.

Let's say someone you know is constantly verbally abusing you online. Not only do they swear at you, but they also throw in racial slurs as well. If you don't stick up for yourself and put them on blast, you may not be as financially independent as you think. In my experience, the best way to get bullies to stop is to fight back. Once you fight back, they tend to move on to pick on someone who doesn't.

Even if you have not reached your FI number, never let anybody walk over you. You are not dirt, but a human being who deserves to be respected.

4) If you continue to work too many hours to make more money

There's always another dollar to be made but never another second. Therefore, if you continue to dedicate a lot of time to making more money after you've achieved your financial independence number, you are probably fooling yourself.

If you're telling people you're relaxing in a cabin in upstate New York, but are secretly working 50 hours a week on your business, you're probably not financially independent. If you end up selling your business and then create a new business to teach people how to make money selling businesses, then maybe you are addicted to money.

It's understandable that you want to keep up a public image. But you know in your heart what the optimal amount of time to work is. If you are constantly crossing that threshold, it's probably because you don't have enough money.

One reader handed in his resignation after reaching a net worth of $6 million. After the stock market corrected, bringing his net worth down to ~$5.1 million. Not only did he not follow through with his four percent withdrawal rate, but he decided to ask for his old job back!

5) If you keep boasting about your wins to get people to like you

Everybody wants to feel validated, especially from the people that matter most. However, it's the seeking of validation from strangers that can make you unhappy.

If you are truly financially independent, you care much less about what other people think. Therefore, you find no need to publicly highlight most of your wins. Further, you won't feel the need to roam in a herd to protect yourself from criticism either.

Once you have enough F You Money, you also develop the courage to be disliked. It's impossible for everybody to like you. But if you are OK with being disliked, it means you are doing things your way regardless of other people's opinions.

6) If you still don't feel ready to start a family

Having kids is a massive decision that nobody should take lightly. However, if you've achieved your financial independence number and still worry about how to afford raising kids and want kids, then you are probably not financially independent.

Retiring early without kids is a walk in the park in comparison to retiring early with kids. Rising healthcare and tuition costs are killers. You will probably also want a larger house. And that usually comes with a higher price tag, maintenance bills, and property taxes.

Finally, you may develop the urge to give your kids everything, which may test your budget discipline. The Bank of Mom and Dad is a real thing because parents can't stop supporting their kids, even after they are adults.

7) If you ask for financial assistance

This one should be obvious, but perhaps not!

When the pandemic started, someone told me a financial independence podcast started soliciting its Facebook community for donations. How you can claim to be financially independent while asking for money is beyond me.

Perhaps this is an example of cognitive dissonance? We like to tell ourselves we are more financially secure than we really are to feel more secure. But if every little downturn spooks you to the point where you're asking people for money, you are not financially independent.

Your FI Number Must Generate A Livable Amount Of Income

You can argue all you want about the above scenarios. However, there's no arguing with this one. Once you've achieve your perceived financial independence number, it should be able to generate enough passive income to pay for your desired living expenses.

Let's say you have a $1,000,000 investment portfolio generating $30,000 a year. If you desire to live off $150,000 a year, then you are not financially independent. If you run the numbers, you will find out that withdrawing an extra $120,000 a year to pay for your desired lifestyle is unsustainable.

Sure, you could hope for 12% capital appreciation to make up the difference. However, you will most likely be disappointed in the long run. At the end of the day, your financial independence number should support you in a way that doesn't keep you too worried about your finances.

The Courage To Act Is The Main Determinant Of FI

Until you have the courage to act, you must keep on saving and investing. Suboptimal situations won't last forever. Eventually, you'll accumulate enough money to be able to do what you want.

If you're not yet financially independent, be open to the fact that your financial independence number might be wrong. It's hard to know how will you feel until after you reach your number and are faced with the decision to act. Personally, after 11 years, I’m considering giving up on early retirement and going back to work to help pay for future college expenses. Both kids are going to school full-time now and I have a void during the weekdays to fill.

If you're still working at a day job, please consider the experience of those who no longer have a day job out of choice. They've made the biggest move while you have not tested your theory.

You'll know your FI number is real when you finally do something to change your life for the better.

Keep Track Of Your Finances

One of the best ways to build wealth is to keep track of your finances like a hawk. This is why I've used Empower’s free financial tools to manage my finances since 2012. Since then, my net worth has skyrocketed.

Before Empower, I had to log into eight different systems to track 35 different accounts. Now I can just log into the Empower Personal Dashboard to keep track of all my finances in one place. I can easily track my net worth, investments, and spending as well. My favorite feature is their 401(k) Fee Analyzer tool, which has saved me over $1,700 a year in fees since 2012.

Finally, there is a fantastic Retirement Planning Calculator to help you plan for your financial independence The retirement planner estimates your future investment income and compares it to your historical spending patterns. It then gives you a probability of achieving financial independence so you have the courage to act.

There's no better free tool out there to help you achieve financial freedom sooner, rather than later.

Empower will help you get to your financial independence number
Empower's Free Retirement Planner

Readers, what is your financial independence number? How is it calculated? How do you know whether your financial independence number is real or fake? Why do some people who are gainfully employed think they know what financial independence is like when they haven't left the nest?

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63 thoughts on “Your Financial Independence Number Is Not Real If Nothing Changes”

  1. Sam,
    How do you think about taxes and swr? Do you consider taxes an expense? To me I use 3% to account for 25% taxes

  2. “Once you hit a net worth equal to 10 times your annual gross income, that is when you will start to feel more free. And once your net worth reaches 20 times your annual gross income, that is when you will have absolute courage to do whatever you want. ”

    I’m fairly certain I know the answer here but is “net worth” include all assets (house in particular)?

    So someone who has:
    1.5M House
    1.5M Investment Portfolio
    = 3M Net Worth accumulated on 150k GROSS income and 80k expenses. You would say they need 3M of portfolio networth?

    Therefore 4.5M networth for 80k expenses. Seems petty hefty target unless they downsized….

      1. Is it really a net worth exercise or should it be a Liquid Capital exercise or a combination of both?

        I am at 40X+ Net Worth for expenses, but right now only 25X Liquid Capital for expenses. My primary is 10% of NW.

        A couple items to consider if you look at a Net Worth exercise.
        Are you really going to liquidate your home to fund retirement. Probably not.
        Realistically, You cant touch your IRA’s until 59 1/2.

  3. I guess I never really assessed my finances by this metric so it was an interesting exercise. My net worth is roughly 23 times my working income. In addition to this, I have just taken a state pension at 57. I’m guessing I can assign a value of $180-200k per thousand of pension income. That part doesn’t feel like mine because I can’t just grab it all. But it’s reliable and comes with cost of living adjustments.

  4. I made $350k/yr for the last 5 years as an attorney, while my family of 5 spent ~$80k/yr. It was not a fulfilling career, so this year, at the age of 40, and with our net worth at $2M, I decided to switch gears and teach high school math/science. I make $70k/yr. Our net worth is 30x my teaching income, but I’m glad I didn’t wait until we had accumulated 10-20x my $350k attorney income before having the courage to make a change. Which leads me to my dilemma with the 10-20x income approach: If teaching ever becomes unfulfilling, does the 10-20x income approach mean that I should have the courage to make a change, but I should not have that same courage if my income was still $350k?

  5. Sam,
    Good to hear your detailed take on this after your comments on my article. In my case, 25x is not enough to retire, but it is enough to give me the confidence to leave a career I don’t enjoy. I haven’t yet, so it’s put up or shut up, right? One of the points I was trying to make is that hitting the number shouldn’t mean quit the next day. Let it simmer a bit, keep building the base, watch for what’s on the horizon (e.g. inflation, bombs in Kyiv), then plan a thoughtful exit (healthcare, negotiate a severance – do you know where I can learn more on that topic? :). Since hitting our “number” last year, we had a significant medical diagnosis that usurped most of my focus for a few months. We’re through the tough part, but that was a sobering reality check. So on to the next challenge, which is transitioning away from full-time employment while I still have young kids. Thankfully, I have a side business already established that I can move on to, so it’s less of a leap.

    1. “ hitting the number shouldn’t mean quit the next day”

      For sure! It’s not just math. I think math accounts for at most 40% of the ability for one to change a suboptimal life.

      So much can happen. A 10% correction can knock someone off 25 times expenses easily. Hence, I hope people start seeing 25 times expenses as a bare minimum.

      Best of luck!

  6. Hi Sam!

    Long time reader here.

    I respect the notion in your article, but saving up to 50x expenses seems like too much, unnecessary, and unrealistic. Don’t you want to enjoy some of that hard earned money of yours?

    I think most people increase expenses with income and net worth because that’s what living life is about. That’s been true for our family, anyway.

    I read a good book on this topic that I think you’d like: Die with Zero by Bill Perkins. I found it compelling, and I think it would really hit home for you. It’s about not dying with a big pile of money at the end (and living and spending it instead).

    Your thoughts on it would make a good post, of course.

    That said, your article always makes me think. I have a friend working on Wall Street who hit his number but didn’t stop either. So, there’s real truth here.

    Thanks, as always!

    1. “Don’t you want to enjoy some of that hard earned money of yours?”

      For sure. But just because someone keeps saving and investing past 25X expenses doesn’t mean they aren’t enjoying their hard-earned money. It’s been a relatively nice life since leaving work in 2012. But I also enjoyed most of my time working as well. It’s not an all-or-nothing situation.

      Further, I’ve adopted more of the Legacy Retirement Philosophy as opposed to the YOLO Retirement Philosophy. There’s no right or wrong philosophy. It’s just how I’ve evolved as I’ve gotten older and become a father. And if you gravitate towards the Legacy philosophy, you will need more money to help people after you’re gone as well.

      The main thesis of this article is that 25X expenses may not be enough to change your life for the better.

      How about you? What’s your number and how far away are you from it? Are you doing what you want and having a good time in the process? What about having enough money to take care of the kiddos?


      1. For us, my wife and I began our careers as more frugal spenders, saving up 2x to 5x of annual expenses early on in our 20s. As we moved into the 5-10x range in our 30s, our expenses starting growing much more than we planned on. My wife still thinks of herself as frugal, but it’s not a fair description anymore (ha!). We currently have assets around 10-15x of spending, but the multiple isn’t growing as fast because our spending has increased a lot – for example: buying a Tesla (I never thought I would), amazing trip to France last year (spending more than I ever thought we would for a single trip), private schools for the kids (not necessary, but the kids are doing well there). Currently, we’re one of those high-income, high-spending type of families that you write about sometimes.

        Is the higher spending necessary for a good life? Of course not. Is it fun and does it keep things interesting, now that we can afford it? For sure. As a strategy, we target a reasonable savings rate (20-50% per year) rather than a net worth multiple – i.e., save a reasonable amount and the asset growth will follow.

        We could probably cut back our expenses now and be closer to 20-25x, but what would we get out of that? My wife and I still find meaning and fulfillment in work and don’t intend to stop. Rather than growing the asset base to some insane multiple like 50x, we’re seeking more balance and living it up a bit more. Our 40s (coming up) will be our most important decade for creating shared experiences with the kids.

        I think a more balanced approach, like increasing spending once you’re in the 5x – 20x expense range, makes more sense than aiming for 50x. I worry that a target like 50x will cause you to over-save and under-experience. On having enough for the kiddos, that’s why we have life insurance and LTD insurance — even if we died or got sick tomorrow, they would have enough to go the distance through college.

        See if you are convinced by the Die With Zero book, it will be the best $17 you spend this week. On Legacy, one point the author makes is that most inheritances occur too late to make a difference (e.g., if you die at 90 and your child gets a big pile of money at age 50, how much does that really help them?). Why not start giving it away now? Same argument for charity, give it away so that you can see the impact while you’re alive. The book is persuasive on these points.

        Like I said, I have high respect your view and approach, yet I think being frugal right into the grave is suboptimal. Live a little..! :)

        Best wishes,

        1. All good points. We definitely should give more now while alive.

          I would say it’s hard to judge how other people should live.

          Sure, you can say “being frugal until the grave is suboptimal.” But what if you are happy with your spending amount and lifestyle? Further, not everybody is as lucky as you two to have found work you are passionate about. What is it that you guys do btw?

          Plenty of people I know who spend $300,000 -$500,000 a year after tax are living well while having $10-$25 million net worths. I wouldn’t call them overly frugal, but balanced. Can you share your rough spending and net worth?

          I think this would be a great post! “One Person’s Frugality Is Another Person’s Riches” or “Why it’s hard to judge people for how they spend their money”


          1. Yes, certainly. I’m not meaning to cast judgment on anyone’s decisions. You have your earning and spending that feels good to you, and others have different amounts that feel right to them. Each person should live his or her own best life as they see it. Each person’s spending is an individual choice, but certainly we can agree that some savings strategies are better than others. And that’s why we put our heads together to chat about the pros and cons.

            It’s like the saying goes: “Everyone who drives faster than me is a maniac, and everyone who drives slower than me is a moron.” But my driving is just right and perfectly balanced. :)

            Re: details. We have similar spending as the people you know, though not worth as much. Doctor + consultant for professions. We both work a lot, and could probably lighten up the hours, but we are driven to be our best professional selves. An outsider would probably suggest we slow down professionally. I completely recognize how fortunate we are with our professions.

            I completely agree with you on this point: If you’re happy with your spending and lifestyle, then great! To me, though, if you can’t relax or make some changes to your life when you get to 25x (or sooner), you may be too fearful (just like your article suggests).

            Great article, as always. You know you’re hitting on interesting points when you cause people to chime in with their 2 cents.

    2. Steve (NWOutlier)

      I have a short comment; One statement I’ve heard years ago was “the rungs of success are getting further and further apart”

      So, I do believe in leaving some to my son and maybe even some to other family so they can have a boost to that next rung of success.

      Generational, leaving nothing resets everything to zero and our families have to fend for themselves. I’m not looking to leave millions, but enough that they can continue their own growth.

      Just sharing my thought, I have no real disagreement with Die with Zero, it makes sense for some or a lot of families, just not for me.


  7. If you intend to continue working in a more flexible but lower paid manner through retirement years or even indefinitely should you base your FI number on the difference between your continued income and annual expenses? (Which depending on continued income amount could make your FI number much lower).

  8. Compelling points. I’d also add that if you don’t have proper insurance protecting your assets, or contracts that you abide by, your net worth number might not be real. People can get sued these days just for leaving a bad review.

    The relationship/prenup was a valuable perspective.

    1. Brett from Oklahoma

      Or you can hold your assets in separate owned companies or trust and never commingle as long as you live in an equitable division state for divorce. Also S corps and llc’s provide asset protection unless the veil gets pierced. Again don’t commingle. Easy solutions. California unfortunately is a liberal state with community property laws

  9. Between the ages of 28-50 my wife and I average income was 125k. we were able to live comfortably and save.

    Due to elevation in my career our average income from ages 50-57 was $400k per year. We maintained the same lifestyle and have just saved alot more. I do not perceive our expenses getting higher in retirement.

    Apply the 25k rule using the 125k, the 400k, or split the different? Since I recently had a very significant income rise, I would have to work at least another 7-10 years (likely past 65) to reach 25 times (10 mill net worth). Doesn’t seem necessary for someone who plans to live off of $125k per year.

    1. 20 times $400K = $8 million net worth. But you can go for 25 times your $400K income for an absolute stretch goal if you wish. You might be confusing 25 times expenses with 20 times gross income.

      I’ve suggested 50 times expenses too. So if you plan to I’ve off $125K/year, then you’re at $6,250,000. How does that compare to your existing net worth?

      But the more important question is: Do you want to retire or take it easier?

      1. Should be at $6,250,000 at the end of this year.

        Good last question. I would like to retire tomorrow.

        There are some other factors. My wife wants to work for at least another 5-10 years and is in a very stable job (minister), so that is $100k of the 125k we need. Plus she has full health benefits for both of us while she works. So we would likely have no significant drawdown in our overall net worth of 5.7mill or so, over the next 5-10 years, even if the stock market is flat just that whole time. Her salary and dividends should bring in 125k. Then we are in our mid-60s and retire early is no longer an option :) I would think at that age 5.7mill at 125k per year is fine.

        So maybe I just answered my question?

        1. Great! Congrats for answering your question. :)

          The real challenge will be whether you will actually retire by end of the year. That’s the moment of truth! Let us know then.

  10. Depending on your industry, it actually becomes harder and harder every year to get to 25x gross income because, at least in law, your income starts to rise sharply in your mid to late thirties, and bonuses get bigger, plus your investments might be earning a good amount of income as well. No complaining, and I like the metric, but for the sake of making the goal more achievable in the near term, I would have to exclude any bonus or investment income (both of which I reinvest anyway) in my calculation of gross income, otherwise I would feel like I might never achieve FI.

    1. The goal is 20X gross, not 25X. But you can certainly shoot for 25X gross.

      Got to eat hard for breakfast. It’s a better challenge precisely because it keeps you disciplined as you make more.

      And having more money to invest brings about more opportunity.

      Starting around 10X gross is when you start to feel more FI. But I recommend one keeps on going.

  11. 25x is a good target to shoot for because it’s very difficult to hit for most regular people. Once you get there, you can always change the target to 30x or 40x. It just depends on your level of comfort. Personally, I think 25x is good enough to give you some courage to try different things.

    At that level, You don’t have to produce much income for your net worth to appreciate. I mean, just work a bit so you won’t withdraw too much. Your portfolio should go up over time. At least, that was true for the past 10 years. The next 10 years might be different, though. But most people that achieve 25x are flexible. They can adjust.

    1. Flexible to do something new for sure.

      But as one commenter pointed out, if you get to 25 times expenses, you could easily go down to 23 times or 20 times in a correction or bear market.

  12. I’m sure you’ve covered this in past posts, but what was your “number” when you retired?

      1. Not to pry, but… What was the biggest determinant of how you got there. Was it employer based equity comp, personal equity investing, or some other asset strategy, or just frugality+ultra-high comp?

      2. Thanks! 3.3, which would be approx. 33x annual spending (adjusting for moderately high inflation). Although your posts are making me question whether my number is high enough.

        That said, I’ll still be motivated to earn, I just want the confidence to take ‘the leap’ to do the thing I REALLY want to do as a profession and jump off the relatively high paying current track.

          1. Appreciate it. Actually, one more elementary question (first time caller…). Do you include the value of your retirement accounts in your number?

      3. Long time reader, but my first time reading about your “number” at retirement.

        Adjusted for inflation, that $3 million becomes $3.67 million today which is interesting because $3.67 million today just doesn’t feel as significant as it used to relative to achieving FIRE numbers. My goal is 20x gross, but by the time I get there, that number may need a significant adjustment…lol

        1. I was prepared for a simple life with no kids at age 34. Further, $3 million was only about 7-11X average gross income at the time.

          But times have changed. Luckily, most of the $3 million was invested. I didn’t come up with my 20X gross income target until 5 years after leaving work and experimenting. So again, readers have to know that I’m basing my figures based off of first-hand experience and carefully recording how things are different levels.

          What’s your age and number?

          I say the ideal net worth for retirement is $10+ million.

          1. Late 30s and my goal is to hit $7-8 million to FIRE, but I’m sure I’ll need to reassess every year due to how fast things are changing.

  13. Brett From Oklahoma

    Instead of this fixation with a set number to retire say 25X income or whatever why not focus on acquiring income generating assets? I am about to be 39 and began investing in oil and gas working interest and minerals as my primary source of residual income. It’s more risky and fluctuates with prices absent hedging, but good projects payout faster than real estate( 3-5 years) income is sheltered due to depletion, and you can expense large amounts in working interest of the investment. At this point with current market pricing I have over 150,000/month in NET income and only one employee and a post office box. Green energy is great on paper and in 20-50 years will over take oil and gas, but even the largest producers (BP, Total etc) with their net zero targets are still producing over 50% of their energy from oil and gas in 2050. You can see that in their investment presentations.

    What ever your strategy my advice is start young, do what you know and enjoy, network, and always keep access to capital and most importantly play the long game.

      1. Brett from okla

        We are direct participants in oil and gas projects through the purchase of leases and minerals primarily located in the SCOOP with a focus on properties operated by Continental Resources. I studied energy management and finance at OU and began my full time career with Devon Energy working the Permian Basin in 2005. I left Devon in 2012 and had a multi year JV ( running out of my house) with a company funded by Apollo Global Management. I built up the income over the years by taking a mix of carried working interest, investing my own capital and rolling it back in since I purchased my first investment in producing wells. It has taken 15 years total and 10 years this March full time. The key for me was to live as low as possible while reinvesting all my cash flow. These are not promoted deals or securities. Also due to the nature of the investment and high capital cost with basically no salvage value should you be unsuccessful the Intangibles are 100% deductible and on horizontal wells run between 82-85% of the total cost. There are limits on these deductions, but they kick in at ownership of 1,000 barrels or 6,000/day of gas. Which in todays pricing would be north of 100K in daily revenue. So all the mid sized privates and every public can’t benefit but personal investors can.

        This is a market with high risk and lots of promoters. There is even a saying in the oil patch that if a deal can’t be sold in the industry or traded ( ie needs to be promoted) it’s a bad deal. Also be aware lots of wells may be commercial but not economic.

        I can explain way more and love the strategy, risk, trading and ownership of hard assets, but it’s a difficult field for sure.

      2. Brett from Oklahoma

        You should read about mr. 5% he more or less invited the working interest model back in the early 1900’s with Partex. Fascinating story

  14. Ideally one makes money in the US and then goes to Europe. Why? Because with “free” college and healthcare, your two biggest sources of financial worry are now gone.

    1. Healthcare isn’t always free in Europe for it depends on your status. Similarly college/university isn’t usually free – £9k pa tuition fees in Uk (for uk residents currently).

      I’m considering moving to Spain or Portugal – both require health insurance, but only for 12 months in Portugal. You do need to pay local tax though.

      Portugal has a very generous D7 passive income visa – very low tax for 10 years (circa 10%)

  15. “There is also a point to be made about greed. Let’s say you are making good money at a company that is a net negative for society. You have accumulated 20 times your annual salary, but you continue to work to produce a poisonous product. Some soul-searching may be in order.”

    Big Pharma
    Fast Food
    Investment Bankers
    Oil and Gas

    Who gets to decide what is a net negative for society?

  16. Getbusylivin'

    Great article as usual, Sam. Thank you.
    Reading through, I feel like I’m a case of the reverse. No one would hire me early in my career, stating that they knew I wasn’t going to stick around and they couldn’t be the one to pay for my OTJ training. I was all but forced to start my own company to take a short term consulting gig. That turned into a ~20 year self-employed consulting career gig with what felt like many monumental risks over the years. Now retired, I’m getting called by recruiters more often than I expected and landing interviews left and right. The risks you speak of make sense, but way less risky compared to those I faced while running my company. That is, any financial risks I’m facing in retirement don’t cause me to lose any sleep where back then, adding a 401k to my benefit program had me getting and hour or two of sleep for a week as I pondered the extra expense.
    Because of my philanthropic channels, a job offer in retirement could be attractive due to the charitable giving match programs and extra resources available to support the causes I’ve decided to be a part of.
    I’ll also offer that contacting HR when there are interpersonal issues at work isn’t always the solution unfortunately. A really bad apple knows how to manipulate HR and HR tends to default to believing someone straightaway, making their investigations biased and a ‘guilty until proven innocent’ scenario.
    Definitely not true of ALL situations but I’ve seen it go this way and it is alarming.

    1. Sounds like you have enough then!

      Good job taking ownership of your wealth and career path when nobody wanted to hire you.

      I tried joining promising startups and big tech companies in 2012, as a condition to receive unemployment benefits. Got nothing after sending out more than 100 resumes.

      It actually made me feel great, Because I knew I tried And could move on with no regrets. Burn the boats!

  17. I think readiness to retire is about much more than financial readiness. Some people feel their identity is tied to their career, so even if financially they don’t need the job, emotionally they need it. Some people don’t have strong enough interest in doing other things so they stick to their schedule by default. I agree that it’s important to call out One More Year syndrome so that people who are financially independent can waken from their stupor and consciously decide to keep working or not, but to do it out of love and not default. One thing that worked for me was gradually changing my activities. We FIRE’d in 2019 right before the pandemic. We had anticipated traveling a lot and had multiple trips just cancelled with no rescheduling in site. Out of default, I jumped right back into working. But starting in 2021, I purposely built in more downtime, if not to travel, then to do things locally. When you come from a Type A, 24/7 culture (I spent 40+ years in NYC), you need a plan to go from 100mph to a stop.

    1. For sure the mental/psychological part is more important.

      It’s something I have tried to explain almost every year since 2012. It’s one of the reasons why the financial samurai safe withdrawal rate is so conservative, because the initial one or two years after retirement is going to be extremely jolting, especially for those who worked hard for a very long time.

      I really do hope people realize the psychological aspect of changing gears. It is one thing to pontificate about retirement while you were gainfully employed. It’s another thing to experience it once you cut off your steady paycheck.

  18. Totally agree that FI is a combo of having a target number and also having the courage to make positive changes and feel free.

    My financial independence number has changed over the course of my career and life as I switched jobs, moved, and started a family. It took courage for me to make big lifestyle changes along the way for sure.

  19. Long term follower here! My number is one million dollars and, with W. Africa being my final destination, that positions me well on purchasing power. But your articles on this topic make me doubt my math. Oh well, we shall see in four years if I can pack and leave!

  20. I hit the 25x number mid-2020. It didn’t make a difference at all to me, but I also still had a mortgage to pay off and the ups and downs of the market made it seem likely that I could easily regress to only having 20x instead.

    A year later with the mortgage gone and closer to 30x saved up, I felt much better about the finances. I started the process to shift to working part time, which has been slow but should be official in the next month. I also started spending a little more liberally since I’ve had a lot of extra income over the last year that I didn’t really need, and any income from part time work will also be extra.

    As I type this, I’m probably closer to 40x or 50x my baseline annual expenses saved up. But it’s hard to say for sure due to home ownership expenses being so uneven. In the next year or so I’m planning on spending much more than usual to knock out some big expenses while I’m still employed (e.g. tree removal, sauna install, misc. house upgrades). But even those big expenses won’t offset the part-time income.

    My biggest concern now isn’t finances. It’s figuring out what I want to do with the rest of my life now that the financial grinding is done. I’m shifting to part time work mostly to ease into having more free time (and to make it easier to justify that sauna purchase!).

    1. A transition to part-time work makes sense! I did some part-time consulting for 15 to 20 hours a week from 2013-2015 after taking 2012 off. It was fun to learn about financial technology start ups, and their marketing departments. But after three years, the novelty wore off since you’ve learned everything there is to know.

      Enjoy the sauna! But even better, is the hot tub! That’s the best purchase I have ever made with $15,000.

  21. I remember when that financial independence podcast started asking people in their Facebook group for money in 2020. They had no shame, even though the hosts kept telling their listeners they were financially independent.

    It really is strange why people don’t realize their follies or accept the truth. It’s kind of like why people came up with Coast FIRE, which is really another definition for being a regular working person who saves for retirement.


  22. I’m afraid #3 is not realistic. We are now very clearly in a climate where even the slightest complaint about a number of injustices can result in deplatforming so substantial that your assets will be frozen or seized.

    The entire concept of financial independence assumes a legal framework that does not exist – that is, one where property rights exist. No amount of money made a resident of the Soviet Union safe from the gulag, and it is becoming more clear that no amount of money makes a Canadian or American safe today. Even being merely related to someone who donated to the “wrong” protest is cause for warrantless, extra-judicial asset seizure in Canada now.

    With no legal recourse.

    1. What country do you live in? I’d love to understand more about the historical confiscation of assets for speaking out.

        1. Yes, it does. Joined by millions of other Canadians and people around the world who are equally shocked by what has happened to the country. The path may or may not be reversible.

          If it can happen so quickly and publicly, with no debate or opposition, in once relatively-free Canada, I assure you it can happen anywhere.

          In the current social and political climate driven by global forces, “it can never happen here” is a most ridiculous thing to say.

  23. I agree with this. 25x is great to attain, but even at that level taking an early retirement is risky. Of course, there are things you can do to mitigate the risk by investing in cash flowing assets like real estate or a business. That was essentially my strategy when I became Accidentally Retired, but overall, I decided to do something to act and make a change. I left my CEO job, I took a mini-retirement and fired my financial advisor. So while I surely could have worked another few years and locked it down, it wasn’t worth it to me. Now I live on my own terms again and I love it.

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