The Minimum Investment Portfolio Balance To Start Feeling Free

How big of an investment portfolio should I have to be financially free or start feeling free? This is one of the most common questions people starting on their financial independence journey ask.

Sometimes telling people they should accumulate at least 25X their annual expenses or 10-20X their annual gross income may seem too daunting. As a result, they may get discouraged and not even start.

Therefore, to boost motivation and momentum, I've come up with the minimum investment portfolio amount for financial freedom seekers to shoot for. That amount is $300,000. Once you have accumulated $300,000, you will start to feel financially free or that rich feeling.

Let me explain by sharing some key investment portfolio levels based on our personal accounts. Once you accumulate about $300,000 in invested capital, your potential returns might be consistently greater than your annual contributions.

Starting The Financial Freedom Journey Early

One of the interesting things about having kids is that you get to start over financially. As a forward-thinking parent, I'm certain my adult children will have wanted me to build an investment portfolio for them while they were young. After all, compound returns are some of the most powerful forces in finance. The sooner we can start investing the better.

The main way we can help our children build an investment portfolio is by opening up a custodial brokerage account and/or a custodial Roth IRA. If you expect your estate to be above the estate tax threshold when you die, gifting the maximum gift exemption limit each year may be a smart idea.

The custodial Roth IRA is especially attractive if you have a business because:

  • Your contribution serves as a business expense
  • The income by the child is earned tax-free if it is below the standard deduction threshold
  • The investments get to compound tax-free
  • Withdrawals are also tax-free
  • Your child develops a work ethic
  • Your child will better appreciate the value of money

You don't need a business to open up a custodial Roth IRA. Your child just needs to have earned income.

When Your Investment Portfolio Is Too Small To Matter Yet

Below is my son's Roth IRA portfolio. It was up a respectable 25.49% with names such as VTI, TWTR, TSLA, NFLX. VTI slightly underperformed, TWTR and NFLX underperformed, and TSLA drastically outperformed the S&P 500.

Most of us would be pleased with a 25.49% annual return given it is about 15% higher than the historical return average for the S&P 500. However, in this portfolio's case, a 25.49% return amounted to only $2,682.44.

For an adolescent, the absolute dollar amount returned is good. However, for an adult, $2,682.44 doesn't really move the needle. It could pay for a month's worth of living expenses for a frugal individual, but that's about it.

There is no feeling financially free with only a five-digit investment portfolio balance. Therefore, the only thing to do is to keep contributing. Hopefully, the taste of sweet returns keeps an investor hooked.

When Your Investment Portfolio Amount Begins To Matter

Any amount of money in your investment portfolio matters. However, the idea is to figure out the target investment portfolio amount to shoot for so that you can start to feel more free. The more money you have, the greater your ability to fund your retirement and generate passive income.

After my early retirement honeymoon period was over, between 2013 – 2017, I decided to do some freelance consulting for several fintech startups. I also gave over 500 Uber rides and coached high school tennis for three years. It was a great time for exploration before I became a father in 2017.

During this time period, I maximized contributions to a Solo 401(k) (aka KEOGH 401(k)). As a sole proprietor, you can contribute the maximum employee portion plus a percentage of your operating profits as the employer portion.

Since inception, I have contributed $146,321 to my Solo 401(k). But I have not contributed for over three years.

Solo 401(k) Performance Snapshot

My Solo 401(k) returned 36.42% in 2021, or $82,232.70 to $317,383. The returns were brought up by TSLA, HUT, and AAPL and dragged down by Alibaba, BIDU, and UBER. $82,232.70 is real money that can cover a typical American family's expenses for one year given the median household income is around $70,000.

However, a 36.42% return is abnormal. A more normal return would be between 8% – 12%, or $18,062 – $27,093, based on my beginning balance of $225,778. This return amount still feels relatively significant, given a part of it is greater than the current maximum 401(k) contribution limit of $20,500.

Therefore, starting around $200,000 is where your returns might sometimes match or surpass the maximum contribution level. However, a return of $18,000 – $27,000 a year based on a $225,000 balance is not quite enough to feel financially free yet.

The Minimum Investment Portfolio Target Amount To Shoot For: $300,000

Based on historical returns, expected returns, and normal individual living expenses, if you want to feel more financially free, the minimum investment portfolio amount to shoot for is $300,000.

With a $300,000 portfolio, you have the potential to return an annual average of $30,000. Once your portfolio has the high potential of returning greater than the maximum contribution amount, psychologically, you feel like you no longer have to work as hard to contribute as much.

Further, most individuals can live off $30,000 if they really want to. Sure, there might be some years where your portfolio loses money. But then there might be some years where it returns 35%.

If your $300,000 portfolio is in a taxable brokerage account, you can always draw down principal interest and penalty-free to pay for some of your living expenses as well. A 2% – 5% withdrawal rate equals $6,000 – $15,000. However, I would draw down principal only if absolutely necessary.

You want to give your portfolio as much time as possible to compound into the millions. Once you have a liquid net worth equal to $300,000, you'll start feeling financially free. You'll get motivated to make more money.

Coast FIRE Also Means $300,000 Minimum

Personally, I would have gladly kept working in finance for five more years if I could have worked 20 hours less a week for 30% less pay. Working 40 hours a week versus 60 hours a week would have been a walk in the park. But back then, there was not as much work / life flexibility as there is now. I was burned out.

Nobody retires early from a job they like or love. This is one of my key points in my now classic post, The Dark Side Of Early Retirement. Some wandering souls simply haven't found the ideal job yet. But instead of keeping the search for meaningful work alive, they give up early.

I've determined a $300,000 portfolio is also the minimum amount necessary to consider yourself Coast FIRE. Coast FIRE is where you no longer have to contribute to your retirement portfolios because they may grow large enough to fund a traditional retirement.

Coast FIRE Example

Let's say you have $300,000 at age 30 and traditional retirement is considered age 65. At a reasonable 6% compound annual return, in 35 years, your portfolio will have grown to $2,305,000 without any contributions. Despite inflation, $2,305,000 along with inflation-adjusted social security should be enough to provide for a reasonable lifestyle.

Given your portfolio's potential growth, at age 30, you might decide to quit a stressful high-paying job for a fun job that pays just enough to cover your living expenses. You won't have much excess cash flow to save. However, you won't need to if your investment portfolios continue to grow.

The main risk with Coast FIRE is that you trick yourself into complacency. The term was made up to give financial independence seekers motivation to feel good about still being so far away. So much about money is psychological. Just make sure you're not ignoring the root of your frustrations.

The Next Investment Portfolio Target: $1+ Million

Once you reach an investment portfolio balance of $300,000, the next logical goal to shoot for is $1 million. Suddenly, striving for a $1 million investment portfolio no longer feels as daunting.

Your $300,000 portfolio will get to $1 million if it grows by 8.4% a year for 15 years without contributions. But if you regularly contribute $20,500 a year while earning a 8.4% annual return, your portfolio will get to $1 million in just 10 years. The mountain to climb just turned into a hill, especially if you enjoy your job.

My 401(k) balance is currently about $1 million. I rolled over to an IRA in 2012. In 2012, the balance was about $350,000. I haven't contributed a penny to my rollover IRA since 2012 because I can't. Therefore, the compound annual return over nine years is about 13.5%.

The rollover IRA started 2021 at $859,468 and closed the year up $256,362 to $1,115,830 for a 30% return. $256,326 is enough to pay for a year or more of living expenses for a family. Too bad the 2022 bear market brought it back down to earth.

Fat FIRE Requires $3+ Million Investment Portfolio

Shooting for a $1+ million retirement investment portfolio balance gets easier over time. With this portfolio amount, you will really begin to feel free. If you want to achieve Fat FIRE, you'll likely have to have an investment portfolio equal to $3 million, preferably per adult.

With $3 million per person, you can generate at least $150,000 a year risk-free with today's rates. If you can earn a 7% – 10% return, now we're talking $210,000 – $300,000 in returns. Now that's a pretty free and great life!

If you're afraid of society no longer rewarding you based on merit, once you achieve a net worth of at least $1 million per person, you won't stress as much. Ideally, you'll get to a net worth of $3 million per person, which I consider F you money.

Your Investment Risk Tolerance May Not Be Dependent On Age

As I get older, what I'm noticing about my risk tolerance is that it hasn't declined as much as I thought. Instead, my risk tolerance is more closely associated with my earnings power.

On January 31, 2020, my rollover IRA above had a balance of $675,219. Then, the pandemic hit and the balance fell to $546,194, or a 19% decline. A large structured note investment helped dampen the fall given the S&P 500 had declined about 32% during this time.

I remember being bummed out about losing a lot of money back then. So much financial progress got wiped out in such a quick amount of time. However, I have let the portfolio with a 95%+ equity allocation ride since the March 2020 meltdown.

The main reason why is because I can't tap the portfolio without penalty until 2037. It's easier to take more risk when you have a longer time horizon.

Growth Of Active Income

But the other reason for maintaining a high equity weighting is because my active income grew. After my daughter was born in December 2019 I decided to become more entrepreneurial for two years.

As my active income grew, so did my risk tolerance. Based on my Financial SEER formula, the time it took to make up for any potential losses declined as earnings grew. Therefore, I kept risk on and continued to invest most of my cash flow into stocks and real estate.

If you want to increase your investing courage, make more money. The other way to increase your courage is to have stacks of cash. But in this inflationary environment, the cash should be strategically deployed.

Supreme Focus To Get To $300,000

If you are just starting out on your financial independence journey, please focus on saving and investing as much as possible until you get to $300,000. The same goes for those of you who have not yet built a $300,000 investment portfolio.

Make it your mission to max out all tax-advantaged retirement accounts and invest at least 20% of your cash flow in taxable brokerage accounts. Along the way, you can also build your real estate exposure online and eventually own your primary residence. Because achieving financial freedom is much easier once you have stabilized your housing costs by owning real estate.

For those of you starting with zero, I'm confident you will be able to accumulate $300,000+ worth of investments within 10 years. You will be surprised by what time can do. Once you get there, you will feel this lightness in your step as you do more of the things you want. No longer will you be as driven to work for money.

The freedom to choose is a priceless feeling. And to achieve this priceless feeling for only $300,000 is a damn bargain! Get to it!

Diversify Into Real Estate Passively As Well

Your $300,000 investment portfolio target doesn't just have to be in stocks and bonds either. Consider diversifying into real estate as well. Real estate is a tangible asset that is less volatile than stocks, provides shelter, and generates income.

Real estate is my favorite asset class to build wealth. As a result, 50% of my net worth is in real estate as opposed to 30% in stocks.

Here are my two favorite private real estate investment platforms. No longer do you you need to only buy real estate where you live. Now you can strategically invest across the country.

Best Private Real Estate Investing Platforms

Fundrise: A way for all investors to diversify into real estate through private funds with just $10. Fundrise has been around since 2012 and manages over $3.3 billion for 400,000+ investors. 

The real estate platform invests primarily in residential and industrial properties in the Sunbelt, where valuations are cheaper and yields are higher. The spreading out of America is a long-term demographic trend. For most people, investing in a diversified fund is the way to go. 

CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations and higher rental yields. These cities also have higher growth potential due to job growth and demographic trends. 

If you are a real estate enthusiast with more time, you can build your own diversified real estate portfolio with CrowdStreet. However, before investing in each deal, make sure to do extensive due diligence on each sponsor. Understanding each sponsor's track record and experience is vital.


I've invested $810,000 in real estate crowdfunding so far. My goal is to diversify my expensive SF real estate holdings and earn more 100% passive income. I plan to continue dollar-cost investing into private real estate for the next decade.

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77 thoughts on “The Minimum Investment Portfolio Balance To Start Feeling Free”

  1. Great article Sam! Long time reader here. I’ve learned so much with your posts and readers comments afterwards. I agree, around $300k, you feel a little lighter. But to achieve this you need to be somewhat savvy on your retirement acct funds. I’ve been on a deep dive for over a year trying to decide what funds I want in my 401k to achieve FI. After reading all the different strategies and plugging away at portfolio optimizers, I now have information overload and can’t decide which funds to incorporate into my retirement account. I’ve mainly relied on VOO and target date funds to achieve what I currently have now. Do you have an article on portfolio funds that I don’t see and if not, is that something you would write on? I know this is a complex topic, but your articles resonate well with me and know you have a background in the market.

  2. Currently sitting at 2.3M net worth as a 33 year old female. I was lucky to have lived at home with my parents until I built my first house at 25yo and used cash savings and equity to acquire 4 rental properties over the subsequent years. Lived very frugally during this time which gave me a real appreciation for the importance of saving and how small daily habits and discipline can make a huge difference over a relatively short space of time. I’m in Australia and fortunately since purchasing my properties the housing market has gone nuts seeing most properties in my state more than double in value over the last 5 years to catch up with values in the rest of the country which has largely contributed to my position now so you could say there was a lot of luck involved particularly given the sentiment at the time was that the low cost areas I bought my rentals in weren’t going to show much capital growth. Am finding your articles really insightful since deciding to dabble into stocks/index funds last year and I’m doing a lot of reading to learn as much as I can – obviously our superannuation system is much different but have been piling some extra money into that as a tax advantage. The ironic thing I find is that the more financially independent I become the less I realise I need in life to be content. I’m only really concerned with having a nice home in a good suburb on a good size chunk of land as I’m a big homebody, but I really couldn’t care less about cars, boats, jewellery etc and I actually enjoy consuming less and giving up the idea of always having to have more and more. I did always LOATHE working full time not having any time to myself during the week and spending weekends drinking wine to numb the pain of the working week doing housework and catching up with people I didn’t have a chance to do during the week. I remember my first day of full-time work in an office and finishing the day feeling so depressed thinking that going to be the rest of my life. This is what propelled me to start saving at a young age, if I was going to be stuck staring at a screen in an overly air-conditioned room then I had better make it count for something. I made the decision to work only part-time a few years ago which I find is an ideal balance between having time for hobbies and focusing on personal growth while also feeling purposeful having a job and getting out of the house. Am hoping to achieve a stage of earning enough passive income in the next 5-10 years so that my husband and I can fully retire and live part time in US/Canada however given I’m still fairly young I’m honestly a bit daunted by the options that await…… Thanks for your articles and keep up the good work!

  3. $300k is right around the threshold that I also felt a psychological shift. I didn’t feel financially free and am still a long way away from FIRE but I felt less pressure. Less of a nagging feeling that I was spinning my wheels in financial mud and feeling that I could more easily take risk with my career.

    I initially found it odd that my increased wealth led me to feel more risk loving as this is the opposite of many articles I have read and opposite of the potential complacency you warn of. For me, seeing the progress and having less pressure gave me the confidence to aim for a lifestyle I didn’t think I could previously support.

    This threshold gave me the inspiration to write about my journey towards FIRE now that I feel sufficiently far along in the journey to comment on where I’m at. By chance, I published the article ( on the exact same day you published this one.

  4. Hi Sam, thanks for this great piece. It resonates with me, and coincidentally I also picked a $1M investment portfolio as a notable personal milestone.

    Up until recently I did not have an investment portfolio since I was focused on buying a modest primary residence. I accomplished that goal a little over five years ago, but then it felt daunting to start an investment portfolio when equity prices seemed so high and I had very little investible cash with a mortgage. Between a bit of timing luck, new job, and salary growth I was able to get to over $300k in cash savings shortly before the pandemic.

    I had a high risk tolerance but felt very timid on investing any of the cash savings. The main catalyst for me was a personal decision to live off my salary and ensure RSU shares I receive stay in the market. So with this strategy, I finally felt comfortable starting to build a portfolio by selling portions of RSU shares to diversify into a 3-fund ETF portfolio. It was really a 2-fund ETF portfolio – I didn’t care to include bonds since I was aiming for max risk/reward.

    When the pandemic hit, the shock to the markets was the event I needed to motivate me to more substantially invest. I channeled Warren Buffet’s advice to be greedy when others are fearful. I also felt I had nothing to lose due to substantial income replacement and made the case to myself that I was getting a large discounts to 2017 prices. Some days it felt unsettling to see unrealized losses of 10k and still deciding to slowly buy more. But with this strategy to diversify RSUs and more willingly invest cash, I invested over 200k in equity markets in 2019 and ended up a 16% return at year end. I became hooked during 2021, willing to invest more cash when markets heavily pulled back in addition to making regular steady investments. I figured I was kind of playing with house money and also felt more risk-tolerant since the FED was helping financial markets. Also maxed 401k, learned I had access to megaback door roth, and started a 529 during the pandemic, deciding to contribute the 15k max spread out over the year with a similar high-risk strategy 2-fund ETF portfolio strategy. Debated superfunding but opted for growing the investment portfolio.

    Between RSUs and finally moving cash off the sidelines, I’ve managed to get to over 800k and I’m really trying to get to $1M this year. 2021 was a great year for RSU and equity growth but now I’m back to feeling that equity prices are too high to invest. So my path to $1M is now diversifying RSU and cash savings into bonds, and relying on dividend reinvestments. If equity markets pull back significantly maybe I’ll try deploying more cash but I’m in a wait and see mode for 2022, at least until I start to get a better sense of rake hike / inflation implications and trends.

    1. Hi Josh – Nice job coming up with a strategy and taking action! I’ve met lots of people who ended up hoarding lots of cash on the sidelines for years (60%+ cash in their portfolio) because they were unsure of what to do. Maxing out the tax-advantaged accounts is the minimum no-brainer.. .and if people can then save and invest at least 20% or more after, even better.

      It sure feels like we could now easily experience a 10%+ pullback as we did in 4Q2018 when the Fed was hiking rates. I’d leg into corrections and not be in any hurry.

  5. Hi Sam,

    How were you able to set up custodian Roth IRA for your child, does your child work?

    Thank you.

    1. Yes, a child needs to have earned income to be able to contribute to a Roth IRA. Do your children not work? If not, I would encourage them to find part-time jobs because the work ethic they develop will help them tremendously over the years.

      I’ll never forget my time working at McDonald’s for $4/hour. Every time I feel too lazy to do something today, I think back to when I had to stand for 8 hours in front of a hot stove every day and realize how much easier life is today.

      Related: Three Bad Jobs That Can Eventually Make You Rich And Happy

  6. Zeus Garcia

    I started feeling more financially secure when my deferred compensation balance hit $500k. It was a great feeling when my investment returns outpaced my annual salary. I don’t feel the need to work overtime as much, unless it means I can contribute more to my deferred compensation. The benchmarks for me in the beginning were modest, $1k, 10k, & 100k. Once I hit 100k I knew $1 million was possible. I’ll continue to max out my deferred comp for at least 5 more years. Combined with my wife’s 401k, brokerage, and home equity, we’ve reached the $1 million threshold. My wife drives a 19 year old Nissan & I drive a 16 year old Honda. We still live very frugally in our journey to reach $3 million.

  7. Love the post as always. Quick question. Would you consider a rental property as part of an investment portfolio or are you strictly retiring to retirement accounts?

    1. Yes, I would include the equity you have in real estate as part of the minimum investment portfolio balance to start feeling free as well, especially if you’re cash flow positive. Thx

  8. I would like to know what equities did you invest in over those 10 years? Individual stocks, index funds, REITs, etc? And what do you recommend now to help $300k to grow to $1M?

  9. This is funny because I just got to $300k net worth this week and was feeling real happy about it. 25 years old and ready to keep it going.

  10. I’m going to disagree a little and say that $100,000 is THE mark as you start off your life. I remember when I hit this point I felt a sigh of relieve and also knowing that we could basically make it though any potential downturn.

    This led me to take the journey into entrepreneurship and eventually work my way into a bigger portfolio as that journey progressed.

    But it all started with the $100K. I think by $300K you are feeling pretty good. Now, maybe inflation will continue to eat into that, and I agree that $100K is not all that much any more, but for many it is all mental.

    1. That is great you started to feel financially free with $100,000. Maybe our cost of living situation was quite different. I was in Manhattan and had just made my first $100,000 during the 2000 dotcom bubble with a Chinese Internet stock. Then the NASDAQ crashed over the next two years. So I definitely did not feel like I could start cutting things back at work in my early 20s. So the other function is probably age at which you get to certain financial milestones.

      How old were you and where were you at $100,000?

  11. That’s awesome and so accurate.

    Current net worth of $350k, age 30 with a goal of $1.5M by age 35.

    Over the last year I’ve hit the 300k mark, and I definitely feel so less stressed about work since I crossed the threshold, so much so I actually quit my job and took a 30% paycut!

    My life is so much better now, I’m kicking myself I didnt do it sooner.
    If you’ve any interest I’ve published my thoughts here:

    Thank you again for the great post!


    1. Congrats for making a change! If you can 4.5X your net worth in 5 years, that will be very impressive.

      How do you plan to do that and what job did you get at what pay?

  12. I like this number. I was under $300k when I quit my job to try full-time blogging and gig work. But I felt comfortable with the amount I had. And thankfully, our household has been able to keep saving.

    Our family does have a million-dollar net worth technically, but most of it is tied up in businesses and property, so I don’t actually feel like a millionaire. I’m still a long way from a $1 million portfolio but will feel good once we get there.

    1. Same here. Once I hit $300k portfolio I felt more financially free as well.

      Even though I hit Coast FIRE, I haven’t rested on my laurels. I still contribute to a Roth and my retirement accounts. And also look for ways to increase my income. But I notice your portfolio grows a lot faster once you hit this milestone.

      I say max out all your retirement accounts and let it take you to $1 million in about 15 years.

      Never give up, never surrender. And you can never be defeated, like Babe Ruth once said. So just keep reaching for those stars.

      Good luck to all those on their million dollar journey.

  13. In todays negative interest world, does it make sense to use $10k of equity out of my mortgage (3.375%) to invest 10k in an ibond (7%) ?

    1. Prob not because the I bond rate is only for 6 months, although I’m guessing you’ll get at least 12 near that rate. Mortgage is a much longer time period

    2. Manuel Campbell

      You could. But it’s only a guaranteed rate for 6 months. For a gain of 187$ (net of interest on mortgage). Is it really worth the trouble ?.

      Or you could invest 10K$ in Alibaba. If the shares double in price over the next 6 months, that would be a gain of 10K$… But it’s far from guaranteed.

      Your decision.

  14. Funny that the minimum to stop working is 300k. I just quit my job with 300k in my investment account last week.

    I also have a duplex and two houses im renting out.

    Feels good to have you confirming that I made the right decision.

  15. Manuel Campbell

    Very interesting article. Thank you Sam for sharing your thoughts !

    The first financial achievement for me was to get to positive financial net worth. What I mean by that is portfolio value minus any debt (the most important one being the personal mortgage). That number could easily match the 300K$ mark in your article here for a regular individual.

    I feel that, before that moment, time is actually working against you. For example, a 100K$ investment portfolio for someone who has a 500K$ mortgage can earn maybe 10K$ (+10%) but has to pay something like 15K$ per year (3%). So, the longer you stay in that position, the hardest it is to get out of this position. You really have to move fast to get out quick.

    I never invested in rental properties, but I guess the thinking would be the same for a real estate investor. If someone has a 1M$ appartment building financed at 80%, that property would count as a 200K$ portfolio in my example. If that person also has a 1M$ personal mortgage, the situation would be the same as the first example, in terms of ratios (personal debt 5X the investment portfolio).

    As you pay of the mortgage, you eventually cross a line where your financial assets (plus net investment real estate) surpass financial liabilities. That is where it start getting interesting. Because, in that situation, time is not working against you, but with you.

    Even a 300K$ portfolio returning meager return can at least offset interests on the 300K$ personal mortgage. Plus, since you now own your home, you don’t need to worry about house prices going crazy.

    I think that is an important threshold. But that is nothing like FI. The 1M$ is really where it starts getting interesting. I think this is a great place to start thinking about FI. But even that mark seems like “not that much” when you get there. I think there are two reasons for this.

    First, in case of a market crash (stocks or real estate) or very high inflation (which is bad for cash and bonds), it’s not hard to imagine a -40% setback in purchasing power. Few people realize it before they get there, but a -40% setback on a 1M$ portfolio is a 400K$ loss ! No wonder why so many people prefer the security of a steady job… ;-)

    Second, to get to that 1M$ portfolio, most of us really need to have that “saver” mentality. So, getting to the 1M$ mark and shifting to a “spender” mentality is a very hard shift to make. But there is a solution to this… Why not reach the next level of wealth that insure permanent portfolio growth and no planned depletion of assets ?

    I would put that last threshold around the 1 500 000$ mark. At this level, a 40 000$ annual spending budget (for a family) represents only 2.67% withdrawal rate. This is a very low spending level, but as the portfolio grows, spending can also grow with the portfolio. And seeing our portfolio grow, even if we are withdrawing from it, is so much conforting when we have that “saver” mentality.

    I would agree this is not the first goal to aim for. It can be pretty discouraging to see a number that large. But when you reach the 1M$ portfolio, this become “only” a 50% increase. So certainly somewhat reachable within a 5-10 years horizon. Why not aim for it when we are already so close ?

    As for the Coast FIRE, as I understand it, it’s not something you can do until you reach that 1M$ mark imo. The portfolio (stock or real estate) is just not working hard enough for you to lay back, yet…

    To finish my comment here today, I would like to quote Charlie Munger : “I never intended to become a billionaire, I was just aiming for FI and I happened to overshoot a little bit.”

    Just a reminder that when you start on your FI journey, you never know where it’s gonna end. :-)

    1. Inflation is a tough one if you’re on the wrong side. Hence why I’ve written that $3 million is the new $1 million.

      Regarding your $1.5 million market, are you speaking from experience? If so, when did you achieve this mark and how did you change your ways for a better life? Did you change jobs or take it easier at work?

      It’s tough to come up with the exact figure for everybody where that feeling of freedom begins. Maybe it’s more a Feeling of hope.


      1. Manuel Campbell

        I am close to it but not reached it yet. I don’t know if this allow me to speak from experience. ;-)

        I retired early 6 years ago with less than 1M$. At that time, I thought it was enough. But after living through the hell of the the last few years, and having nearly doubled my portfolio during that time, I feel that it was not enough anymore. LOL.

        But if I had to do it again, I think this was a little bit too early. Things could have got much more wrong than they did. In that case, I would have been screwed.

        One thing that I realized is the impact of psychology on our financial decisions is greatly impacted when we are inside the “retirement danger zone”. This can lead to suboptimal decisions. Therefore worsening the problem during a “shit-hit-the-fan” event. So, the most options you have, the better.

        I think the 500M$ buffer on top of your 1M$ threshold for FIRE is one way to get out of this “danger zone”. But there is many other ways, like having a side business or other source of income, greater diversification like stocks + real estate + bonds. Eliminate leverage. Another way is to have very low fixed expenses and spend more on discretionary items, this way you have more flexibility cutting costs if there is something bad happening. But not below 40K$ (1M$ portfolio). This is almost has low as it can get.

        I also added two other objectives to have a buffer on top of my buffer :

        1) Having a “emergency fund” of between 6 to 24 months of expenses. This sound silly I didn’t have one before. But it never made sense to me to have cash in a savings account doing nothing while I was paying interests on my borrowings… until the pandemic happened. So, maybe the 2K$-3K$ of investing returns “lost” is worth it after all.

        2) I will always keep a small amount of gold in case something bad happen in the financial system. Probably between 2-5% of my portfolio in physical + stocks. We never know. Better be prepared than sorry.

        Anyway, all of this help me sleep better at night. I am much more confortable now than I was a few month ago.

        1. Gotcha! Close enough. I’m talking about the Minimum amount for people to start feeling the freedom, not The amount. Gotta give people starting off some realistic goals!

          Personally, I think The amount is 20X gross income.

          1. Manuel Campbell

            Exactly. 1M$ to “buy your freedom under certain conditions”. 1.5M$ for “guaranteed freedom for the rest of your life”. :-)

            Most things in finance is about dealing with uncertainty (risk). Something Benjamin Graham called the “Margin of Safety”. That was an concept he developped for investing decisions. But I feel this idea can be applied almost anywhere in finance.

  16. Helpful. As terrible as this sounds (reads), what’s tough recently is it feels like this is all a comparison game, and right now rising tides are lifting all boats. Market was up almost 30%, and everyone benefitted. Then you see Joe next door who made 6m by investing in crypto, and someone else flipping NFTs, etc. I understand that for every one of them, 10 people lost all their money. Especially coming from finance where it was all about comparison, how do you “stay in your lane” mentally?

    1. Who are you comparing yourself to and why? This article is suggesting a minimum investment portfolio amount of $300,000 to start feeling more free. It does not suggest comparison.

  17. Paper Tiger

    I will admit to having a very unhealthy attitude about feeling financially secure. No matter how much we accumulate, I never seem to have that level of satisfaction that financial independence should bring. I have been retired for 7 years but my wife continues to work and contributes significantly to our family income and benefits. As such, we have the ability to continue to save and invest at a fairly aggressive rate.

    I’ve decided I will never feel financially free until my wife retires and we prove that our passive income really does cover all of our financial needs in retirement. Once we have a steady stream of proof that we are doing well without her income safety net to lean on, only then do I feel like I will be able to fully relax and bask in the glory of what she and I have accomplished together over the years we have been married.

    I realize this really is a poor way to think about it but no matter how hard I try to be realistic about how well-positioned we are financially, I just can’t shake these feelings of financial inadequacy. I probably need therapy but I use my time on FS as a good substitute ;)

    1. Ha! Yes, FS is cheaper than the $200+/hour therapy sessions. Glad to help.

      Let me provide you a different point of you. My wife has been retired since 2015. Things were fine because we ran the numbers. But once we had kids, and once the pandemic hit, my inherent drive was to earn more, protect my family, and provide.

      So if I having a wife who is providing income and health insurance, this is a huge benefit. There are actually many male personal finance bloggers who say they are retired while their wives continue to work. So maybe you should follow their lead. Or maybe they can’t feel quite right about that situation, which is why they continue to work so much despite saying they are retired.

      Men are interesting!

      1. Paper Tiger

        We are certainly wired differently for sure! Don’t get me wrong, both my wife and I are happy with our roles. She likes that I am retired and willing to pick up a lot of the slack at home so she can fully focus on her career growth. I’m 4 years older so she still has the energy and passion to keep grinding. It really isn’t about the money anymore for her; it’s about being one of the few women in her company at a VP level and she is trying to help break the glass ceiling and be that mentor/role model that encourages others to follow in her footsteps.

        We are very blessed financially speaking and in many other ways and perhaps I have some guilt for feeling like we received more than others we know. I try and balance these feelings by volunteering and giving back in a number of ways and just want to continue to be a good person and God-honoring through my words and deeds.

  18. I felt FI when I started receiving a pension that pays $3400/mo until I’m 67. At 67, I’ll start taking SS which is projected to pay almost as much per month. My wife and I also have about $1.5 million in retirement accounts that returned about %14 last year.

  19. Noticed your examples are retirement accounts. Pre-tax of course is first funding priority but let’s say things equal would you agree that having that 1M in an after tax account gives more flexibility. My personal example is ~$500k in retirement accounts, ~$1M in after tax investment accounts. Agree with Bill hitting $1M was blah but feeling good about the ratio of pre and post tax to retire at 54 (in 9 years).

  20. Another great article, especially for those starting out. Also appreciate all the 2022 predictions…keep it up!

    I know you primarily traffic in logic and data, but doesn’t the feeling of being free vary greatly based on individual psychology? Benchmarks help, but some perpetually have the one more year syndrome, or who feel they never have enough (scarcity mindset?).

    Accidentally retired 18 months ago and beginning to fear I am falling into the latter. XL says one thing but the anxiety about how much is enough is real. We are a coastal HCOL couple, no kids, (51) and were already at $8M net worth but now past the 8 figure mark recently having inherited share of surviving parent’s 8 figure estate. Part of the anxiety is lower cash flow (due to hit on SF multi-family rental downside and vacancies) despite high real estate valuations. Anxiety about how to invest the inheritance given such high asset values at present.

    Though we are mostly frugal with some key splurges, I don’t feel fully prepared psychologically for the relative wealth we’re in nor the responsibilities. Hard to imagine spending more. Afraid to have kids because of fear of cost, and now, age. Want to invest in the next “chapter” but still living like we’re counting pennies and budgeting in our head all the time.

    Perhaps it takes time to transition. Constantly reminding myself to be grateful and how fortunate we are but feel like we’re in unchartered territory without a psychological road map.

    1. There definitely is a psychological component to wealth. Call me anxiety usually helps when you take more perspective.

      I would think that most people who have a $10 million net worth and who inherited $2 million with cash flow and no children would feel relatively financially comfortable. But only you know how you feel.

      So there must be some type of other issue, such as missing the camaraderie of workers, or having a purpose, or something else at keeps you worried.

      Pinpoint what that is and I think he will feel less anxious going forward. Finding something worthwhile to do is huge!

      Maybe you want to write a guest post about this problem and potential solution.

      1. Appreciate the advice. You’re on the mark as usual. Anxiety is partly acquired from dad who never felt he had enough. He was more stoic and able to take risks (and losses) and overall had more “grit” since he started with nothing.

        The accidental part of retirement is also part of the culprit — didn’t retire to something but from something, so that meant I wasn’t ready. Literally had done no retirement planning when I quit other than a vague sense that I had enough to take time off. Both estates I am the executor of and have a lot of mid-term decisions on how/whether to liquidate in search of greater cash flow, so presently living off partly on savings.

        Finding fulfillment later in life, I”m guessing will take 2+years and some trial and error. But your blog and others have helped me realize how important having a purpose/passion/creative outlet is in life — a W-2 job allows you to punt the question further down the road while you’re spinning.

        Would be thrilled to work on a post but I’ve found there’s tremendous hostility towards people of means, especially those who have inherited wealth. I suspect many folks on personal finance sites are self-made and can be hostile because they can’t relate. Hence, stealth wealth. It’s a shame because I wish I knew how some of my actual peers get by (or don’t…and squander) since no one I know talks about money so honestly and transparently. That’s why FS is so valuable. We get inside your head and how you think…which has served you well, but also teaches others the mindset rather than the technical tips of successful investing.

        1. I would agree that people who inherited wealth vs created wealth would have a different perspective, outlook, investment knowledge etc. We created our wealth (Close to 8 figure NW), but I have no hostility toward those that inherited wealth.

          If you don’t have a lot of experience in the creation of wealth, I would suggest hiring someone that does, especially with the NW that you have. It is difficult to find the “right” person.

          To be honest, I have some of the same anxiety about the future and thoughts about whether there will there be enough money to last. But I think that this kind of anxiety, as long as it is not paralyzing, is normal.

          1. Can you elaborate on the anxiety you feel having an almost $10 million net worth? What are the specific things you are worried about? This is a great topic but I think I can turn into a post. Thanks

          2. Thanks for response/advice. Agree that balance is key and trying to ease into that. Are you retired? I certainly felt zero money anxiety when we were working.

            Our wealth accelerated in our 40s very quickly due to significant career progression combined with the huge gains in equities as well as real estate that we didn’t have a lot of time to absorb/grasp that we were barrelling towards top 1% NW. We were on track and doing okay enough creating wealth before the inherited wealth kicked in. While we certainly earned and created 50% of our own wealth, I know a big part of it is luck and timing. Who didn’t do well this past decade of cheap money???

            I believe the quick timeline of reaching the 8-figure milestone, combined with the robust returns of 2010-present (which “feel” very unsustainable) make it hard to be completely at ease. Also grappling with how much to focus on growth/accumulation of wealth. One one hand I feel we have enough and don’t want to take on more risk, but feel the pressure to not have too much cash/safe assets eroded by inflation. FS obviously feels much more comfortable with real estate for 2022, but I’m kind of already overweight real estate and don’t enjoy the minor headaches that it brings from time to time.

    2. I apologize but the “anxiety” mentioned by this post is silly. If this represents a typical American worry, i fear for countries future. Multi- million net worth but afraid to have a kid!!!! Oh the horror.

      1. It’s hard to deny how someone feels. Everybody has their own issues they have to deal with. And most often it is due to something suboptimal that happened in the past.

      2. @ccjarider…Don’t think our case is typical, but money anxieties are common whatever your level.

        For us, we didn’t know when we were younger that we would end up with multi-million net worth. Living in HCOL area (Manhattan), hustling to get ahead in busy dual-income careers, meant waiting a little while before feeling comfortable. Quite typical. When decided to pull trigger to have a kid at 41 (net worth maybe only $800K then), I was diagnosed with cancer. A year lost to treatments, followed by insecurity about 5-year survival prospects (50%).

        As a gay couple, couldn’t rely on parents as a safety net, like my siblings. Dad did not approve (he paid for all the grandkids’ private school educations in San Fran and stuffed their bank accounts with gifts every year). Yes, these were my choices and circumstances, but sorry you feel the need to call them “silly.”

        1. I find myself with a 5 mill net worth, kids gone, no debt, and do not like what I do for a living, but love the compensation (450k per year). While I don’t “need” it I can’t rationally convince myself to retire. It isn’t really the “scarcity” mindset. I think if I retired I would be fine financially. Just feels stupid to retire. I could work another 8 years till I must retire based on my firm’s business model. That’s alot of dough to leave on the table but also who knows how long health lasts and want to enjoy myself.

  21. Damn Millennial

    What’s up F.S. I like this one and I agree especially if you don’t have dependents you can really maneuver at that level.

    We had our first kid in 2021 and it is a whole new level of deciding what is enough, what’s most important, and how much financial support is necessary to provide to your kids.

    We hit $1 mill outside of primary house this last year at 31 and that really felt like the first time mentally that I felt momentum. On up days when you have a bigger portfolio it is crazy how much it moves compared to income.

    We also have built up our incomes though so at this point I am just planning on keeping the foot on the gas.

    We want two kids. I feel like as a parent I plan on working hard until they are both in elementary school and then reevaluating. It is expensive to have day care in HCOL area.

    When they are a little older I really want the flexibility to have fun with them. Until then we will reward ourselves with vacations and improving our living space.

  22. For me, $500,000 was the amount that gave me the confidence to stop worrying about money. Once I reached this figure, it afforded me the mental freedom to stop working a miserable job and instead switch to working part-time doing work that I love. With $500k, I can live 20+ years without having to work, which is not quite full FIRE, but enough to chase my passions. Notably, this leaves out my spouses savings and our home equity.

    While everyones numbers will be slightly different, I agree that $300,000 is a good starting amount to provide the confidence needed to switch jobs without regrets.

      1. I don’t want to have to draw off her assets if I stop working entirely, as she loves what she does and doesn’t desire to retire anytime soon. Thus, I don’t want to include her savings as assets that can support me at this point. When she reaches the point where she is inclined to stop working, or switch to part-time, then I would count her assets.

  23. Hi Sam, question on the custodial Roth IRAs. I have them for my kids. Interestingly, they were required to pay some federal income tax (their income was negligible, like $5k for the year). I think this may be because I claimed them as dependents, and my marginal tax bracket is around 39%. Do you claim your children as dependents and then file their own taxes separately? I’ll try to do the math with claiming them as dependents vs as not dependents (both are college age now, but fully supported by me).

    1. Oh yeah? What was the federal income tax? A child who has only earned income must file a return only if the total is more than the standard deduction for the year. So I’m surprised.

  24. I remember when I first reached 100,000 I was SO excited. It was a huge accomplishment and it really helped propel my interest in personal finance, investing, and growing my retirement accounts even further.

    I think $300,000 is a great target and agree hitting that milestone is a solid lifestyle improvement. It certainly brings a lot more confidence, satisfaction, and comfort.

    Interesting observation on how you’ve noticed your risk tolerance is more closely associated with your earning power versus age. Makes a lot of sense!

    1. $100,000 is a fantastic milestone. It was a gobsmacking amount back when I was in college in the late 90s. I remember $100K being the price for hitting a half-court shot. I daydreamed what it would be like to have so much!

  25. When I started my investing journey 50k was my first big hurdle. That 50k gave me a better sense of freedom than when I crossed the 7 figure mark. Last year, my investment returns were greater than my first 20 years of contributions. My overall feeling is blah.

    What I’ve learned is that the journey is far better than the destination.

    1. That is a good point about money being much more impactful when you have less of it.

      This is why I starting all over once you have kids is quite exhilarating. Even though contributing $6000 to a Roth IRA doesn’t excite me, if I pretend I’m my son, it does.

      This excitement of starting over as one of the reasons why I decided to give over 500 Uber rides and coach high school tennis for $1000 a month. Starting from square one with so much upside feels great!

  26. FromItalyWithLove

    Hi Sam, thanks for your articles and this website.
    I am just starting off on my financial independence journey.
    I am 34, grew up overseas in a very risk adverse family that thought me the importance of saving. But I have had zero education on investing.
    So for me the challenges I face are how to start and in what I need to invest (and you are contributing very much to this journey!).

    I am close to the 300k you were talking about but I don’t feel free at all. Until I reach that 1M goal I will keep reading your newsletters and posts like the Bible.

    Thanks for everything you do.

    1. Ciao bello! I appreciate your readership.

      I don’t think you feel free yet because you haven’t got to $300,000 yet. But soon! At $300,001, notice the lightness in your step!

      Make sure you enjoy the journey. Because as bill, another comment or sad, is the journey that’s the most fun and rewarding. Once you get to $1 million, I am pretty certain the goal post will change. So you’ve really got to enjoy what you have now.

    2. I have approx $1.2 Million invested in the market, a paid off condo rental ( worth approx 120k) My primary residence is approx $510k with approx 200k left on loan. I also have 2 empty lots on a development
      ( worth approx 40 to 50k) and are expected to continue to go up as development increases. Im 38 years old and do not feel FI. My job is realtively stable. Im not a big spender and have annual expenses of approx 80 to 85k. Should I feel FI or coast fire? I feel like I need $2.5 to 3 Million to feel secure.

  27. Have you written an article about your experiences in the 500 uber rides? i’d like to read that.

  28. Inflation was 6.8% last year. At the Fed’s current pace, inflation may well be even higher in 2022. The “reasonable” 6% target represents negative real growth from 2021 through now. A $300,000 portfolio in 2000 would have had to grow to $484,000 by today just to have the exact same purchasing power. This is something your post glosses over.

    1. I had our accountant crunch numbers using the inflation rate and our tax bracket. We’d need a 12% plus return to make 5% on our investments.

  29. This is a very interesting read. I just hit the 300k mark this year as well as 50k in passive income from real estate per year. I am 36 years old and I am wondering “now what”. I am in a high pressure job that pays well (200-300k) and my wife brings in about 90k a year with great benefits and pension. We do also have two kids which we have been funding their 529s. Our necessary living expenses are 50k a year which the rentals cover. Unless I can find something I love to do I guess I will continue the grind….. Open to suggestions!!!!

    1. Congrats! Now the good times hopefully continue if you invest it in a risk-appropriate way.

      With two kids, I’d continue to grind for as long as possible and continuously build that passive income figure to $100K+.

  30. Achievable. Great place to start. I almost have a net worth of that much, and it feels good. Still working, though. I want to see how this year goes and re-evaluate work!

  31. SamD-wannabe

    For me, I’ve felt ‘lighter’ due partially to my portfolio increasing $1M+ and my cash flow increasing meaningfully from my small business. Went from an after-tax savings rate of 40% to 90% with the creation of a small business in 2020. Not bad for a family of 6 in a HCOL geo.

  32. Ms. Conviviality

    It made me giggle to see your suggestion for a $300,000 investment portfolio since that is the exact goal that I have! I set that goal 1.5 years ago and we’re a third of the way there since we’ve been plowing as much money as we can into index funds. I also saw it as coast FI as long as we have a paid off house and cars. We will also have two cash flowing properties to help us live it up but don’t want to be dependent on the rental income.

      1. Ms. Conviviality

        Thank you, it’s hard to believe that I invested in my first stock at age 36, only five years ago when I discovered your blog. It’s amazing what can happen when one really puts the effort into achieving specific financial goals.

  33. Financial Deviant

    When my portfolio reached $500,000 I felt a certain level of lightness. Finally the years of buying used cars for cash produced a discernible achievement tingle in my soul.

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