Your freedom number

Training 1035 minuteshow much to retire

You are 35 and shoot weddings as a photographer with your partner. Your freedom number is the capital whose income covers your costs. The math is simple: yearly spending times 25.

Training goal: Find your number and the road to it

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Situation

1. A blogger insists: "You need a million to be free, minimum." You two spend $3,000 a month.

Aim for a million, everyone says so
Do the math: $36,000 a year × 25 = $900,000
Base it on income, not spending

2. Your partner notices $600 a month going to subscriptions, food delivery and taxis.

Cut $300 of joyless spending
Cut it all, even the fun
Leave it, it is small stuff

3. You estimate the timeline. You save $1,200 a month and have $40,000 so far.

Wait for income to grow on its own
Raise saving to $1,500 and recount
Put it all in crypto to speed up

4. The $900,000 goal is written down. In 10 years prices will be higher.

Keep $900,000 forever
Bump the goal to $2 million to be safe
Recount the number yearly from spending

What you will learn

Freedom number: yearly spending times 25.
Every $100 of monthly spending adds $30,000 to the goal.
Your savings rate sets the timeline, and the goal gets a yearly recount.

Your real-life step

Add up 3 months of spending, multiply the average month by 12 and then by 25. That is your freedom number.

Questions and answers

How much money do I need to retire?

A common rule: your yearly retirement spending times 25. At $40,000 a year, that is about $1,000,000.

What is a FI number?

The capital whose returns cover your costs without a job. It comes from your spending, not your salary.

How can I reach financial independence faster?

Raise your savings rate and lower fixed costs. Your savings rate affects the timeline more than returns do.

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More trainings in this module

Numbers are illustrative. A game, not financial advice.