Five-Minute Win
This week’s Five-Minute Win: Calculate your FI number.
Take your annual spending and multiply it by 25.
That’s it.
If your household spends $60,000 per year, your rough FI number is $1.5 million. Spend $80,000 and it’s $2 million.
Obviously, your actual FI plan can get much more detailed than that. Social Security, pensions, taxes, healthcare, withdrawal strategies, and dozens of other variables can all matter. But that’s not the point of this exercise.
I suspect a surprising number of people interested in financial independence have never actually calculated the number they’re working toward. And even if you did years ago, when was the last time you updated it based on what your life costs today?