How Does The Financial Freedom Calculator work?

This calculator helps you figure out how long it might take for you to have enough money saved up so that you can live off the money your investments make every year.

To use the calculator, you need to enter a few things:

1. How much money you want to have every year to live on (Desired Annual Income)

2. How much money you already have invested (Current Investments)

3. How much money you plan to invest every month (Monthly Investments)

4. How much money you expect your investments to make every year as a percentage (Expected Annual Return)

The calculator uses these numbers to tell you 2 things:

1. How much money you need invested so that you can live off your investments using the 4% rule (Amount Needed for Desired Income)

2. How long it will take you to save up enough money to reach your goal (Time to Reach Goal)

The calculator uses some basic math to figure out these numbers. It assumes you can live off 4% of your investments every year, and it calculates how your money will grow over time based on your monthly investments and the rate your investments grow.

Keep in mind that this calculator is just a tool to help you make plans, and the actual results might be different because investment returns can change over time.

What is the 4% Rule?

The 4% rule is a calculation that you can use to determine how much you'll need in your investment account to retire. It's called the 4% rule because the idea is that you would sell 4% of your investments each year to live on.

For example, if you have an investment account worth $1,500,000 and decide that you're ready to retire, the 4% rule would allow you to live on $60,000 per year:

4% * $1,500,000 = $60,000

Since the stock market grows at an average rate of 8-10% per year over the long term, the 4% withdrawal rate provides some wiggle room. It accounts for inflation (which historically averages around 2% per year) and ideally enables your portfolio to continue providing income for the rest of your life.

The 25x Rule

If you want to figure out how much you'll need to have in your investment account to give yourself a certain retirement salary, you can use the "multiply by 25" rule.

Simply multiply your desired salary by 25 and you'll get the amount needed to have in your investment account to comfortably withdraw 4% per year.

Example: $60k Salary * 25 = $1,500,000

Imagine this… It’s 2034: 

- You’re debt free 

- You have a huge stock portfolio 

- You have rental properties that pay you monthly.

- You're in the best shape of your life 

- You own 100% of your time 

All thanks to the focus & action you implemented in 2024.

But here's the reality: Maybe you spend too much money eating out every month.

Maybe you've delayed investing for years.

Maybe you've bought a car that's way beyond your budget.

That's okay. We are all human. And mistakes are part of being human.

Your current financial situation doesn't define you.

The key is to learn from our mistakes and keep moving forward. 

The past is in the past. 

Your future doesn't have to be the same.

You CAN change. 

All it takes is a few years of focus to completely transform your life.

One of the hardest part of being a first-generation wealth builder is unlearning all of the bad financial habits that you learned when you were younger.

If you're ready to speed up your learning process, avoid common mistakes, and dive into the stock market with confidence, then tap here to grab all 5 of my Investing guides & resources!