A short and succinct formula to figure out the lifestyle you want and find out how much that costs monthly is:
Assuming your base minimum is $4k/month, this means that you need $48k/year ($4k/month x 12 months).
Based on trinity studies of 4% base withdrawal rate, you will need to take you base yearly target ($48k) divided by 4%, which means you need to accumulate $1.2m either by investing and compounding (this depends on your earn rate, save rate, invest rate and returns-on-investment rate).
Refer to my early retirement case studies.
For some lucky ones, you may inherit money / trust or some may strike lottery, but as this is more based on luck, favor and randomness which is typically out of our control, I do not want to comment on such matters
Notes:
- With a 60/40, 40/60 bond/equity portfolio, there’s a 97.5 chance that if you withdraw 4% annually that the portfolio will perpetually last ie last forever
- If you’re like me, you may want more room for buffer and errors, you can add safety buffers based on % eg additional 10, 20, 30 or more percentages to the amount you need to accumulate.
Where To Next?
- Subscribe to my newsletter – no spam and just my best stuff. Unsubscribe anytime.
- Go to Homepage of nigelchua.com
- If you like videos, head to All Videos – all the latest (and all) videos are uploaded there.
- Visit the Blog to read the latest articles and videos. You can see all / my entire list of previous articles here: Archive
- Head over my Resources page to the products and services I use to improve business, relationships, health and more.
- Contact me if you like to thank me for helping you in some way (please, always tell me – it’s such emails that I truly look forward to), interview me, ask me to try a product, or media inquiries.
- If you like my work and want to support me / my cause by giving a tip / donation or choose to buy stuff at my products and tool page – thank you for your support. You keep me going.