Formula for calculating how much you need to never have to earn a salary again
A “financial freedom number” refers to the amount of money you need to never have to work for a salary or a wage again.
To be financially free you need:
An emergency fund (large enough to cover three months’ expenses)
Investments that generate enough to cover your monthly expenses
Ingram spoke about how to determine what amount of money you will need to be financially free.
He suggested starting with your expenses (monthly, annual and periodic), not your income.
Ingram also discussed the “5% rule” and a simple, quick way of determining a rough number - you’ll need about 20 times your annual expenses.
Alternatively, multiply your monthly expenses by 12 and divide it by 0.08.
For more detail, listen to the interview in the audio below.
Get the 10 most-read articles of the week from Bruce Whitfield’s The Money Show, emailed to you every Friday morning:
Bruce Cameron discusses with Bruce Whitfield his new book on securing your retirement, despite corruption and the smashed economy.Read More
There’ll be many opportunities for frontier investors in the coming years, says Absa's Somaya Joshua.Read More
Contributions are likely to rise by twice the rate of inflation, warns Clayton Samsodien (Phoenix Financial Services Group).Read More
The rand was just recently trading at a six-month high. Arabile Gumede interviews Bianca Botes (Peregrine Treasury Solutions).Read More
"It's brilliant! The jokes are actually funny," says Cameron in his review of "Manage Your Money Like a Grownup".Read More
It's haunting; 24 million records have been breached. Refilwe Moloto interviews Manie van Schalkwyk (SA Fraud Prevention Service).Read More
The Money Show’s Bruce Whitfield interviews Kevin Lings, Chief Economist at Stanlib Asset Management.Read More
These are the warning signs to look out for, so you can keep your car in tiptop shape for longer.Read More
The Money Show’s Bruce Whitfield interviews Roy Douglas, CEO at ADvTECH.Read More
The Money Show’s Bruce Whitfield interviews Anthony Leeming, CEO at Sun International Group.Read More