One of the most common questions I get asked is how to know when it is financially okay for someone to ‘early retire’ from their W2 job. I recommend an approach that uses both the traditional FIRE chart in combination with passive cash flow.
For instance, if you have investments that generate $5k/month, but your monthly expenses are $8k/month, you can use the chart below to determine that you need an additional $1mil in savings to draw down the extra needed $3k/month.
Once you’ve reached that savings goal, your passive income + drawdowns should cover your expenses and you are FREE TO RETIRE!
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