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“Simply cutting cable TV and a few lattes would instantly boost their savings to 15%, allowing them to retire 8 years earlier!! Are cable TV and Starbucks worth having two income earners each work an extra eight years for?“ Money Mustache's blog post about The Shockingly Simple Math Behind Early Retirement, If you eliminated a few unnecessary costs from your monthly budget, you could retire YEARS earlier than if you continued paying for things you don't need, and might not even be using. But keep in mind, the goal isn't to live without these things forever… the goal is to reach financial independence ASAP. Of course, living cheaper generally means fewer luxuries and cheap thrills in life.
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When you clearly identify what your financial constraints are (both big and small), the real magic happens when you start to recognize which ones shouldn't exist in the first place. If you take some time to evaluate what the numbers are telling you, you'll probably start to notice some ongoing costs that can be reduced or eliminated entirely. Originally inspired by Tim Ferriss' monthly expense calculator, the Freedom Calculator is designed to give you some clarity about what your monthly income goal should be.Īnother side benefit of this calculator is that it should cause you to start looking critically at your monthly expenses. In order to deal with issue #1, you'll need a simple financial freedom calculator to help you determine whether you're ready to fire your boss and enjoy your life to the fullest.
#The shockingly simple math to early retirement how to
Learning where and how to generate a passive income (and then taking action).Understanding what your monthly living expenses are.RELATED: The Fast (And Slow) Roadmap for Real Estate InvestorsĪs the chart above implies, there are essentially two issues that need to be dealt with in order to become financially free: When you're earning enough income from sources other than your day job (preferably, from “passive income”) to cover all your monthly living expenses, you've officially crossed into the realm of financial independence. Every real estate investor I know has one common goal.īut what does “financial freedom” mean anyway?