Freedom Number

[Lysa T.]

Hi everyone! Today I was listening to a couple podcasts and I kept hearing about the concept of the "freedom number". I tried to search Google on the topic and I got a lot of irrelevant links. I would like more information on this concept so I can determine my number for financial freedom. My goal is to determine the number of rental properties I'll need to acquire in order to quit my job.

Thank you in advance.

[Dawn Anastasi]

I did it a different way.  I made a spreadsheet and listed out ALL my expenses. This included any annual expenses such as car registration, insurance, etc.  Also you need to take into account any expenses your employer currently covers for you through your job like taxes and health insurance.  Also look at how much you budget for "fun stuff" such as vacations, dining out, etc.  (Or where you'd ideally like to be.)

That's your "number".

Then I made another list with how much rental income I was bringing in.  I compared the income to the expenses, and watched as the income number grew.  Initially when I bought my first rental property, I thought "how cool would it be if I could 'retire' in 10 years?"  Then I wound up leaving my job after just 4 years.  It was both a scary and exciting experience at the same time.

Having that goal in mind really helps!