Find Your Freedom Number

[Justin Goodin]

The first step toward building a strong financial plan toward quitting your full time job with confidence is finding your freedom number. This number is the amount of money that would more-than-cover your regular monthly expenses based on your current lifestyle.

This is the amount of income you need to earn passively in order to quit working and still cover all your bills worry-free. You can easily find this value by looking at your expenses from the past six months.

Let’s pretend your expenses for the last six months look like this:

Month 1 - $ 9,500

Month 2 - $ 12,300

Month 3 - $ 8,700

Month 4 - $ 10,800

Month 5 - $ 9,100

Month 6 - $ 9,600

The average of these expenses is $10,000. Now, add a 10% buffer.

Your freedom number in this case is $11,000. This is how much you need to establish in consistent, passive income so you can leave your nine-to-five with confidence.