I know,
I have been posting on these forums for a while and it may sound a bit weird that after all that time I ask a question which seems so trivial. I have searched the forums' archives and I have not found a thread addressing this question.
Often FI is defined as having enough money so that one does not have to work anymore. But I struggle with the details...
So let's say that someone has annual expenses totaling 60K, including 40K for mandatory/recurring expenses (shelter, food, transportation, insurances, healthcare, taxes, clothes, home and car repairs...) and 20K for discretionary expenses (including travel, dining out, donations...).
Using the 4% SWR rule, would you consider that person financially independent when his/her portfolio reaches 1M (only enough to cover mandatory expenses) or when it reaches 1.5M? With 1M in the bank that person could theoretically stop working and still pay his bills...
Or do you have a completely different definition for financial independence? I am looking for some kind of consensus here...
I have been posting on these forums for a while and it may sound a bit weird that after all that time I ask a question which seems so trivial. I have searched the forums' archives and I have not found a thread addressing this question.
Often FI is defined as having enough money so that one does not have to work anymore. But I struggle with the details...
So let's say that someone has annual expenses totaling 60K, including 40K for mandatory/recurring expenses (shelter, food, transportation, insurances, healthcare, taxes, clothes, home and car repairs...) and 20K for discretionary expenses (including travel, dining out, donations...).
Using the 4% SWR rule, would you consider that person financially independent when his/her portfolio reaches 1M (only enough to cover mandatory expenses) or when it reaches 1.5M? With 1M in the bank that person could theoretically stop working and still pay his bills...
Or do you have a completely different definition for financial independence? I am looking for some kind of consensus here...