3 Levels of Financial Independence

Financial Samurai breaks FI into 3 levels. Read the whole article. It’s pretty decent.

Level 1: Budget Financial Independence

If your household income is less than ~$40,000 a year, you are considered lower middle class. If you are happy with living a lower middle class lifestyle, then you would need between $800,000 – $1,600,000 in investable assets returning 2.5% – 5% a year to replicate the $40,000 in gross annual income.

Level 2: Baseline Financial Independence

The median household income in the United States is roughly $60,000. $60,000 is therefore considered a comfortable middle class income for most Americans. Based on a conservative 2.5% – 5% annual return, a household would need investments of between $1,200,000 – $2,400,000 to be considered financially independent.

Level 3: Blockbuster Financial Independence

Individual income of ~$200,000 – $250,000 and a household income of ~$300,000 was the ideal income for maximum happiness. With such income, you can live a comfortable life raising a family of up to four anywhere in the world.

Using the same 2.5% – 5% return figures, one would therefore need $5,000,000 – $10,000,000 per individual and $6,000,000 – $12,000,000 per couple in investable assets to reach Blockbuster Financial Independence. In addition, it is preferable if your home is also paid off.

1 Like

See? My 5M per person budget is right on target. :smile:

5M is the nationwide level. Bay Area level should be 10M per person…

1 Like

Sam was saying $5-10M per adult. Kids are not counted.

1 Like

We should change the fortune list for wuqijun, 15M

Sam is also a new parent. He doesn’t know yet how costly kids can be. I will give him a couple years to come around.

If you retire, kids will be not as expensive. If you spend more time rather than more money on kids, they will be happier and also cost less

Why not? Whatever tickles your fancy… :rofl:

You should thank me for your bump. I was wondering why you are so undervalued in the list

I like being undervalued… so I am condemning you instead of being thankful… :rofl:

I know people who are financially independent but they are dependent of the fear of losing that financial freedom. They are OK, they just can’t let go.

A vicious circle unless you step to the front and call it quits and go living La Vida Loca.

So you have confirmed the 15M number. Congratulations!

:weary: I feel old and poor :crying_cat_face:

1 Like

How so? I didn’t confirm anything… :laughing:

Well, money isn’t everything. At least you have your husband and your favorite nephews sticking around… :rofl:

You have confirmed that 6M is too low. You did not deny 15M at all.

6 m is plenty
Leave the BA and you can live anywhere in the US with $1m plus the cost of a house… Say $300k in the fly over states .
At 65 you have SS Medicare a house and $1m at a 4% draw
Figure 30k SS 40k draw … $70k.per year and a house owned. Plenty anywhere but big coastal cities
If you live in the BA and want to get out of the rat race you can anytime if you have $1m in assets besides your house


Um… I’m sure I didn’t do that… :rofl:

I already got out of the rat race even though I still live in the Bay Area. I can’t move anywhere else because I don’t feel like hiring a property manager to manage my rentals. Why give the fun away to somebody else? :rofl:

1 Like

Indeed and this group of entertainers!

1 Like