Calculating Your Number
April 25, 2008 – 7:18 amAs a personal finance geek, I’ve read numerous books and articles on how to determine your “number”, meaning the amount of money you need to be able to quit your full time job. The number is a subjective value though, and will indeed differ based on your expectations for retirement.
On a general level, if you’re interested or concerned about your personal finances, chances are your interests lie in one of these big buckets:
- I want to be debt free
- I want to save for retirement
- I want to earn more/save more/spend less (or all 3!)
- I want to save for college
- I want to give more
Of these, retirement is usually the end game or big boy of the list above, primarily because you don’t get a second chance. If you retire and then live longer than expected or burn through your nest egg too quickly there are limited options at that stage in your life. Several of the other big areas of concentration are typically included in retirement planning discussions because they involve the ability to save or invest the funds you have available.
I’m starting a series of posts that will cover how to figure out your number, as well a couple of other posts on related subjects. I hope you’ll check back tomorrow for the first post in this series!
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