Financial Freedom Calculator
Ever wonder how much ‘passive income‘ you need in order to be ‘financially free‘? Passive income is derived from ‘assets‘ that generate cash flow (regular & consistent earnings) from a source other than an employer (a job). This could include rental properties, affiliate marketing, stock dividends and even crypto reward interest. Sophisticated investors invest primarily for passive income. In many cases, they are ‘asset rich and fiat poor‘. Instead of spending their valuable time earning money through work, the allow their investments to generate their income passively. This is how to reach financial freedom sooner!
In order to gain financial freedom and escape the ‘rat race‘, you have to know how much fiat cash you need per year (or month) in order to pay for all of your life expenses (like your mortgage/rent, food, kids, entertainment, debt etc). If you can make enough passive cash flow to cover ALL of these expenses (and more), then you are financially free!
In our Financial Freedom Calculator, if your H | AFTER-TAX PASSIVE INCOME (per month) is GREATER THAN I | AFTER-TAX INCOME REQUIRED (per month), then you have achieved financial freedom! If I is less than B, you have some work to do in order to become financially free.
If you don’t want to enter an ‘initial investment amount’ or ‘annual rate of return’ but know how much passive income you generate (up to 5 sources), please use our Passive Income Calculator.
Are you financially free? Check it out using our Financial Freedom Calculator:
If you don’t earn enough passive income to pay for all of your monthly expenses right now, keep working on generating more positive cash flow through passive income generating assets until you get there!
In order to gain financial freedom, you can work on the following:
- Decrease A > amount of AFTER-TAX INCOME REQUIRED to cover ALL expenses
- Increase B > your INITIAL INVESTMENT whilst keeping the same or higher APY
- Increase C > your average annual RATE OF RETURN (APY)
- Decrease F > reduce your TAX RATE (accounting)