Most men have never calculated it. Not because it is difficult; it takes about two minutes. Because nobody ever suggested it was the number that mattered.
This gives you two figures: how many months of freedom you currently own, and the capital it would take to stop needing the answer.
Six questions. No statements to pull, nothing to install, no payment.
Your liquid capital divided by what your life costs each month. If everything stopped tomorrow, this is how long the structure holds before it starts coming apart. Most men who run it are surprised, and rarely upward.
The capital required to fund your life permanently at a four percent withdrawal rate. Not a target somebody set for you: your own cost of living, multiplied out. Everything you build from here is measured against it.
I spent fifteen working years measuring my progress by my income. It rose steadily, and it told me a story that had almost nothing to do with my actual position.
Income tells you how the year went. It tells you nothing about whether you are free.
I was thirty-nine when I finally sat down and asked the obvious question: if I stopped working tomorrow, and nothing else changed, how long could I sustain my life? The answer was four months. Fifteen years of skilled work, good years, careful years, and I could purchase four months with all of it.
What shocked me was not the size of the number. It was that I had never thought to ask.
Edmond Favre, Geneva
What your assets produce each year must exceed what your life costs each year.
That is the whole of it. A child could verify it. There are two ways to satisfy it: raise the left side, or lower the right side. Most men spend forty years doing neither, while working extremely hard.
Six questions, rough figures, two minutes. You will know where you stand by the end of it.
Calculate your numberNot here for the arithmetic? The book