Calculate How Long It Will Take to Become Financially Independent

For most of us, financial independence is not easy. It takes years when you spend less than you earn. If you are wondering how long it will take for you to reach this stage, try this calculator.

If you are a fan of the popular financial blogger Mr. Money Mustache (MMM), you will appreciate this tool made by fans and readers of his site. MMM discusses the topic of financial independence quite a bit, breaking down both the numbers and the psychology behind it. He’s pretty straightforward about what it takes to get to this stage. For example, in a recent post on early retirement, he wrote:

How can anyone possibly be complaining about money problems while paying tens or hundreds of dollars a month at the same time to have passive entertainment videos and videos streamed to their home? People simultaneously take away money and the time they need for peace of mind, which is a prerequisite for moving forward – developing skills, meeting people, getting a better job, or starting a better business. The average person spends more than 95% of their earnings and burns most of it on necessities that are not really needed.

Like most personal finance blogs, it is all about cutting back and taking the necessary steps to get out of debt, accumulate wealth, and ultimately become financially independent. This happens when the passive income you earn – for example, money from investing – equals or exceeds your baseline costs. In simple terms, this means that you are earning enough passive income that you no longer need to work.

If that resonates with you, check out the Financial Independence Calculator, which will tell you how long it will take you to earn enough passive income for your expenses to be paid without having to work. It’s similar to retirement, but most retirement calculators focus on what you need based on the amount of time you have. This calculator, on the other hand, focuses on how much time you have, depending on what you propose and shoot.

First, you enter your annual expenses and withdrawal rate – the percentage of your home equity that you will receive each year. Then enter your current capital and annual savings. The inflation rate is assumed to be 3% and the interest rate is 7%, but you can change these numbers as well.

From here, the calculator will show you how many years you have left before financial independence. See for yourself using the link below.

Financial independence calculator | Mustache Calc

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