Your Freedom Number Is Overrated

Your Freedom Number Is Overrated
As you advance in your career and grow in financial stability there are several milestones you hit. Your first expensive purchase, the moment you stop living paycheck to paycheck, becoming financially independent and ultimately retirement. In order to reach the first two, passive income is helpful but for the last two it is mandatory.
Some people are able to reach this early in life by investing in multifamily real estate. But what does it really mean to be financially free? For some people it is a number. But, is that the right goal to pursue?
What Is a Freedom Number?
Everyone has one. A freedom number is the number of dollars of income you would need on a monthly basis in order to be financially free. For some people this is a 4-digit number, for others it may be a 5 or even 6-digit number.
Why such a big difference? It is based on your monthly expenses. In theory, if you have enough passive income to cover all of your fixed expenses you are free to spend your remaining income however you please. You’re financially free. Hitting this freedom number may free you from having to spend additional hours toiling at work, or from having to work all together. For some this is the key to early retirement.
"For some this is the key to early retirement."
Why Should You Have a Freedom Number
Having a freedom number gives you a concrete goal to work towards. You can then work your way backwards from that number to create a plan for how you will reach it. Depending on how soon you need to reach it you may invest in income producing assets such as multifamily real estate, stocks or bonds.
How do you calculate your freedom number? If your monthly expenses (car payments, utility bills, mortgage payments, groceries etc) average out to $5000 then your freedom number is $5000 per month.
How do you reach your freedom number? You would reason that you need 5 investments that make $1000/month or 10 investments that make $500/month. This is the freedom number where you have peace of mind that no matter what you do your bills will be paid. If you add one investment per year to your portfolio that generates $1000/month, you would hit your freedom number and be financially free in 5 years.
What is missing in your Freedom Number?