Perfect Pitch FI

It depends on how much you need to live on! So the first step would be to see how much you have spent in the past year, or longer, to get an idea. The 4% rule, states that you can live off of 4% of your invested assets and that you will not run out of money. For example, if you have $1 million invested, each year you can pull out $40,000 without having to touch the principle, on average. Certainly if it’s a down year it’s recommended to not take out as much as 4%, and you can take out a little bit more in good years. Personally, as I am more conservative and risk-averse, so I would not want to pull out more than 3%, especially since I have had to retire early due to my health, and I’m also concerned about inflation and I must admit a little fearful in general. The more typical physician might live on about 100 K a year, (aka FATFIRE) so you would need about $3 to $4 million if you were living off of only invested assets for that. It’s good to take into account any additional income you...

Having a financial plan is important to keep on track. To avoid emotional financial decisions, and a scattered approach to doing what’s trendy at the moment. It doesn’t mean that it cannot be changed if your circumstances change.  But before launching into a plan it’s important to know what your goals for the money is. Money is just a tool that can help you do what you want in  your life. Whether it’s to buy a house, a car, get out of debt, be able to enjoy life without being afraid of spending money (one of my personal issues). or it could be that you want to become financially independent to not have to depend on your job for income. Do you want early financial independence? Do you want to be able to work less or work part time? Do you want passive income so you have your money work for you instead of you working for money? How do we get clarity on our goals? Journaling is a great way to start, by writing down the thoughts we have, often we can get more clarity this way. Tal...