How Much Money Do You Need To Be Financially Independent?
Do you have enough money or are you depending on jobs and employment for a long, long time? If you are not depending on jobs, then you are financially independent. But you need to have independent income sources that will at least cover your living expenses.
When we say that, the next question we get is always, well, how much money do you need to be financially independent? Well, it depends. But here is how you can see how much money you need in order to be financiallylly independent.
Financial independent - Here’s your goal
If your goal is to have a level of financial independence where you do not need to work, then your net worth should be equal or larger than the expected years left of your life x living expenses.
If you are 50 and expect to live until you are 80, you should have a net worh of 30 times your annual living expenses or more.
In Denmark the living expenses would be around 250.000 kr. a year. So it would be 30 x 250.000 kr. = 7.500.000 kr. for you to be financially independent.
In order to become financially independent you need to create several passive incomes, where you invest money and get a return on investment, so that you do not need to work in order to have an income.
This takes time and requires that you can afford to lose money if your investments does not work out. With this in mind you need to have a higher ROI than what your living expenses are.
Building up passive income takes time and will require that you invest money regularly.
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