"I sometimes think that the only real purpose of an initial design is to evolve some sort of plan to get one started in an otherwise confusing and complex situation. If so, a design has a value for this reason alone, for as soon as we decide to start doing, we learn how to proceed." - Bill Mollison, Permaculture: A Design Manual
For this exercise, you need to know (or estimate) your:
Annual Cost of Living (COL)
Takehome income (after taxes)
Current savings, including e.g. 401k and pension accounts.
Current Net Worth (NW_current)
Multiply your COL by 30*. That's about how much you need to stop working forever-ish. Call it NW_fi.
Divide the difference between NW_fi and NW_current by your annual savings, and that's how long it'll take you to hit FI.
That figure might be depressing. Hold fast. The next step is to play with the model. Decrement your COL by $10k and now see how far away freedom is. Do it again. And again.
Here, download this spreadsheet and put in your own numbers.
*I should stress that this is not financial advice and the 30x number is a very, very rough figure. Don’t take my word for it. Come up with your own number. The MadFientist is a good place to start getting into the necessary details.
This calc is useful if you’re at the ‘totally bewildered and have no idea where I stand’ phase. It’ll give you a direction to aim in, and a sense of how long the journey might be, and what it’ll take. To get there you’ll have to do a lot more than just multiply one number by another number. That’s on you.
For me, what this calc does is illustrate the magic and power of attaining a very low cost of living. Paired with the insights of polymathy, systems thinking, and the concept of walking backwards on the hedonic treadmill, you’ve got the building blocks of rapid and enduring personal autonomy.