Business: 5 Keys to a Successful Creative Career [Article]
Being creative and making money from your creations are two completely separate things. In this article, Josh Spector walks through a few necessities to turn your creative energy into a sustainable career.
Two that've had the most impact for me:
Money: Enough [Article]
In today's world, it seems like everyone is trying to grow their business, grow their income, and grow their net worth - but... when does it stop?
When do we actually reach enough?
Question of the Week: How much money do I need to stop working?
To figure out your "freedom number" there are many, many things to consider.
I wish it was as easy as a quick calculation, but you need to take into account things like:
After you've thought through your desired lifestyle and taken into account some of the variables, determining an estimated freedom number can be fairly straightforward.
The most common way to calculate it is by using the "4% rule".
The 4% rule states that you can withdraw 4% of your investment portfolio each year without running out of money. By taking the amount of money you'd like to spend each year in retirement and multiplying it by 25, you can determine how much money you'd need to have invested to live off of the returns.
For example, if you wanted to spend $50,000/year, you'd need roughly $1,250,000 according to the rule ($50,000 x 25).
However, as more people have tested this out, they've found that 4% isn't entirely accurate.
4% is a relatively high withdrawal rate and when the rule was created, it was designed for standard retirement age, with the investments only lasting for roughly 30 years. So if you plan to retire early, you're most likely going to need funds for longer than 30 years.
Maybe a more realistic and accurate calculation to use for estimates is a 3% rule or 2% rule.
You'd take the same calculation but instead of multiplying by 25, you'd use either 33 or 50.
So again, if you wanted to spend $50,000/year and used the 3% rule, you'd need about $1,650,000. Using the 2% rule, you'd need $2,500,000 invested.
Aside from manual calculations, there are a lot of awesome tools out there that can help you test different expenses, savings amounts, and lengths of retirement.
For example, this calculator below from Maybe Finance shows you how long certain amounts of investments would last depending on how much you spend and what the annual returns are.
Two Financial Freedom Calculators
FIRE calculator by MoneyUnder30
Overall, finding your true freedom number is a highly personal process. Take some time to consider what you want work-optional life to look like, and then take the necessary steps to make the dream a reality.
I'm going to write a more in-depth post with different scenarios, numbers, and examples on the Creatorbread blog soon and will share here when it's published :)
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