In our travels around the country we continue to encounter people who do not know how much money it will take to live when their income has stopped. There is a moment when you will not be able to work, or when your value in the market has dropped significantly. At that moment, you will be forced to live off your investments. The fundamental question for everyone is how much money will be required at that moment.
This spreadsheet is designed to help you think about the bare minimum you will need to live at the moment your career stops. Fill in the blanks for yourself. We will help you gross it up for taxes and then multiply it out to produce the capital at work savings in cash, stocks and bonds – not your home equity value) required for you to produce the equivalent income. You will then need to make this age appropriate, and we link you to The Aji Network section called, “Track Your Numbers” to see how much you will need when you stop working.
It is in our experience that people quickly come to around $80,000 per year before taxes as a basic need to cover their core expenses. This means they will need to have $115,000 in annual income, which is $2,875,000 in capital at work in today’s dollars. However, don’t go on our numbers. Do the work for yourself. Most people have not done this exercise. You will end up with a gap that needs to be taken care of. We offer help to increase revenue and income. It’s something we have done for 20 years and produce 80% plus increases in income in the first 2 years of study.