TikTok financial influencer Vincent Chan described the so-called “freedom number” in a video on his channel, a number you need to know and have if you’ve grown tired of your day job and want to live off your wealth.
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Chan explained to viewers that this figure is “how much money you need to have invested so you never have to work a day in your life any more because you can live off of your investment income.”
Much like fellow financial influencer Ramit Sethi described in his video “Why Everything SkyRockets After $10K,” Chan, too has a special number that can help you find a path to wealth on your own terms and income level.
Here are three steps to find out what the magic “freedom number” is and how you can attain it, according to Chan.
Calculate Your Cost of Living
Chan recommended that anyone looking to find their magic number start by calculating their total monthly expenses to get a sense of how much money they need to live off of. This includes both essential expenses, such as food, transportation, and housing, as well as non-essential expenses, like entertainment and vacations. Add it all up for the month, then do this next.
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Multiply That Number By 12
Account for that number, but 12 times, since there are 12 months in a year. That is now the number you need to cover all of your annual living expenses. Double check that there aren’t some yearly fees you pay on things like credit cards or subscriptions that might come around only one time every 365 days and add that to your annual total.
Divide By 0.047
This figure might seem like a magic number in and of itself, but Chan noted that when you divide your annual expenses by 0.047, you are figuring out how much money you need to invest to do, in Chan’s words: “What you want, when you want.”
Chan admitted that it won’t be easy, but with hard work and diligence, you can get there, just try not to overcomplicate the process for yourself.
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This article originally appeared on GOBankingRates.com: Know This Number If You Want To Quit Your Job, According to Vincent Chan
