Measuring your Progress to Financial Independence / Early Retirement
An important step to take during your investing years is to measure your progress to early retirement. Here is how I go about measuring my progress to financial independence. Financial Independence Formula Net worth - the value of all your investments toward financial independence Annual Spending - the amount of annual spending you will need during financial independence Years of Spending - divide your net worth by your annual spending When your Years of Spending is greater than 25, your are financially independent Why 25 Years of Spending Conventional wisdom is that you should be able to safely withdraw 4% of the value from your portfolio annually....