Tuesday, July 15, 2008

When Are You Wealthy Enough?

I read this article from Todd at Harvesting Dollars about the stages of wealth accumulation and it made me wonder what my magic number is. How much would my net worth need to be for me to stop working hard to accumulate more?
I think that I would like to have enough passive income to provide me with about $30,000 a year. So I would probably need investments or interest bearing savings of about $900,000 - $1.2 Million. I would also need to own my own house and have no debt. I'm guessing that this will take me about 20 years to accumulate that much more wealth if I play my cards right. So I have a goal of having the option of living off my passive income by the time I am 45. 

Of course, just because I could stop working doesn't mean I would. Who would want to give up writing?

So, I ask you, what is your magic number? How much wealth do you want to accumulate before you are willing to stop working?

1 comment:

Anonymous said...

Great questions and one that is tough to answer quickly. I think it depends on the where you are in life. How many kids do you have, maybe you want more? We have two young kids and it's hard to think of a number needed in savings when we have lot's that can happen between now and college. We have started to save, but I'm not sure it's enough.
I would agree with you about the passive income stream. Earning $30k would help offset a lot of education costs and help with retirement.