When the income generated by your assets is able to cover your cost of living, you are wealth-free. In other words, the money that your assets "generate" for you every month can meet your monthly living expenses, even if you quit your job now, you will not have to worry about food and clothing in the future.
Financial freedom can be divided into three stages. The first stage is the "financial security" phase. It is necessary to set aside a minimum living allowance for half a year to one year. This part of the funds must be in a safe and readily accessible state. For example, the monthly expenditure of the whole family is 10,000 yuan, so at least 120,000 yuan should be prepared every year to put in the currency**.
The second stage of financial freedom is the "financial security" stage. Financial security is about surviving when a crisis arises, and financial security is about keeping us alive. It is generally believed in the international community that putting money in ** and withdrawing 4% from it every year can basically ensure that the ** account will not be exhausted for a long time. Therefore, if you want to live with a monthly expenditure of 10,000 yuan, 3 million yuan is enough. The calculation formula is: 120,000 4% = 3 million. Invest this money in ** and take out 4% (that is, 120,000) from the ** account every year, which is enough to cover daily expenses.
The third stage of financial freedom is true financial freedom. If you want to live a life with monthly expenses of more than 50,000 yuan, it is enough to have 15 million. Therefore, don't think that assets over 100 million are considered wealth freedom, and you don't need so much money at all. When you are young, you can accumulate more original capital, learn correct investment and financial management skills, increase your income, reduce your desires, and achieve financial freedom.