Financial independence means having enough financial resources to meet your living expenses without having to continue work for an income – and that’s the entire object of the game for your financial life. Thanks to the power of compound interest, it’s surprisingly easy to achieve, especially if you start early…
If you save and invest $500 a month for 40 years, you’ll end up with a one-million-dollar fortune.
Compound interest is the single most powerful financial force, and it’s the most important to understand.
What you do—or don’t do—in your 20s and 30s has a tremendously disproportionate effect in determining how financially well off you’ll be in the long run.
Compound interest works for you when you save and invest—and it works against you when you borrow. Borrowing money is the financial, mathematical, and moral opposite of saving and investing it.
The single most important measure of your overall financial condition is called “net worth.”
You should calculate your net worth regularly in order to track your progress and compare it to your goals.
The single most important goal in your financial life—the “object of the game”—is to accumulate enough net worth to achieve financial independence.
You can look rich, or you can become rich—but not both.
How fast you achieve financial independence depends on how much you save each month, and for how long. Check out the various scenarios and zero in on the one that's right for you using this calculator. Put your age, current savings amount, and predicted retirement age into the fields with orange text in the calculator. The white text fields are suggestions from Net Worthy, but you may adjust them to fit your expectations. Finally, the results of these calculations can be seen in the green areas of the calculator.