How much money needed for financial independence ?
C = E x Y E = Monthly expense in lakhs. Y = After how many years do you wish to reach financial independence ( min value = 5, max value = 40 ) C = Corpus needed in crores. Examples: If Mr A spends 50k a month and wants to be financially independent after 10 years, then C = 0.5 x 10 = 5cr If Ms B spends 200k a month and wants to be financially independent after 20 years, then C = 2 x 20 = 40cr If Mr C spends 10k a month and wants to be financially independent immediately, then C = 0.1 x 5 = 0.5cr
Assumptions: Individual is between 25-45 years old. Investments returns are around 10%, inflation is around 6%.