Making Work Optional: Investment Thresholds, Real Estate Insights, and Financial Independence

Key Points

• Work becomes optional when the annual return from your investments equals or exceeds your annual salary, which can be calculated using the inverse of the historical return of your asset class multiplied by your gross annual income.
• Living within your means, avoiding revolving credit card debt, and saving at least 20% of your after-tax income are crucial assumptions in achieving financial freedom.
• Achieving the investment threshold allows you the freedom to change jobs, take a sabbatical, or even retire early without compromising your desired lifestyle.