2246: [Part 2] How I Measure Progress Toward Financial Independence by Craig Stephens

Optimal Finance Daily - Financial Independence and Money Advice

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Investing, Business, Education, Self-improvement

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🗓️ 22 March 2023

⏱️ 12 minutes

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Summary

Craig Stephens of Retire Before Dad talks about how to measure progress toward financial independence. This is part 2 of 2. Episode 2246: [Part 2] How I Measure Progress Toward Financial Independence by Craig Stephens Craig Stephens of Retire Before Dad is a 43-year-old IT professional, investor, and blogger based in the Washington, DC metro area. His primary financial goal is to retire at age 55, one year before his Dad retired. He writes about how to build income streams so you can explore the unusual. His first love is his beautiful wife and three kids. His second love is travel. Combining both in early retirement is the ultimate goal and his primary motivation for financial independence. The original post is located here: https://www.retirebeforedad.com/measure-financial-independence/ Visit Me Online at OLDPodcast.com Interested in advertising on the show? https://www.advertisecast.com/OptimalFinanceDaily Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	This is Optimal Finance Daily, Episode 2246, how I measure progress towards financial
0:06.9	independence, Part 2, by Craig Stevens of Retire Before Dad.com.
0:12.5	And on your host and personal finance enthusiast, Diana Mariam, thanks so much for joining today
0:18.3	as we look to wrap up the article we began yesterday.
0:21.8	If you haven't done so already, be sure to listen to that episode first.
0:26.3	But if you're all caught up, let's get right back into it, and here Part 2 is we continue
0:31.2	optimizing your life.
0:37.2	How I Measure Progress Towards Financial Independence Part 2 by Craig Stevens of Retire Before Dad.com
0:45.8	Start with Annual Spending.
0:48.5	Late last year, I demonstrated how I track annual spending using Excel and its pivot table
0:54.0	functionality.
0:55.8	That method gave me the exact amount our family spent in 2018.
1:01.0	Start with your annual expenses.
1:03.2	In this example, I'm going to use the number 65,000 for annual expenses.
1:08.5	For someone whose annual spending is $65,000, their fine number, based on the math of the
1:14.3	4% rule, would be $1,625,000.
1:20.7	Invested assets or net worth.
1:23.6	Remember, the fine number goal is to build a lump sum of savings and investments or invested
1:29.6	assets equal to the amount.
1:32.4	That's different than net worth.
1:34.6	Some people simply calculate their net worth and use that to measure progress towards financial
1:39.4	independence.
	...

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