How much money do you actually need to be able to retire early? Here's a very simple rule of thumb, take whatever monthly income you want to be able to retire off of and multiply it by either 200 or 300.. If you want to have 5 000 per month to retire, that leaves you around three thousand eight hundred dollars after taxes of passive income, which is really awesome. Now, if you wanted that five thousand dollars per month with the rule of 200, you would need one million dollars. The rule of 200 says that you'll earn about a six percent rate of return on your million dollars, and so with the rule of 200.

You have a million dollars invested as long as you're making six percent on your money. You'll get your 5 000 a month and you won't be cutting into that original million dollars. If you make more. That number goes.

This, of course, is when you switch to the enjoyment phase of life, and you go from the grind phase or the income and wealth building phase into the preservation phase and the passive income phase of life.