If I ask you how much money do you need to live comfortably and quit your job, what would your answer be? I would definitely have to give this some serious thought!
Quit your job?
I think that is something almost everyone has thought of at one time or another.
How many people actually do it? Is it something they should have done?
If you want to quit your job you may need to do a little or a lot of research before you make this decision. I can think of many reasons to quit a job, but none are as important as money.
In regards to money and quitting your job, we are basically talking about 3 things here.
1. Lower expenses.
2. Have some savings.
3. Generate income.
I do think this requires a lot of thinking about so you do not make a big mistake. So research becomes very important first.
This statement is especially true if you want to live comfortably without any unnecessary financial worries. Fortunately, there is quite a bit of information online that can assist you in reaching the best choice for you.
However, because the finances of each individual can differ greatly, you will probably end up with a ballpark answer for a response. This is because there is normally a wide gap between people who have a lot of money already, and those simply want to simply live a very comfortable life when they quit their jobs for good.
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How Much Money Do You Need?
With this in mind here are some basic keys to figuring out how much money will be needed when you get ready to make your exit.
#1. 6 months. If you are quitting your job to travel the world, or for any other short-term basis, and then return to the workforce at a later date, you may think about saving enough money to last you for about 6 months.
Some professionals in the financial industry recommend about 6 months of expenses to keep from making a reckless decision. This should be liquid money you can get quickly if you need it.
#2. Start your own business. If you are quitting your job to start a new business for your new career, the calculation of your finances may be quite different. So, it is very important that you pay close attention to what you will need in order to be successful.
With this decision, you must take several things into account. Especially, because the calculation for living comfortably encompasses a two-fold objective.
For instance, you need enough money saved up to support your business and your personal living lifestyle too. So, it is important that you have double the savings to get through these times. Again, many professionals recommend having enough to cover at least 6 months or more.
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#3. Out of the workforce. If you are quitting your job, but do not want to return to the workforce ever again, you will need to make sure that you are covered financially for your lifetime. In this scenario, you need to consider finances that will come from a wide variety of different credible resources.
For most people in this position, you are usually thinking about starting a diverse portfolio to support your style of living after retirement. This can come from making sure that you have a big sum of money coming from your retirement pension, your social security, CDs, stocks, bonds, and any other investment products that you can gain access to today.
In fact, it is even important to note that there are investment clubs you can enjoy that focus solely on helping to increase and protect your wealth too. So, if you want to live comfortably and financially secure, you will need enough saved up for emergencies, while also generating more from investments coming in.
Typically, however, for the average person that quits their job, you will need at least 70% to 90% of your present annual income through your pension, savings, and your Social Security.
Lower Bills and Start an Online Business
I want to list this last in my article because I think this applies to a lot of readers of my blog. I think many of us would love to quit our jobs and start an online business, but expenses, as well as income, may play a role in preventing us from doing that.
Lowering your bills is a personal decision that you need to honestly evaluate. If you were to start an online business today what could you live without that you presently are spending money on? What are the absolute necessities that you need money for regardless of where it’s coming from?
Could you live without that stop at Starbucks every morning if you can make your own coffee at home and take the 330-second commute to your home office?
Is there equity in your home you could tap by refinancing your home mortgage at a lower rate? Doing this could not only lower your monthly payment, but it could give you some cash for breathing room as you build your online business.
One of the things about starting an online business is how very little money you need upfront. In reality, you could start a niche blog and use affiliate marketing to generate income for as low as $100 or less.
You could even buy an existing online business at Flippa.com and know what your income will be from day 1. Millions of dollars in website sales are done there every month.
Final thoughts on how much Money do You Need to Retire Comfortably?
It is important that you consider a variety of factors and situations before making this financial decision. Each of us will be different in how we arrive at a positive conclusion.
I think you should have at least 6 months of income socked away where you can quickly get it if you need it. I also think you need to know exactly where you can really lower your monthly expenses.
Attacking your goal with these 2 things in mind will help you move closer to quitting your job while still living comfortably.
My approach has worked for me, and it could work for you if you follow this simple layout and put it into action, and work on it until you achieve it.
1. Start a part-time home business.
2. Commit yourself to one year to study this business and set goals
3. Set your initial goal to reach half of your salary within that year.
4. Set another goal to reach your full-time income in your second year.
5. Set your third goal to double your full-time income in your third year.
Decide whether you want to quit your job or have fun taunting with your employers! LOL… Rather not, but would it be fun? LOL!
Leave in peace, wish others the best and throw a Big Retirement Party!
PS: No credit card needed!
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