Wednesday, March 24, 2010
Critical Mass
I was been thinking about this today. I will call it critical mass. I actually picked up this term from another blog I read last night:
http://earlyretirementextreme.com/2010/03/money-goals-and-score-keeping.html
Anyways, this is the point where you are making more- or just as much money from your investments each year as you do at your job.
I think of it as a rolling avalanche behind you and it rapidly picks up more speed every year.
I think once you hit this milestone, you can take the short ticket to retirement..its not too far off. At least you can slow down a little. You have this compounding monster behind you growing bigger and bigger.
How much is critical mass?
I think it is $500,000 in investable assets not including your own home.
I am going to include 401k and retirement in this number, though my opinion may change down the road.
If wealth building is your goal, I think one should try to reach this as fast as possible. If one reaches before 40, I think you can retire by 50.
It's like the old saying- the first million is always the hardest. After you have the first million..the second is much easier.
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