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:

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.