How much money do you need?

How much you need to achieve Financial Zen depends on how much you spend. Period.

Your burn rate determines how much passive income you need. 

How much passive income you need determines how much money you need to save.

If you know your spending, the rest is easy.

Just take your annual living expenses and multiply it by 20.

That’s your target Financial Zen Number.

If you spend $15k/mo – $180,000/year – you need $3.6M to achieve Financial Zen.

This corresponds to a 5% withdrawal rate, which some might consider aggressive.

If you’ll sleep better with an even bigger buffer, use 25 as your multiplier. 

(That corresponds with the more commonly accepted 4% withdrawal rate.)

The hardest part is not doing the math.

The hardest part is knowing your spending.

FinTech like your Financial Zen Portal (or Mint or YNAB), can do that for you.

If you’re not already using one of these services, take your best guesstimate and multiply it by 1.2. (People underestimate by an average of 20%.)

The next question is always, “If that’s how much I need, then how soon will I get there?”

But that’s another question for another day.