"How much should I save?"

Let's say you want to save enough money so that you don't have to work anymore for the remainder of your life.

Wouldn't that be nice?

If that's your goal, and if you invest your savings well, here's how many years you can expect to have to work:

Savings percentage (of your net income) Years until financial independence 5 66 10 51 15 43 20 37 25 32 30 28 35 25 40 22 45 19 50 17 55 14.5 60 12.5 65 10.5 70 8.5 75 7 80 5.5 85 4 90 Less than three 95 Less than two

(Table and calculations courtesy of Mr. Money Mustache in "The Shockingly Simple Math Behind Early Retirement".)

There are details and assumptions and we can talk about those if you'd like. But the big picture is this:

If you save 50% of your net paycheck every month, you can expect to have to work only 17 years instead of the usual four decades or so.

I mean, work is great: it can give your life purpose, it can make you feel proud, it can be quite social, and it can be your way of contributing to society.

But there might be times in your life when you'd enjoy not having to work. For example, when you and your partner have a baby. Or when a friend invites you on a nine-month backpacking trip. Or perhaps when you need a break after a particularly busy year at your firm.

You might also discover, at some point, that you want to spend the rest of your life doing things that you consider valuable, but that don't make you any money.

So if you're wondering how much to save and you want to be financially free, use the table above.

Yours,

— Peter