Every retirement calculator on the internet will tell you the same thing…
To spend $60,000 a year, you need $1.5 million invested.
That number comes from the 4% rule, which is the closest thing retirement planning has to a commandment.
The idea is simple, you can pull about 4% of your portfolio out each year, adjust it for inflation, and the money should last you thirty years.
But take out more than that and the math starts eating itself.
So the calculator does the division. $60,000 divided by 0.04. And it spits out $1.5 million.
Then it moves on with its day, and you're left staring at a number you feel like you may never hit.
But here's what almost nobody does with that rule…
They never run it backwards.
Because if 4% of your portfolio is what you can safely spend each year, then the reverse is also true.
Every $1 of annual income you produce from somewhere else is $25 you don't need to have saved.
$1,000 a year of income? That's $25,000 you never have to accumulate.
$5,000 a year? $125,000.
$20,000 a year in extra income? You now need half a million dollars LESS in your account
So let’s take the $60,000-a-year retirement again.
Without any income, you need $1.5 million.
But if you're pulling $20,000 a year from somewhere else, your portfolio only has to cover $40,000.
And $40,000 divided by 0.04 is $1,000,000
So with a simple side hustle, you just shaved half a million dollars from your retirement target.
Now let me give you the number that matters…
At the beginning of this year we polled Options Cashflow Accelerator students
And our median student earns an extra $2,360 a month with what we teach them.
That's $28,320 a year.
Run it through the same math. $28,320 divided by 0.04.
Comes out to $708,000.
Meaning that the income an average OCA member generates does the same job as an extra $708,000 sitting in their account.
And I've watched people spend years grinding an extra few percent out of their savings rate to get somewhere near that figure.
All those years sacrificing time with their family… and putting off life… and yet the whole time, the other lever was sitting right there.
Ivy turns two next week… and I'd like to be around for a lot of her life rather than at a desk earning the last $708,000 of a number an online calculator gave me.
Options Cashflow Accelerator is how our members are producing that income…
Oliver