The Moola Masters Blog

Your guide to financial freedom

What’s Your Financial Freedom Number?

financial freedom Jan 10, 2025
Coffe, pen and a napkin that says

 

If you’ve ever felt uncertain about your financial future, understanding your Financial Freedom Number is the game-changer you need. This number represents the amount of money you need to cover your essential expenses and maintain your desired lifestyle—without relying on a paycheck. Let’s break it down and show you how to calculate yours!

 

1. Financial Freedom Number vs. Mojo Number

At Moola Masters, we use two key numbers to help you achieve financial clarity:

  • Mojo Number: This is your weekly discretionary spending amount after covering expenses and financial goals. It helps you manage day-to-day spending without stress.

  • Financial Freedom Number: This is the total amount of money you need to be financially independent, meaning you can cover all expenses without relying on a paycheck. It's based on your annual expenses and passive income sources.

While your Mojo Number helps you stay on track with daily spending, your Financial Freedom Number is your ultimate goal for achieving long-term independence.

 

2. Why Your Financial Freedom Number Matters

Your Financial Freedom Number acts as your roadmap to financial independence. Knowing this number helps you:

  • Set clear savings and investment goals.

  • Understand how much passive income you need to achieve financial independence.

  • Reduce financial stress by having a clear, actionable plan.

 

3. How to Calculate Your Financial Freedom Number

To determine your number, follow these simple steps:

  1. List Your Essential Monthly Expenses

    • Mortgage/Rent

    • Utilities

    • Groceries

    • Insurance

    • Transportation

  2. Include Discretionary Spending

    • Dining out

    • Travel

    • Entertainment

  3. Account for Savings and Investments

    • Emergency fund contributions

    • Retirement savings

    • Other investment goals

  4. Multiply by 12 for an Annual Estimate

    • This gives you a clearer picture of how much money you need per year.

  5. Factor in Passive Income Sources

    • Consider income from investments, rental properties, or side hustles.

If you need help calculating your Financial Freedom Number, use this Financial Independence Calculator to get started.

 

4. Strategies to Reach Your Financial Freedom Number

Now that you know your number, it’s time to build a plan to achieve it. Here are some effective strategies:

  • Increase Your Savings Rate: Automate your savings and contribute a higher percentage of your income.

  • Invest Wisely: Build a diversified investment portfolio with stocks, index funds, and real estate.

  • Reduce Unnecessary Expenses: Cut back on expenses that don’t align with your long-term goals.

  • Generate Passive Income: Explore rental income, dividend stocks, and online businesses to boost your cash flow.

 

5. How Moola Masters Can Help

At Moola Masters, we specialize in helping people take control of their finances. Our Money Mastery Course walks you through the steps to financial independence, ensuring you hit your Financial Freedom Number faster.

 

6. Take Action Today!

Understanding your Financial Freedom Number is just the beginning. Now, take action! Start tracking your expenses, investing in your future, and creating a strategy to achieve financial independence.

For more personalized coaching, check out our Money Mastery Bootcamp to get expert guidance on reaching your financial goals.

Here’s to achieving financial freedom and Mastering your Moola! 🚀

Empower Yourself with Financial Knowledge

Sign Up for the Moola Masters Newsletter

You're safe with me. I'll never spam you or sell your contact info.