The Math Behind Financial Freedom
Financial independence means your passive income covers all your expenses. The traditional rule of thumb is the 4% rule: save 25x your annual expenses, withdraw 4% per year, and your money lasts 30+ years.
But the 4% rule assumes a traditional 60/40 portfolio earning ~7% after inflation. If your investments earn higher returns (like DeFi liquidity provision at 50-200% APR), you need a much smaller nest egg. At 50% annual return, you only need 2x your annual expenses invested to cover your lifestyle.
That changes the game completely. Instead of saving $1.5 million to replace a $60K salary, you might need $120K earning 50% per year. The higher the return on your passive income vehicles, the faster you escape the 9-to-5.
Explore our passive income strategies to find the right mix, or backtest DeFi strategies to see what higher yields look like in practice.