The idea behind financial independence is that your passive income — typically through investments — is enough.
But how much is enough? Enough for what?
The typical reaction that many people have to this question is to define “enough” based on their current standard of living.
For example: “Right now, my spouse and I are 27 and 29, with one child, age 2, and we live in San Diego, and our expenses are $5,000 per month. That’s our definition of enough, and as soon as we reach $5k per month in passive income, we’ll be financially independent (FI).”
Hmmm. I don’t think you need to be a master logician to spot the holes in this reasoning.