J.C.’s Money Blog

Ever since I was a kid and learned that the bank pays you to keep your money there, the idea of living off interest has fascinated me. The concept that you can make just as much money with no risk doing nothing than someone working full time blew my mind.

Carlos Slim is now the richest man in the world, with a net worth of about $60 billion. If he put all his money in a 5% savings account, he would earn $3 billion per year! Thats $8 million per day without lifting a finger and taking no risk. In 14 minutes of sleeping, Carlos Slim can earn my yearly salary with benefits included.

According to wikipedia, the median household income in the US is $48,201, and there are plenty of opportunities to open a savings account with a 5% interest rate. So all you need is $964,020 to live like the median American, except without working!

This number represents financial freedom to me. Having a liquid net worth of about $1 million means you can live a normal lifestyle on your own terms. If you choose to work, then obviously you enjoy your job, because you don’t need the income.

I had planned on working hard at my company and saving a large portion of my income until I reached this goal. I think this would be fine, except that I do not enjoy going to work. My fairly optimistic projects showed I needed to work hard and live a very thrifty life for 15 years to reach my goal of financial freedom.

15 of my best years just aren’t worth sacrificing though.

Here is another post on how to live off interest.