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In 1991 Billy and Akaisha Kaderli retired at the age of 38. Now, into their 4th decade of this financially independent lifestyle, they invite you to take advantage of their wisdom and experience.


Financial Exercise for Financial Freedom

Billy and Akaisha Kaderli

Akaisha and Billy in Thailand with a rice paddy behind them

Akaisha and Billy in Thailand with a rice paddy behind them

First things first

Track your spending and determine how much you are spending per year.

Multiply that number by 25.

This is the amount you need in invested assets in order to maintain your spending level and live off your investments.

Invested assets are a portfolio of roughly 60% stock market index funds such as VTI, Vanguard Total Stock Market and 40% bonds/CDís or cash depending on your age and risk tolerance.

Creating a spreadsheet with the following formula

Once you know those numbers create an Excel spreadsheet on your computer.

Enter your invested assets number from above into box A1.

Drop down one box and enter the formula: A1 times 1.08 minus your spending number.

Replicate that formula down the spreadsheet for as many years as you would like.

The 1.08 figure is the approximate amount your portfolio should grow over time. None of us can predict the future so this is the best guesstimate you can use.

You should be surprised with the increasing value of your assets while still maintaining your spending pattern.

For example, if you determine you are spending $40,000 per year, multiplying that by 25 = $1,000,000 Dollars. This is the amount you need invested to maintain your current spending level.

Enter $1,000,000 into the A1 box on your spreadsheet. In A2 enter the formula: A1 times 1.08 minus $40,000.  Your result should be $1,040,000. Continue that formula down the spreadsheet.





Financial options and a practical chart

If the one million dollar figure seems out of reach for you, there are options.

You most likely will be receiving Social Security. You can learn what your estimated benefits will be by going to Once you know the amount of your estimated benefits, you can reduce your spending number by that number. Then recalculate.

Letís say you are going to receive $1500 per month in Social Security benefits - thatís $18,000 per year. Subtract the 18K from 40K  = $22,000. This new figure times 25 = $550,000 needed in invested assets.

Also you may be receiving a pension so the same exercise applies.

This is what we did almost three decades ago and our net worth has increased dramatically even after spending and inflation.

chart of money compounding

Excel chart for the above example

What about inflation or market downturns?

As you can see from the chart above that your $1,000,000 Dollars increased to 2.8 million over a twenty year period after spending.

Granted that inflation can increase your spending over time but as long as you spend 4% or less of your invested assets you should not run out of money and, in fact, grow your portfolio. In this example, 4% of 2.8 million is $112,000 you can spend per year up from the original $40,000.





What happens if the markets tank 50% like they did in 2008? Our recommendation is to have one or two years of cash in reserve equal to your annual spending. That way you are not forced to make a withdrawal when prices are depressed and you can ride out the downturn.

Like we mentioned we have been doing this for over 30 years and have been rewarded for it.

This simple exercise will help you gain control over your finances and place you on the path to financial sustainability.

If we can do it, so can you!

What's Your Number? - How much money do you need to retire?

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About the Authors

Billy and Akaisha Kaderli are recognized retirement experts and internationally published authors on topics of finance, medical tourism and world travel. With the wealth of information they share on their award winning website, they have been helping people achieve their own retirement dreams since 1991. They wrote the popular books, The Adventurerís Guide to Early Retirement and Your Retirement Dream IS Possible available on their website bookstore or on

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