The four percent rule - Deepstash

The four percent rule

The four percent rule states that you could withdraw four percent of your principal balance every year and live on this indefinitely. That means you need to save 25 times your annual expenses to become financially independent.

The four percent rule is not perfect. There is no risk-free investment that yields that much today. Sudden inflation could also cause a problem.

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Investing and saving is not the same thing.

The idea is part of this collection:

Upskilling: Preparing For The Future

Learn more about moneyandinvestments with this collection

Identifying the skills needed for the future

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The money you need for early retirement

Based on a series of papers known as the Trinity Studies, you need to save 25-30 times your expected annual expenses to have enough money to last you for the rest of your life.

This multiple is based on the percentage of your investment growth that you would be able to wit...

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