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 inv...

How long it will take you to amass 25 times your income is based on the percentage of your income you save.

When you save 20 percent of your income, assuming a five percent average annual return, you'll hit 25 times your yearly income in just over 40 years.

You can take advantage of the tax-sheltered retirement accounts like 401(k)s and IRAs.

• If you qualify for a Roth IRA, use it. The Roth IRA will come back to you tax-free when you're older.
• If you contribute to a 401(k) account, at least 5 percent will be matched from your e...

The popular 50/30/20 rule states that you should reserve 50 percent of your budget for essentials like rent and food, 30 percent for discretionary spending, and 20 percent for savings.

But it's not that simple. If you're a high earner, you'd be wise to save a larger percentage of your inco...

Assuming you're in your 20s or 30s and can earn an average investment return of five percent a year, you'll need to save about 20 percent of your income so you can reach financial independence when you're older.

Financial independence means that you can maintain your chosen lifestyle entir...