Financial Escape Velocity
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The basic calculation for reducing your expenses to become financially independent and Personal Runway Formula
{current savings} / {yearly expenses} = {personal runway}
Financial success is not measured by the number of zeros in your bank account. A millionaire (or even a billionaire) may not be financially successful if they're confined to a role in order to maintain their wealth. You become financially successful when you have full autonomy and independence. Financial independence is the goal. Financial success is found by structuring your life around freedom. You can reach financial success long before you have 7 figures in your account by just being clever with your money. Before you reach unprecedented financial independence, measure your financial escape velocity to know how much effort is required to push you over the line.
Noah Kagan, entrepreneur and founder of AppSumo, popularized a practical concept for aspiring entrepreneurs: the "freedom number." This is the minimum amount of money you need to earn from your side hustle before comfortably quitting your day job. The calculation is refreshingly simple: add up your essential expenses—rent, food, dependent costs—to determine the baseline income your side business must generate consistently. Rather than diving headfirst into entrepreneurship, Kagan advocates for this measured approach that provides a financial safety net while you transition. It's not about waiting until you're wealthy, but ensuring you won't be desperate when you finally make the leap.