How to Calculate Your Financial Freedom Number
Episode Summary
This episode begins with a humorous discussion about how many pairs of underwear to pack for a seven-day trip and transitions into one of Scott’s favorite topics: real estate investing. Scott shares insights on calculating one’s ‘freedom number’ – the number of real estate units needed to achieve financial independence. By breaking down the essentials — such as the personal comfort number, profit margin, and average income per deal —Scott emphasizes the importance of knowing your numbers to reverse-engineer a path to financial freedom. The episode concludes with a reminder to stop guessing and start calculating to ensure a clear path to business success.
Full Episode Notes — How to Calculate Your Freedom Number
You’re packing for a seven-day trip.
How many pairs of underwear are you packing?
There’s no wrong answer—but there is a funny one.
Earlier this year, a trend on social media had people asking this same question before trips. The answers ranged from zero to twenty-one, sparking a lot of laughter (and a few raised eyebrows).
But that simple question got me thinking about business—and specifically, real estate investing.
When I ask investors, “How much do you need to make per month to live comfortably?” the responses are just as varied. Some don’t know. Some guess. Few calculate.
That’s where the freedom number comes in—the specific number of units, deals, or notes you need to reach financial independence.
How I Found My Freedom Number
In my first year as a real estate investor, I didn’t have a clear number either. My only goal was to replace my corporate salary. But when I finally sat down and did the math, I realized I needed exactly 113 units to hit my target. That number changed everything.
How to Find Yours
Here’s how to find yours.
- Figure out your personal comfort number. That’s the amount of money you need to live on—your essentials, not your caviar dreams.
- Figure out your profit margin. What is the percentage you keep after expenses are paid?
- Figure out your average income per deal, note, or unit. Whatever your “unit” is, find the average.
Then divide your comfort number by your profit margin, and divide again by your income per unit. That’s your freedom number—the number of deals or units you need to be free.
Key Takeaway
Stop guessing. Start calculating. The math always works.