For every $100 you spend each month, you need roughly $30,000 in invested capital to reproduce it without traditional income. (For example, if I decide I want to start a monthly manicure/pedicure habit that costs $100 in perpetuity, this can help contextualize how much that habit would change my net worth goal—increase it by $30,000.)

Wait, how did we get here? Cue the “that escalated quickly” memes.

If you’ve been hanging around this corner of the internet for a little while now, you may be acquainted with some of the “4% rule” research that helps serve as a guidepost for helping us understand how much ca$h money we need to accumulate in order to be “financially independent.” This is the magical threshold that—once crossed—means you’re technically able to live off your investment income and no longer need to Holla for a Dolla (read: work) anymore.

I imagine financial independence is a little bit like Wonka’s chocolate factory. Candy-coated withdrawals await! Dividend-flavored bubble gum!

Until we reach that point, though, it’s helpful to use the research and guidelines to contextualize our spending as a portion of the amount of money we need to invest to be free.

Keep reading to learn how to transform your spending into an accurate net worth goal.

I sold my car in March 2021 and have (mostly) never looked back, but we’ve been dabbling with the idea of getting a new car this year. My husband commutes 50 miles to work every day and his paid-off, 2008 SUV has been racking up gas bills in the $600–$700 range each month, which is—spoiler alert—more than my former car payment and insurance combined.

Unfortunately, 2022 is…not a great time to buy a vehicle, as anyone who’s perused the used car market knows.

It inspired this episode in which we break down the lease vs. buy decision in today’s car market and discuss the merits of being a one-car family.

As part of the episode, I wanted to do an IRL lease vs. buy comparison with a luxury car—so I reached out to a Porsche dealership to pull numbers on a 2023 Macan. What I wasn’t expecting as part of my number-crunching journey: being immediately plunged into an inferior sense of class consciousness as a result of the interaction. That’s…a fun bonus in the episode.

Listen now on your favorite podcast player or catch the episode on YouTube!

P.S. If you have questions during the episode, you can leave them as comments on the video.

Crazy Rich Asians. In keeping with my fiction trend, I’m throwing it back to an oldie but goodie. Crazy Rich Asians is my go-to plane movie, but I had never read the book. I had no idea it was a trilogy!

The Wealth Planner. May I plug my own product as a Fun Find? My net worth update this month in the Planner was actually a little fun, since stocks finished up in July. Have you filled out your July numbers yet?

For the savers: Caribou cares about finding you the most affordable rate for your car loan—they could help you save $100** on your monthly car payment. Find out how.*

^{*This is sponsored advertising content.}

I feel like I've been looking at my own consumption habits with fresh eyes ever since I started reading Money Diaries and listening to the Choose FI podcast.

Money Diaries features (mostly) traditional financial advice. Stuff you’d hear from your friendly neighborhood personal finance gal or guy—the guidelines that are considered normal in United States personal finance culture. Save 20% of your take-home pay, contribute to your 401(k) up to the match…we’ve all heard this stuff before.

Choose FI takes this stuff and turns it up to 11.

FI, or financial independence, is a school of thought that encourages people to save as aggressively as possible so they can retire early—like, “35 years old” early.

In a very, very simplified nutshell, it all basically hinges on the 4% rule.

If you can determine how much money you spend every year, you can do this math equation to figure out how much money you’d need invested for your money to auto-replenish itself with interest for the rest of your life as long as you’re only spending 4% of it annually (assuming it’s growing at 8% before average 3% inflation to give a bit of a cushion).

I did mine earlier this week. If I’m perfectly “on budget,” I spend $30,600 per year. So if the calculation is (your annual spend) multiplied by 25, then ($30,600) * 25 = $765,000.

Theoretically, as soon as I can save $765,000 in a portfolio growing at an average of 8% annually, I can stop working and maintain my same spending habits annually. No problem, right?!

Well…keep reading to learn where cars come into the equation.