Doing what you love - how much is enough?

Visual DNA was nice but lets get back to the thread of doing what you love. Got comments from both Type 1 and Type 2 - those who took the plunge early and those who are thinking of embarking on doing what they love. This post is for Type 2s ..........

Someone said, 'My dad was a soldier so I could be a farmer. And I'm a farmer so my son can be a poet'.

Doing what you love is easy if unencumbered by the need for earning a livelihood. It's also easy if the definition of livelihood is kept at a basic level.

Very often, this is not the case.

Most of us are from middle class backgrounds with no big inheritance to fall upon. Also, we have our ideas of a good life that include a house, a car, holidays, parties - enjoying life without a care for the wallet.

This necessitates building up a buffer to insure your lifestyle before you embark on doing what you love (unless, as wattman says, you love making money ;-)

So, how much is enough for that buffer??

A bit of financial modelling will tell you that in Singapore, you can get by comfortably with S$7000 a month. In India, the figure is about INR 100,000 a month. I guess, it'll be US$5000 in the US??

For simplicity, I'll stick to Singapore. Assuming, doing what you love will fetch you $2000 a month, you need to get $5000 from investments - translates to $60,000 a year. If you manage your investments well, you can get a return of 6% in Singapore. So you need to build a buffer of $1 million for financial independence.

That's what you gun for. The day you get to $1 million, Stop. This is the day you can start doing what you love, without any worry.

Of course, you can model different scenarios, different rate of returns, different lifestyle needs. The point is that if you're Type 2 and start today, there is a way to doing what you love.

The biggest challenge is stopping when you've made that $1million. Human desires have a way of creeping up on you and money has a way of making the resolve go weak :-).

Thoughts???