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The mathematics of financial freedom

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Tags: financial-mathematicsfinancial-freedom-mathematics

I provide the equation that determines an individuals path to financial freedom. In this video, I present the formula, explain it using an example and then show how to derive the formula. We see how an individuals financial data all combine to inform when you can stop working and let your wealth sustain you. I note this is an idealised financial model — it assumes constant growth rates and inflation-adjusted spending — but it provides a powerful framework for answering key questions like: -How much earlier can you retire if you cut spending? -What impact does investing more have on your financial freedom age? -Can you afford to work less?

Analytics

4.88 Overall score*

124 Rank

7 Votes

5 Comments

Comments

This is a pretty straightforward explainer without much mathematical insight, but it was an interesting and relevant topic I haven’t heard much about before. The video was well-presented and clear. Nice job!

The absolute minimum any video must have in my opinion is stereo audio. When I open a video and there’s only sound in my left ear, it basically becomes unwatchable. It causes phantom-like tinnitus in my ears. A video can visually be the best one I’ve ever seen, but if the audio is messed up like this all of that is rendered useless.

Luckily for you, I have a browser extension that allows me to re-pan the audio to the center, but as I viewer and listener I should not have to do this.

As for the math and video itself, I can totally see how this can e.g. help me out personally. This kind of math is very useful and shows that math doesn’t always need to solve theoretical problems, but can also help with real life problems. If it wasn’t for the audio issue, this video would have been slightly better than the average video I’ve watched here.

Currently, my financial freedom age would be somewhen around ∞ years old. (sad noises)

Goo an simple - but fix your audio!

4.8

The presentation was pretty idealized, of course on purpose, and the animation was not really that engaging. To make it more catchy and appealing, the presenter could have used more graphical elements. Secondly, a hint at what is missing (ie, stochastic markets, variable interest rates, maybe some behavioural finance (risk aversion, regret minimisation, etc)) so that the viewer is enticed to learn more.

6.4

I appreciate the statement of the original assumptions and questions at the conclusion of the video which consider different hypotheticals that describe when this formula applies. I would love to see more exploration of the formula. The audio only in the left ear most of the time, which is a little disorienting. Very clear video that fulfilled the creator’s vision. In time, I can see the video quality improving fast.