Freedom 48: The journey to financial freedom

My Freedom 48 retirement destination

I’ve always wanted to retire as early as I can, by that I mean I will have the freedom to choose what I want to do once I’ve achieved financial freedom. However, I’ve rarely given any thoughts to a fundamental question, “How much will I really need to be worth on the day that I can say with confidence that I no longer need to actively work for money?” Until recently, when I decided to document my Million Dollar Journey, I got the answer that question by setting a goal to grow my net worth to $2M within the next decade. When I achieve this financial goal, I will reach my personal financial freedom at the age of 48. From that point on, Freedom 48 was born and a new journey began. I will summarize my Freedom 48 goal below using the S.M.A.R.T goal model and start to map the road to my journey.

Specific – checked

  • My goal is to build a net worth of $2M and retire once I achieve that mark

Measurable – checked

  • My current net worth is about $1.1M and that took about 10 years to build
  • For the next 10 years, I’ll have to increase my net worth by an average of $90K per year

Achievable – checked

  • Based on the history of the last 10 year’s growth in net worth, my average growth was about $100K per year, so my new goal is definitely achievable
  • Another factor that will work in my favour is that I have more income stream now then ten years ago

Realistic – checked

  • I went from a net worth of – $30K to more than $1.1M. Now, all I have to do is just increase it by another $900K in a similar time frame. For sure I am not dreaming in lala land

Timely – checked

  • Ten years time may seem a bit long given the rate of growth of my net worth for the last five years. However, I need to take into account that I may not have positive returns every year. So the ten years time frame gives me some room for error and time to recover from down years. I am aiming to have 7-to-8 years of positive growth and 2-to-3 years of negative to no growth.

Annual saving goals (+ $31,000 to my net worth)

  • $15,000 in RRSP contributions per year
  • $11,000 in TFSA contributions per year
  • $5,000 in RESP contributions per year

Free money (+ $6,350 to my net worth)

  • $1,000 from the government in matching grants when I contribute $5,000 to my kids’ RESP account
  • $5,000 from my annual tax refund when I file my previous year’s income tax
  • $350 in cash back from my credit cards

Investment gain required (+ $52,650 to my net worth)

  • The total from my savings and free money is about $37,350 per year
  • Since I only need about $90,000 per year, the remaining gain from my investment is about $52,650 (=$90,000 – $37,350)
  • I’ll only need to achieve about 4.8% (=52,650/1,100,000) per year from current assets (what a coincidence, to retire at 48, I need to make 4.8% from my investments)

Notable Mentions

  • I should take into account that the principles of my mortgage are being paid down at an average rate of $1,000 per month. But, I am not. This will also give me more wiggle room to achieve my saving and investment goals
  • I also did not account for any appreciation in the value of the properties that I own
  • I’ve never considered the Canadian Pension Plan (CPP) and my employer’s Pension plan for my retirement (I think the baby boomers will consume everything). These benefits will be icing on the cake. If I get more, then great. Otherwise, I am not counting on these benefits for my retirement at all
  • So far, I did not include any income potential from my blog at all. However, if I can generate even a few thousands income per year, I’ll be on my way to an earlier retirement

Why did I set $2M as my retirement goal?
Because $2M sounds better than $1M. Just joking. If you look at my investment gain section, I will have to achieve an average return of about 4.8% in annual return per year to reach my retire goal. This means I can definitely achieve that same feat for another 10 more years or so. In my retirement, I’d like to have an income of about $100K per year. 4.8% return on $2M is equivalent to $96K per year, so I am only off by $4,000. I can more than makeup for this shortfall by getting one client for my real estate business per year (very doable). 2026, I look forward to seeing you.


The journey to Freedom 48
Starting from 2017, I will share the progress of my next journey with you on a quarterly basis. Even though this journey has just begun, I am feeling more energized and motivated to achieve this a goal than any other time in my life. It’s like I am running a marathon and I can see the finish line on the horizon. It’s far, but I can definitely see it.


What do you think of my goal? Realistic? Achievable? Have your say in the comment section below.

Leo T. Ly, Canadian Personal Finance Blogger/Enthusiast and a Realtor Living in the Markam, Ontario, CanadaAbout Leo
I am a Canadian personal finance blogger/enthusiast and a Realtor living in Markham, Ontario, Canada. I built a net worth of a million dollars over a ten year period. I did it by being a disciplined saver, taking advantage of income tax rules and borrowing money to invest rather than for consumption. I am often excited to take advantage of free money from employers and governments in addition to building more passive income sources. After accumulating my first million dollars, I am now embarking on a second journey towards achieving financial independence. On this journey, I will strive to increase my net worth to two million dollars and retire by the age of 48 - Freedom 48. Come along and follow my journey on Facebook, Twitter, Pinterest or Google Plus.

There are 6 opinions expressed on this post.

  1. Your goal seems reasonably realistic considering that you built a $1.1M net worth over a ten year period with a low salary to start with and now you are in a higher income level and only having to build another $900k. I am looking forward to follow your next journey.

    1. I hope that it’s conservative enough that it leaves me some room for error. I am pretty sure that there will be a bump or two on this journey. Thanks for contributing to my blog and I will definitely looking forward to share the journey with you.

  2. Freedom 48. That’s 17 full years ahead of quite a lot of people. Hopefully, the stock market will be kind for the next couple of years. I think reaching the $2M is achievable if we don’t have a few more of those years with more than 10% losses.

    1. I think that there will be a year or two with a -10% return for the market. That had been factored into my plan. I just hope that we don’t have too many of those years. Otherwise it may be Freedom 50+ for me.

  3. I don’t understand your income built off 2mm net worth. Are you including your home in the 2mm? If so, you’re not going to be generating passive income from your home so essentially you’re only earning returns off 1mm?

    1. @Adam, I love it when my readers scrutinize my numbers and ask great questions. Yes, I do include my home in my net worth. If you take a look at my net worth review, I do have assets of more than $2M right now, that’s because I borrow the equity from my house and invest. If my net worth is at $2M, I will most likely have about $3M in assets working for me. So essentially, I will have $2M working for me if I minus my debts.

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