How Much App Income Do I Need To Live Off Of?
This is probably the number one question I get from people looking to invest in apps. First off let me iterate that I am not a financial advisor and this is not financial advice. This is simply the techniques I employ in my own life to achieve financial independence from app income.
Everyone’s ideal situation is different. For some people a $40,000 a year lifestyle is sufficient while for others a $1,000,000 a year lifestyle is what is mandatory. With this is mind there is a bunch of different factors to consider that I am not personally equipped to granularly help you decide.
What I can do however is tell you the strategy that I am implementing in my own life while I build my app empire. A lot of it is inspired by the FIRE investing method. It is broken into a few basic steps:
- Take care of your bills
- Monthly revenue equal to 3 months worth of your existence
- Run successfully for 12 months
Don’t worry I’m going to break it down.
1) Take Care Of Your Bills
First and foremost don’t even start thinking about retiring off of app income if your app revenue isn’t paying your bills. For me the minimum bills I need paid are:
- Utilities (electric/water/trash)
- Student Loans
- Gas/Ride Sharing
If I don’t have all of these things paid for from my app portfolio then I can’t really retire in any sense of the word. This is because these are my necessities and if my necessities are not met then I have to actively go get them, thus trading my time for money, thus working. When I can eat and sleep without worry then it’s on to the next step which is building up the app income.
2) Monthly Revenue Equal To 3 Months Worth Of Your Existence
What I mean by this is besides my bills I also have miscellaneous expenses such as entertainment, contributions to my investment portfolio, eating out, etc. I want to have fun just like everyone else, so in order to retire I have to quantify that and come up with a total monthly figure. Now in order for me to feel comfortable retiring entirely off of my app income, my portfolio needs to make 3x what that total monthly figure is per month. Once again this is what my ideal retirement is, it make not be the same for you. However I know if it dries up, I still can maintain my current lifestyle for 3 months at the minimum. Part of the idea of retirement is the peace of mind and security of knowing your money will not run out and you can live the lifestyle you want to live.
This is where the type of lifestyle I want to live comes into play. I don’t really want much in life $10,000 USD per month. Why? $40,000 a year is equal to $3,333.33 per month. Multiply that by 3 and that comes to 9,999.99 per month (add a penny for kicks and giggles). I need $10K per month and then I won’t have any worries about paying for the things that I want to pay for.
3) Run Successfully For 12 Months
So there was a point in time where I was living completely from app income and it was great however it eventually slowed down and put me in a bind for a period of time because it wasn’t following rule #2. App income can be very variable and as a result you need to build a track record of running your app portfolio successfully before you give everyone at your job the middle finger and quit your job. Enjoy the extra income while you still work for a year….and then quit.
In all seriousness if my portfolio steadily generates app income for a year at these numbers I will have 3 years worth of your lifestyle at the end of those 12 months. With that in mind I know I can actually sit back and maintain my apps.
App Income Is Addictive
It is an amazing cash vehicle that can give you financial freedom. That being said it’s not as easy as just putting out an app and collecting a check. If you are interested in adding apps into your investment portfolio and need some advice on where to get started, schedule a 1 on 1 consultation with me today!