If you don't know who you are, the stock market is an expensive place to find out.
This book contains the information, insights, and directions necessary for investors to thrive. But these tools won't help you unless you apply them properly to your own circumstances. This chapter tells you how to do that by estimating some important mileposts on your journey to financial independence. To make your money do more for you, it's first necessary to answer the question "more of what?" This question is trickier than you might think, because it depends on the interplay of several important things that only you can figure out.
To get a good handle on your own circumstances, the most important figure is the income you will need the first year you retire. The word need is critical. Your basic needs — food, clothing, shelter, and medical care — must be met no matter what. We call this figure your base target. You'll also want to compute a second target annual retirement income that would be enough to support your desires for such nonessential things as travel, a second home, and leaving a substantial estate. We call this figure your live-it-up target, because it represents the grander life you want to live.
Once you have determined those two numbers, you can figure out how much retirement income must come from your investments to reach each of these targets. Then you can easily calculate a ballpark figure for how big your portfolio ...