The 3X Investing Rule Before You Quit Your Job

When I quit my job I was already making the exact amount I made from my business and the only reason I didn’t end up failing was because I was living with my mom, so my expenses went down when I quit my job.

But that’s not the case for most of us, we no longer live with our parents and if you do, then take full advantage. But in this video, I’ll tell you about the 3x rule before you quit your job, the simple idea is to have 3x times your income coming in before you quit.

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Basic idea: the 3x rule basically tell you, that before you quit your job, your business or passive income strategy your’ll make you 3 times what you make today or atleast the figure shown below.

1X for Survival

I have a budget called the baseline budget.

And The idea is very simple

How much money do you need to survive)

Here are the main 4 expenses:

Shelter

Utilities

Groceries

Trasnportation

The truth:

Everything outside of this is a want, you don’t really need it

So the idea is right now down the figures and that’s how you know what your baseline budget is

Eventually you can word on increase your income to have more money for more stuff ( but this budget helps you quit your job faster )

Because you need less money

For example: if you make 4k

But you can live on 2k

Then that’s awesome

That leave you with extra money

1X for Taxes

Taxes aren’t really going to be 1x per say but if you can make 1x and then quit

That literally means most of the money that come in, is going to be fully yours

You don’t want to get your goal and then realize that most of the money is going toward taxes

For example: if you make 4k net now

Then your passive income idea makes you 4k

Then you gotta take out most likely 33% of that for taxes

So I don’t think you have to make 1x of your income to cover it

But I do think it’s a good idea to cover at least 30% of taxes

1X for Investing

One of the biggest mistakes people make

Is forcing their business to use all the cash flow just to take care of them

That not a good idea

Why?

If youre business makes 2k and you eat the 2k

Then you don’t have any extra money to be able to put to work and allow to compound

That’s why you want to have money left over to invest

My idea is this :

You don’t need 1x but you do need atleast 20% extra for investing

This way you can perpetually keep investing no matter what

Lets run the numbers

Right now I make $4,000 from my job and I want to quit

How much money do I need to make before I quit my job

The answer is this

First: Baseline Figure

For me its $2,000 a month ( so about .5X)

Taxes may be about 30% or so

I also want to continue to invest so I need 20%

Option 1 is this:

Have at least 6-12 months’ worth of expenses in case things go left

Option 2 is:

Have a surplus of at least 50% of what you need per month

So that’s an additional $1,500

This way, if the income goes down you fall to where you can still run everythig

And use the extra income to build a reserve

Obviously this is not a quit your job tomorrow plan

But it is a quit your job and not have to worry about going back plan

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

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