Billionaire lawyer John Morgan said on a podcast that $30 million plus a paid-off house is the number where you’re set for life. His words: “$30,000,000 times 4% is $1,200,000 a year tax free. If you give me a paid off house and $1,200,000 a year I can live like a sheik.” People lost it, and fair enough, but he wasn’t saying that’s what you need. He was saying that’s what he needs. There’s a difference and the clip lost it. The useful part is the math he used, because it works backwards for anyone. Take the annual income you actually want and divide by 4%. $80,000 a year needs $2 million. $120,000 a year needs $3 million. $200,000 a year needs $5 million. $30 million is just what it takes if the number you want is $1.2 million a year. Two things he got slightly wrong though. That $1.2 million isn’t tax free unless it’s all in a Roth or municipal bonds. And the 4% rule came from a 1994 study built on much higher bond yields than we have now. But the exercise is right. Almost nobody has actually done it. Everyone picks a round number like a million and never works out what it pays. Spoiler: $1 million pays $40,000 a year.