What’s Your Crossover?

The “crossover” was a phrase or term popularized by one of my favorite books, Your Money Or Your Life. The crossover is basically the moment where your monthly passive income finally exceeds all of your monthly expenses. When I first read YMOYL and the chapter where this term was coined, it became a dawning moment for me; a moment where I felt like my eyes had been opened for the first time. I realized that it was possible to pay for expenses without going to a jobby-job for 50+ hours a week, and seeing it on a graph made it all the more possible for me to buy in to this theory.

A great site that conveys the crossover point for you in graphical terms is What’s My Crossover. I decided to visit this site recently and input various numbers into the calculator, ranging from conservative to aggressive, and the chart shows me reaching financial independence anywhere from 34 years old to 40 years old! That’s pretty encouraging, seeing as how my ultimate goal is to reach FI by 40 years old. I think 34 is probably unrealistic, but it’s very exciting to see that passive income line cross over the expense line so early in life!

There’s a lot of retirement calculators out there, many of them much fancier than the one I’m discussing today. But it’s the graphical nature, in a way so similar to YMOYL, that excites me. It’s especially exciting to see when the “second crossover” occurs. That’s when your passive/investment income actually exceeds your main income source. That’s when it truly becomes apparent that your money can work harder than you can.

What’s your crossover?

Thanks for reading.


  1. says

    The crossover is a moving target both on the income side and expense side. For example, I could move to a lower cost state so that expenses are lower. Also, I could monetize some of my long term investments to produce more income than they do now.

    So, I’ve reached the crossover point already because I can make the changes required to achieve it. For now I’ve decided to keep working to build up more assets.

    • says


      Good on you for reaching the crossover point. That’s really great! I still have quite a ways to go.

      I agree that there’s two key factors at play here: how far you can cut expenses and how much income you can raise. The wider that gap becomes, or the higher a savings rate you can attain, the easier it is to achieve financial independence. That’s why I’ve always tried to equally concentrate on living frugally/saving money and investing.

      Best wishes!

  2. says

    awesome, I love playing with stuff like this. Great way to stay motivated. Day by day it can seem like savings are building really slowly, so calculations like this are a great way to stay focused on the goal.

    With savings rate at 40%, it says I should be FI at almost exactly 40 years old, which is my goal!

    That’s assuming a 7 to 8& return, but it is also assuming my income only keeps pace with inflation and doesn’t rise in real terms, and that my savings rate doesn’t get better than 40%. I think I can beat both of those over the next ten years or so!

    • says

      The Money Monk,

      Reaching FI at 40 years old would be fantastic, and something that very few people do. Even though we talk a lot about saving money and investing here in our blogosphere…in normal every day life this is a rare occurrence. Sometimes we get used to talking about having savings rates of 50%+ and investing in equities and this is all commonplace for us, but if you start talking about this to co-workers and family members you usually get strange looks.

      It’s great to have perspective and realize how great you’re doing.

      Best wishes!

  3. says

    YMOYL is a pretty powerful book. It was one of the first when I started on this journey in Dec. 2010.

    I like the chart above. I’ve been tracking the income and expense for the past year, but his year I’m going to add in the income from investment line to keep track of where I’m at and where I’m going.

    • says

      The Stoic Investor,

      I agree. YMOYL really opened my eyes. I’ll always have affinity for that book.

      Keep up the great work and your crossover point will be reached before you know it.

      Take care.

  4. says

    I have been meaning to read Your Money Or Your Life. I think it is going to be the first thing on my summer reading list. I have seen the crossover concept elsewhere and think it is a really powerful idea.

    I am lucky that I get to know about it before I start earning a full time income or having full time expenses so I feel I will be able to recognize when I am at the point right away and be able to keep working past it to be more comfortable with the risks involved with early retirement.

    • says

      Poor Student,

      I definitely recommend the book. The concept of time as life energy is something I live with everyday.

      It’s great you’re starting out young. Starting out on the path to FI at a young age is a great way to secure your financial future.

      Best of luck on your journey and if you read YMOYL, let me know what you think.

      Take care!

  5. says

    Interesting idea. I tried a few different scenarios in that calculator and came up with crossover points ranging from 38 to 44 years old, which seems pretty good.

    • says


      38-44 years old is an excellent range to be in. That’s incredibly early in life to reach FI, if you compare it to most of the population. Although I’m shooting for 40 years old, even if I didn’t get there until 45..that’s still INCREDIBLY early. Always good to keep perspective!

      Best wishes.

  6. says

    What’s extremely interesting to note using sites like this one is how much more important the annual value increase compared to an increase in savings is. Hence the importance in buying attractively valued stock instead of just increasing your saving percentage and buying at whatever the price might be.

    • says

      Niklas J,

      I agree. There are many important factors at play here. You have to keep a high savings rate and also have to effectively manage your capital. I’ve tried to adapt as many best practices as possible in every area of finance. I try to have an excellent acumen in frugality, investing and money management in general.

      Best wishes!

  7. says

    Here’s a perfect example of where we agree, DM. Great book and very useful chart for illustrating the concept.

    my story is much like Six Figure Investor. the lines are moving targets that can be adjusted as your please.

    personally I got to FI at around 39 and that was while making many expensive mistakes along the way and without all the useful info available on sites like yours.

    So it is perfectly doable. In fact, if someone lives below their means, invests the difference and avoids debt it’s hard to see how they’d not get there.

    • says


      Definitely. YMOYL is a wonderful book.

      I agree that reaching FI is not terribly difficult if you have the drive and knowledge needed to get there. I think even if you make a very average salary here in the U.S., avoid serious debt, live below your means and invest wisely you’d have a hard time not reaching financial independence at a young age. I started less than two years ago and I’ve already made leaps of progress.

      Best wishes!

  8. says


    Well I did some crossover scenarios and it’s painfully obvious that I am not saving enough and my expenses are too high. For example, my mortgage and my student loans aren’t going away anytime soon. I have other debt that should be eliminated soon that should give me a huge boost. In the next 24 months I will pay off debt that will free up $3800 in payments per month. I can’t wait for that to happen.

    Thanks for this info DM, another great post!


    • says


      Don’t worry, my friend. Realizing where you’re at is most important if you wanna know where you’re going. It sounds like you’re conscious of your situation and willing to do what it takes to improve it. Freeing up $3,800 per month is huge, as that’s right about what I make a month in income. Good stuff!

      Keep up the great work. You’re getting there!

      Best wishes!

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