Lets put a price on freedom.

Many of us dream of being able to walk away from work, supporting ourselves solely on income from our investment portfolios.

But what does that fantasy really mean?

The ideal arrangement would be to take as little risk as possible. We would live on only dividends and bond yields, without ever touching our capital.

To be sure, this dream could quickly turn into a nightmare if it required us to live on a pittance. Most of us would stipulate that we want at least as much annual income as the median Canadian family.

Given all that, what would freedom cost? Roughly $4.5-million, according to my calculations for the drum roll, please first ever Financial Independence Index.

The index is a toy Ive developed to answer the many readers who want to know when they can say good-bye to work without ever having to think about money again.

The good news and you may be happy to hear this is that the index is not designed as a realistic savings target for most families.

Think of it instead as an indicator of how financial conditions have shifted over the years and also as a demonstration of why most of us have to keep thinking about money and risk, even after we quit work.

The Financial Freedom Index owes a great debt to Scott Burns, a pioneer of personal finance journalism during his years at the Dallas Morning News. For years, hes compiled the Life of Riley Index, which puts a price tag on financial freedom for Americans.

Read the original:

Financial freedom is just $4.5-million away