Freedom Number
Set the monthly income that lets you leave your job safely
- Difficulty
- Easy
- Time to result
- ~weeks to results
- Steps
- 4
- Confidence
- 93%
The Freedom Number turns entrepreneurship from an all-or-nothing leap into a measurable transition. First, calculate the monthly amount required for core living costs, food, and recurring expenses. Treat that total as the minimum income your side business must reliably produce before you leave employment. The number is not a valuation target or a promise of wealth. It is a practical threshold that creates enough room to pursue the work you want. Noah Kagan says his number was $3,000 per month. Once AppSumo reached it, he stopped consulting and focused on the company. The mechanism links personal expenses to a business milestone, making the decision to quit less dependent on emotion or an arbitrary revenue goal.
Origin
Kagan says he identified a $3,000 monthly freedom number, reached it through AppSumo, then quit consulting. Extracted from The Foundr Podcast.
Core principles
- 01Freedom needs a concrete monthly number
- 02Cover essentials before chasing a larger goal
- 03Use side-income evidence before leaving employment
How to run it
- 1
Calculate essentials
List the monthly costs required to live, eat, and meet recurring obligations. Keep the first version focused on needs rather than aspirational spending.
Pro tip Use actual recent expenses rather than estimates.
Watch out Do not mistake the minimum threshold for a complete emergency fund.
- 2
Set the threshold
Add the costs into one monthly freedom number. Make it specific enough to compare directly with side-business income.
- 3
Build alongside employment
Keep testing and selling through side hustles while the day job covers current needs. Track whether the new income reaches the threshold.
Pro tip Prefer evidence from paying customers over projected revenue.
Watch out A single unusually strong month may not represent dependable income.
- 4
Make the transition
Once the business produces the freedom number, decide whether to leave the job and focus on it. Continue monitoring expenses and revenue after the change.
In the wild
Kagan set his freedom number at $3,000 per month. When AppSumo reached that monthly level, he quit consulting and focused on the business. He contrasts that modest original target with the much larger company AppSumo later became.
→ A personal expense target became the decision gate for moving into entrepreneurship full time.
Common mistakes
Choosing an ego number
A large round revenue goal does not answer what you actually need to make the transition. Base the threshold on essential monthly costs.
Quitting on projections
Forecasts are weaker than income already produced by customers. Validate the threshold through real sales before relying on it.
Is it for you?
Best for
It is best for employed people testing a business or side hustle before making a career change.
Not ideal for
It is not ideal as a complete cash-runway or risk plan for someone with volatile obligations.
From the transcript
“I had a freedom number this is something I I recognized my freedom number it was $3 000”
“I quit Consulting and was making 3,000 bucks a month.”
From the episode
498: He Lost Millions in Facebook Stock Then Built a $300M Tech Company
Noah Kagan