The S&P 500 is up roughly 100% over the previous three and a half years. At its historic common annual return of about 10%, you’d count on it to be up nearer to 40–50% over that very same stretch. Which means there’s an unlimited quantity of “free cash” floating round, returns above and past what anybody had an inexpensive proper to count on.
So why are so many individuals nonetheless grinding prefer it’s 2021?
I get it. We’re wired to maintain pushing, preserve saving, preserve constructing, preserve waning extra. We need to construct an even bigger buffer when the inevitable bear market comes.
However sooner or later, that self-discipline stops being a advantage and begins being a reflex. The more durable you’re employed previous the purpose of necessity, the decrease your return on effort. Time is the one asset that does not compound. You may at all times earn more money. You can’t make extra Sundays.
I need to problem you to consider what these extraordinary good points really imply for the way you are dwelling your life. You do not have to FIRE, like I did in 2012. However it’s extremely doable you’re leaving a greater way of life on the desk within the title of extra that you do not actually need.
Who’s Truly Benefiting From This Bull Market?
Earlier than diving in, it is price grounding the numbers. About 62% of Individuals report proudly owning inventory in 2025, matching the 2024 studying, and the best sustained degree in almost 20 years.That sounds encouraging. However dig somewhat deeper and the image will get extra unequal.
The wealthiest 1% maintain about 50% of all shares, price roughly $29 trillion. Increase that to the highest 10% and so they maintain 87% of equities. The underside 50% of Individuals by web price personal simply 1% of all shares.
Inventory possession is highest amongst adults in households incomes $100,000 or extra (87%), faculty graduates (84%), and married adults (77%). I am assuming that is most of you. Amongst these incomes lower than $50,000, possession drops to simply 28%.
What this implies: the bull market of the previous few years has been a rare wealth-creation occasion , however it’s been concentrated. For those who’re a daily Monetary Samurai reader and newsletter subscriber, you are virtually definitely within the portion of the inhabitants that is been a significant beneficiary.
The query is what you are really doing with it.
The “Free Cash” Math
At a ten% annual return over 3.5 years, a $500,000 portfolio turns into roughly $682,000, a acquire of about $182,000. As a substitute, at 100% whole return, which we have simply skilled, that very same portfolio is price $1,000,000. That is $318,000 in further, above-expectation good points. Not since you labored more durable. Not since you made sensible inventory picks. Simply since you held.
This issues for the way you concentrate on your subsequent yr of your life. That extra return, roughly $136,000 per $500,000 invested on the most simple calculation, represents vital spending for many.
It additionally represents freedom purchased cheaply by merely staying invested. And but most individuals will let that quantity sit in a brokerage account and proceed exhibiting up Monday morning to a job they’d quietly quit in the event that they felt they may afford to.
They will a minimum of go away to do one thing extra pleasurable, no matter decrease pay. They simply have not run the mathematics but.
Let’s do it for a couple of totally different conditions.
From $50,000 to $100,000: The Younger Grinder
You began working at McDonald’s at 16, saving and investing 80% of your paycheck whereas dwelling at dwelling. By 24, you had $50,000 in a taxable brokerage account, a powerful feat of self-discipline. Three and a half years later, the market has doubled it to $100,000.
You are now the affiliate supervisor making $60,000 a yr. It is an actual job, with actual duty. However it’s not the life you imagined.
At this stage, $100,000 is not “retire early” cash, however it’s “guess on your self” cash. The historic 4% withdrawal rate offers you about $4,000 a yr in passive earnings, which does not transfer the needle a lot by itself. However what it does is purchase you braveness.
As a substitute of grinding towards a $85,000-a-year administration observe, you go part-time and enroll in neighborhood faculty to review filmmaking. You write and direct quick movies. Possibly you grow to be the following Sean Wang, whose semi-autobiographical indie movie Didi premiered at Sundance. Possibly you do not.
However you gave your self the shot, and your $100,000, quietly compounding within the background, gave you the cushion to strive. Yearly you wait, the hole between “who you’re” and “who you need to be” will get somewhat more durable to shut.
The additional $25,000–$30,000 in above-historical good points you simply acquired did not require something from you. Use it to purchase one yr of going all-in on one thing you really care about.
From $100,000 to $200,000: The Idealist Trapped in Consulting
You are 26, three years right into a soul-draining job in administration consulting. In your faculty software essay, you wrote about constructing a nonprofit to carry clear water to communities in Somalia. In contrast to your classmates who virtue-signaled their means into elite faculties after which straight into consulting, you really did the work in highschool. You meant it.
However you bought into Yale, partly on advantage, partly as a result of your father’s title is on a constructing, and the trail of least resistance was consulting. The pay was good. The status of working at McKinsey was intoxicating. And now right here you’re, two years in, questioning how you bought so removed from who you have been at 17.
Your portfolio has doubled from $100,000 to $200,000. At a 4% withdrawal price, that is $8,000 a yr, not sufficient to reside on, however sufficient to cowl modest bills in a low-cost a part of the world. Mixed with grant funding and the nonprofit connections you continue to have, it is sufficient to return.
You stop. You progress. Your coronary heart is full. And the $200,000 nonetheless rising in index funds acts as a everlasting backstop, a monetary flooring meaning you may by no means actually be caught once more. (It additionally does not damage that your mother and father arrange a $5 million belief, however that is a separate essay.)
From $800,000 to $1,600,000: The Finance Lifer Able to Escape
You are 30, with $300,000 in your 401(ok) and $500,000 in a taxable account after some nice bonuses and constant frugal dwelling. That is $800,000 whole after eight years in finance. Not unhealthy! Three and a half years later, you are sitting on $1,600,000.
Seven figures. A quantity that felt summary at 22 now has your title on it.
However you hate the hours. You hate the fixed strain. Probably the most attention-grabbing factor you probably did final week was a pitch deck for a deal you do not really consider in. So that you increase your hand to get laid off, a transfer that, completed proper, gets you a severance package price six months of wage whereas preserving your eligibility for unemployment advantages.
At 33, you resolve it isn’t too late to reinvent your self. You return to high school for an MBA at Berkeley. You are taking the job in China you handed on at 22, the one in enterprise growth that felt too dangerous on the time. Now, with $1,600,000 in property compounding at 7%+ yearly, you possibly can afford to take a job for the expertise relatively than purely for the wage.
The “free cash” on this state of affairs, the $500,000 – $600,000, above what historic returns would have generated is not only a quantity. It is the psychological permission slip to stroll away from one thing good however flawed, and towards one thing unsure however proper.
From $3,000,000 to $6,000,000: The Tech Burnout Who Retains Delaying
Twenty years in tech. You rode the wave effectively, $3,000,000 in equities, a house with $1,000,000 in fairness, and a 3% fixed-rate mortgage that now appears like a murals in hindsight.
You have been burned out for 2 years. You’re feeling genuinely unhealthy about constructing merchandise designed to maximise doomscrolling time amongst individuals who’d be higher off closing the app. However you could have two children in personal faculty for a complete value of $125,000 a yr after tax.
Your husband works part-time on the science museum for $25 an hour as a result of it is significant to her. Your loved ones’s bills are $260,000 a yr. Retiring at 43 feels reckless, so that you set a goal: 50, assuming 7% annual returns. By then, $3,000,000 turns into $4,800,000. Ok!
Besides three years later, you are 46 and your portfolio is price $6,000,000. Not $4,800,000. Six million.
You might be three and a half years forward of schedule. The above-expectation good points alone, roughly $750,000 to $1,000,000 above what historic returns would have produced, characterize greater than 4 years of your annual bills. Your property has additionally quietly appreciated from $2.3 million to $3 million, boosting your own home fairness by one other $700,000.
At a 4.5% withdrawal price on $6,000,000, you generate $270,000 a yr gross, virtually sufficient to cowl your $250,000 annual spend after taxes. The one factor preserving you at your desk is inertia and identification.
Your children are 14 and 16. Inside 4 years, they’re going to each be gone eternally. After they have been first born, you had an excuse to ship them to daycare and preschool early. However that guilt has at all times stayed with you. So that you negotiate a severance and make up for misplaced time.
From $7,500,000 to $15,000,000: To Your Well being
You are 53. Thirty years of 55-hour weeks. You constructed one thing from scratch and genuinely helped folks, a free well being product that improved lives. Your philosophy was easy: the extra you give, the extra you obtain.
However the prospects who complain have began to outweigh those who’re grateful. Why aren’t options being added quicker? Why will not you reply to each electronic mail? How dare you associate with sponsors to pay the payments on a product you give away without spending a dime?
However worst of all, your well being is deteriorating. The childhood bronchial asthma that after despatched you to the hospital a number of instances has returned with a vengeance. You’re consistently conscious of your respiratory as a result of it feels so labored. In the meantime, your hip pops with each step, a reminder of creeping arthritis and the chance of a future substitute. Your entrepreneurial pursuits have come at an actual value to your well-being.
You had $7,500,000 in shares three years in the past. Immediately, your fairness portfolio has doubled to roughly $15,000,000. Your actual property holdings went from about $6,000,000 to $9,000,000. Your whole web price is someplace round $24,000,000.
The above-historical good points in your fairness portfolio alone, roughly $3,000,000 to $4,000,000, characterize extra money than most individuals accumulate in a lifetime.
For the primary time, you could have the readability to confess that you’ve got been staying within the sport not as a result of it’s essential to, however as a result of you do not know who you would be in the event you stopped. It is lastly time to focus in your well being by promoting your organization.
Purchase Your self Time and Happiness With Your Market Positive aspects
Making 100% in shares in three and a half years will not be regular. It isn’t what historical past suggests it’s best to count on. And in the event you do not use these fortuitous good points to meaningfully enhance your life, you threat lacking all the level of investing within the first place.
Here is your permission slip.
With returns this far above expectation, it is mindless to endure a job you dislike for even yet another yr. It is mindless to stick with a associate you’ve got outgrown, or to maintain grinding via obligations that not replicate who you’re or what you worth.
Change is tough. Giving up the pursuit of maximum money is genuinely tough when standing and earnings have grow to be a part of your identification.
But when your portfolio has doubled in three and a half years when you have been busy working 60 hours per week, one thing price analyzing is going on. Sooner or later, continuing to trade irreplaceable time for incremental good points you do not want is simply behavior, not technique.
You owe it to your self, your associate, and your kids to truly use what you’ve got constructed. As a result of in the event you do not, you may merely get richer, however will not really feel fairly proper.
Have you ever completed the mathematics on how a lot “free cash” the bull market has generated on your portfolio? If not, use the interactive chart above to search out out. In case your portfolio has doubled prior to now three and a half years, what is definitely stopping you from making a significant life change? Is it concern, identification, or one thing else? At what portfolio dimension would you lastly really feel snug leaving a job you dislike? And in the event you’ve already crossed that quantity, why are you continue to there?
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Monetary Samurai is a promoter of the Empower Advisory Group, LLC (“EAG”), and isn’t at the moment a consumer.
