Thanks for the replies, everyone! Here are some clarifications and new Qs...
Do you really live in NYC? You could probably lower your number if you were willing to relocate for retirement.
We moved about 90 minutes north of the city. I take a train in every day to work for my big money job. $500/mo for commuting and 60 hours out of every month for commuting - it's very UGH, but we had to do it to get to an affordable area with a house that we could see ourselves putting down roots in. Unfortunately, I can't find my kind of money up where we live. I've evaluated switching jobs and taking a massive pay cut, but it's a difficult decision between more time at home now versus getting to FIRE sooner. Jury is still out, but here I commute, regardless :) At least my wife works from home.
If your spending really is 4k a month in FIRE then $1.2 million would be your goal if you're using the standard 4% math. You haven't mentioned anything about your asset allocation and your appetite for risk though. If you're more conservative and want more bonds in your portfolio you might need a little higher number.
Thanks! We're 85/15 and comfortable with risk.
As far as quitting jobs or scaling back before you hit that number, that's largely up to you and how confident you fell in your ability for make income after you quit/scale back. Some people call that CoastFI. They've accumulated enough income to take scaled back employment and coast into retirement as the market grows their stash over the home stretch.
CoastFI! I love it.
At 48k expenses, you may want to do some research about what your healthcare costs will look like under the ACA. Who knows if it will still be the law of the land when you retire but you should know what that cost will look like with the current landscape.
Oh, really good point - I have super Cadillac health insurance paid for by my company. I don't have healthcare costs in any of my projections and know nothing about how that works yet.
I think there are just too many unknowns here. Do you have kids or other dependents, like parents you will choose to support if needed? How much do you each expect from Social Security? Do you have pensions? How confident are you that your business ideas will actually generate money? Are you already doing them so you really know, or are you guessing? All of these factors and more impact how aggressive you can be. If you have no dependents, have real proof that your business ideas will generate money, you both have significant SS coming, and both have pensions, then I'd say you should quit now and just work on the businesses. Earn the $48k / year from your businesses and enjoy being free from the corporate shackles. If you reverse the answers above, then I'd suggest you hit at least $1.25M, although I think your wife could probably drop to part time if you think that would improve your lives.
We have no kids, no parents to take care of (yet), no idea on SS (according to SS.gov, about $3500/mo total if we retire in 5 years?), no pensions.
In terms of business ideas, we have consulting and contracting gigs we have done in the past we can go back to and we can do part-time. We have business plan drafts for the rest of the ideas with revenue and cost models, etc. which we have a high confidence in hitting. The businesses require both of us to dedicate our time to make them successful, however.
The vagueness of your budget also makes me question whether or not you've accounted for things like taxes, ACA subsidies, health care costs, etc.
Taxes for sure (we always seem to owe ~$8k at tax time, so I account for that). ACA and health care, as I mentioned above, I have not factored in at all - I take it for granted at present because it's automatic and costs me nothing. Time to get educated on another thing, I guess ;)