Are You FI Curious? (The Financial Independence Spectrum)

Since income is the active number in our lives, “I make 2000 biweekly,” it too often becomes the main focus for spending, “so I must be able to spend 2000 on average.” Some people get lucky, and the money keeps raining until they retire on the company +/- government pension, but most of us have droughts from time to time. There is another number that is similarly easy to track, one that forces a longer term view: Net worth.

Plenty of FIRE (Financial Independence, Retire Early) people are working their way towards some variety of saving to the point that annual spending is under 4% of their net worth. Even if you haven’t bought into the target, looking at your spending as a percentage of net worth is a profound shift. Being able to see continuous progress from income or spending improvements, or maintaining the good balance you already have, is ridiculously motivating. Since numbers alone are boring for most of us, I built a chart to show the spectrum of spending and net worth:

You can see some of the usual FI references, but I also threw in a couple new ones. Spending Rate defined as percent of net worth spent, annually. The list is formatted in an if/else-if style, but sorted in reverse. “Best” for last.

  1. Till Debt do us Part (Negative Net Worth): The name of one of my favorite shows in high school. Most of the episodes featured people well below the bottom of this chart.
  2. Near Debt Experience (Spending Rate >= 50%): If your life isn’t flashing before your eyes, it should be. At least it’d be an opportunity to review where you spent your money.
  3. Sabbaticapable (Spending Rate >= 30%): You could afford to take a sabbatical. Barely. Probably.
  4. FI Curious (Spending Rate >= 10%): You’re more independent than most, but aren’t FI enough to enjoy many of the benefits.
  5. FUFI (Spending Rate >= 4.5%): Often referred to as FU money, this is where you have enough to feel confident leaving a job you hate, but will still need to work.
  6. Pretty FI for a… (Spending Rate >= 4%) : Yes, an Offspring reference. Enough that a lucky, or adaptive, person wouldn’t need to worry about working for money.
  7. Normal FI (Spending Rate >= 2.5%): You’re FI enough to retire in many scenarios.
  8. Turbo FI (Spending Rate >= 0.8%): Now you can financially survive many of the more extreme scenarios.
  9. Super FI (Spending Rate >= 0.4%): You could probably spend your time fighting crime or something else worthy of a movie.
  10. Ludicrous FI (Spending Rate < 0.4%): You’ve probably gone to plaid by now…

3 Paths Through the Spectrum

With introductions out of the way, we can now visualize several paths commonly attempted. I have marked each with white lanes that people might aim to stay within, using a certain strategy.

Path 1: Category First

This one plans to keep their current spending until they reach a certain category of FI. Once they’ve arrived, increasing spending as savings grow. This is the most common path described, if you include donations and other outflows.

Path 2: Bigga Spenda

Some people like, even love, their jobs. So they could choose to grow spending before having enough to retire.

Path 3: Up is All

Voted most likely to reach Ludicrous FI.

As you can see from the examples, the main theme is to generally move upward, but the angle can vary significantly. I suggest saving the image of the original spectrum, to trace your own path, and your approximate journey so far.

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