What Is Your FI Number? How to Find Your Freedom Figure
Your FI number is the size of the portfolio that makes work optional. Here is how to calculate it — and three ways to make it smaller.
Financial independence sounds vague until you put a number on it. Your FI number is the portfolio size at which the returns can cover your living expenses indefinitely — the point where work becomes optional.
The calculation
It comes straight from the 4% rule:
FI number = annual spending ÷ 0.04 (the same as annual spending × 25)
So the whole thing hinges on one input you control more than you think: your annual spending in financial independence.
- Spend $40,000/year → need $1,000,000
- Spend $60,000/year → need $1,500,000
- Spend $100,000/year → need $2,500,000
Why spending matters twice
Lowering your target spending is uniquely powerful because it works on both sides of the equation: a lower number to hit, and (usually) a higher savings rate to get there faster. Cutting $10,000 a year off your planned spending knocks $250,000 off your FI number.
Three ways to shrink your number
- Trim recurring costs. Housing, transport, and subscriptions are the big levers — a permanently lower baseline lowers your number for life.
- Plan for paid-off housing. If the mortgage is gone by retirement, your FI spending drops.
- Count other income. Social Security, a pension, or part-time work reduce how much the portfolio has to cover.
From number to date
Your FI number is the destination; your savings rate sets the speed. To see when you would actually arrive — and the earlier Coast FIRE milestone along the way — run your numbers through the free Coast FIRE calculator.
A number you can name is a number you can plan for.
Want the full system?
Build Real Wealth turns these ideas into a step-by-step plan, with interactive tools and a clear path from where you are to where you want to be.