Expense Multiple
An expense multiple is your portfolio value divided by your annual spending. If you have $700,000 saved and spend $50,000/year, you're at 14x. Financial independence using the 4% rule requires 25x.
Why It's Better Than Dollars
Dollar amounts are meaningless without context. "$700,000 saved" sounds different depending on whether you spend $30K or $100K per year. Expense multiples normalize everything. "14x" means the same thing regardless of income level: you have 14 years of spending saved.
This makes progress tangible. Going from 14x to 15x is a clear milestone. You can calculate it instantly and compare across income levels. The FIRE community increasingly prefers this framing. As one popular comment put it: "FIRE should be discussed as multiples of annual expenses. That's the whole point."
Common Benchmarks
- - 10x: Halfway to FI (psychologically significant)
- 12.5x: Halfway by the math (if using 25x target)
- 20x: Approaching FI, may qualify for Barista or Coast FIRE
- 25x: Standard FI target (4% withdrawal rate)
- 33x: Conservative FI (3% withdrawal rate)
Related Terms
FI Number
Your FI number is the total amount you need invested so that your portfolio can sustain your annual spending indefinitely. It's the finish line for financial independence.
The 4% Rule
The 4% rule is a retirement guideline that says you can withdraw 4% of your portfolio in your first year of retirement, then adjust for inflation each year, and your money should last at least 30 years.
Lean FIRE
Lean FIRE means achieving financial independence on a modest budget, typically under $40,000/year in spending, implying a portfolio under $1 million.
This tool is for educational and informational purposes only. It does not constitute financial advice. Past performance does not guarantee future results. Consult a qualified financial advisor for personalized advice.