Your FI Number — How Much Do You Actually Need?

The 25x Rule

Your FI number is simple to calculate:

FI Number = Annual Expenses × 25

This comes from the 4% Rule — research showing that a portfolio can sustain a 4% annual withdrawal indefinitely. The inverse of 4% is 25, which gives you your target.

Step 1: Know Your Annual Expenses

Before you can calculate your FI number, you need to know what you actually spend in a year. Not what you think you spend — what you actually spend.

Track everything for 30 days. Then annualize it. Include:

• Housing (rent/mortgage, utilities, insurance)
• Food and groceries
• Transportation
• Healthcare
• Entertainment and subscriptions
• Everything else

Step 2: Calculate Your Number

Annual Spending	FI Number
$30,000	$750,000
$40,000	$1,000,000
$60,000	$1,500,000
$80,000	$2,000,000
$100,000	$2,500,000

Step 3: Understand the Levers

You can reach FI faster by pulling two levers simultaneously:

1. Reduce expenses — every $100/month you cut removes $30,000 from your FI number
2. Increase savings — more invested each month compounds faster

The most powerful move is doing both at once.