Michelle and I often talk about the “FI Number”: your annual spending x 25. This is the amount of money you need in your nest egg to retire [based on the Trinity study, see show notes]. By retire, we mean you can live off this amount forever assuming you take a 4% withdrawal every year for your annual spending.

Knowing my FI number helped me set a goal that I could move toward, but knowing these three additional numbers gave me a clearer picture of what my finances really looked like relative to my future. Those three numbers are your (1) Coast FI number (2) Lean FI number (3) Fat FI number.

Here are quick definitions from the How To Money blog.

Coast FIRE: When you sock away enough in your early working years that later on, you don’t need to prioritize saving and investing.
Lean FIRE: Your investment portfolio can fund all of your basic needs in life, but not much else.
Fat FIRE: A hefty annual stipend, enough for you to live off – and more.

Show Notes:

Community Time

Thank you Paul and Oz Chen for your thoughts on Slob Kabob

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165. How Financially Free Are You? The 4 Numbers You Need to Know