The Stages of Financial Independence

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I started reading this blog about five years ago, when I was literally asking myself the question “Can I Retire Yet?”. I desperately wanted to escape a career that dominated my time and left me feeling burnt out.

Approaching summit

Reading this and other blogs was incredibly educational. However, as I better understood the challenges and uncertainty that come with planning for early retirement, I became anxious, felt even more trapped, and went through one of the unhappiest times of my life.

I hear different versions of this story frequently from readers of this blog. You save and plan for years, but then have difficulty taking the leap into the unknowns of retirement.

I realized we can get stuck in a false construct, the dichotomy of working or retiring. We often don’t use the freedom and power our growing wealth enables us to create on the path to retirement. What we need is an entirely new framework that enables us to use our progressively increasing level of financial independence (FI) to live our best lives now, rather than putting things off to a future date that may never come.

Next Tuesday, October 1st, Brad Barrett, Jonathan Mendonsa and I are releasing the book Choose FI: Your Blueprint to Financial Independence. Instead of starting with the assumption that retirement is the ultimate financial goal and asking how fast can we get there, we start with an entirely different framework. We lay this out in Chapter 1: The Stages of FI, which I’ll share with you today.

The Stages of FI

“Every revolutionary idea seems to evoke three stages of reaction. They may be summed up by the phrases: 

  1. It’s completely impossible. 
  2. It’s possible, but it’s not worth doing. 
  3. I said it was a good idea all along.

–Arthur C. Clarke

We all know the reasons you cannot or do not Choose FI. You don’t have to look far to find stories about young people crushed by student debt, soaring housing costs, and stagnant wages. On top of all that, investing is complicated. Against this backdrop, how can people possibly retire securely, let alone achieve FI before age sixty-five? It’s easy to see why many people quickly become discouraged, and others never try.

Choosing FI becomes much easier if we reframe what FI means and how it empowers you. FI is often framed as a dichotomy: zero or one. You’re either FI or you’re not. You’re working or you’re retired. 

This all-or-none thinking is the exact wrong way to frame the conversation. This makes FI seem like a far off, unachievable goal. So most people never get started. Besides, it’s absurd to think that one dollar more or less in a retirement account will change everything. Yet this way of thinking traps many of us on the path to FI. Rather than recognizing the progressive freedom and power our growing wealth provides, we often get caught up in the slog. Once we realize that money is just a means to an end that allows us to live the lives we want, it’s easy to see that we are progressively gaining power and freedom along the path to FI.

JL Collins, author of The Simple Path to Wealth, has popularized the phrase “F-you money” among the FI community. He described the concept as not necessarily having enough money to retire forever, but enough to say “F-you” if needed. Having F-you money allows a degree of freedom that most don’t have. 

Brad told the story of using the power of F-you money to leave his job as an accountant to pursue a different path in life. Anyone can relate to his experience of being bound to the rules and regulations of an employer. Here’s how he described the straw that broke the camel’s back in a conversation with Jonathan on the podcast: 

“All of a sudden we had to come in at eight o’clock instead of eight thirty, and it just ticked me off to no end. It was just that absolute garbage “facetime” nonsense that is everything I hate about corporate America. It’s not the value of your work. It’s not how efficient you work. It’s just literally the number of hours that you’re chained to your desk. And it was just such a ridiculous power play . . . you can hear it in my voice. It pisses me off to this day. And honestly, that was it. Within a couple of days, I said to [my wife] Laura, ‘I can’t do this anymore. I’m out.’ And I walked in and put in my notice and got the heck out of there. That was a combination of A, having a growing business that I could really sink my heart and soul into and B, being well down the path to FI, albeit not at FI. But the conjunction of those two things just gave me the power to say, every other sucker has to deal with this.” 

But he didn’t.

Brad’s Soapbox

Leaving my safe corporate accounting job was a monumental step, and there’s no way I can honestly say I wasn’t scared I was making the wrong decision. I was so far along the path to FI that the easy decision would have just been to stick it out a few more years and be 100 percent sure and “safe.” 

But I knew I could always go back and get another accounting job, and I knew I’d always regret it if I didn’t really give my best effort to growing these online businesses. I left on January 31, 2015, and started Travel Miles 101 the very next day! TM101 led me to Choose FI as Jonathan heard me talking about rewards points on the podcast Mad Fientist and that’s what led to him reaching out to me in the first place. The rest, as they say, is history!

Surprisingly, Brad’s story is a bit of an outlier in a community full of people who have accumulated F-you money. Having F-you money rarely means you’re ever going to say those words, quit your job, and walk out after with your middle fingers in the air.

Jeremy, writer of the blog Go Curry Cracker, said F-you money gave him the confidence to do a better job. This confidence made his working years enjoyable and made him more valuable and highly compensated, thus shortening the number of years he needed to work. Most people he worked with were burdened with financial obligations. If you have a mortgage, a couple car payments, a family to feed, and nothing in the bank, what choice do you have when your boss asks you to do something stupid? Most people are going to say yes. Doing otherwise could put everything you have at risk. Jeremy observed that having the confidence to say, “I don’t think that’s the best way to do it, and this is how I think we should go forward” changes an employer’s perspective of you. 

Having the freedom and confidence to not go with the flow enables you to take risks that will add value to an organization. Suddenly, instead of being another pushover, you’re seen as a go-getter. The power dynamic shifts when you’re not reliant on your employer to provide a paycheck for your survival. The worst-case scenario is you getting fired. If you don’t rely on that next paycheck to stave off disaster, the scenario is not so scary.

F-you money is a powerful concept that many in the FI community have latched on to. But it’s vague. We all quantify the exact amount we need based on our individual personalities, attitudes toward money, and risk tolerance. 

We need a better framework with which to quantify the stages and benchmarks along the path to FI as we track our progress and celebrate small wins along the way. Joel, who with his wife Alexis, writes the blog Financial 180, discussed this at length with Brad and Jonathan when they used the framework he developed to riff on the topic.

Stages of FI

Joel’s milestones are based on the FI community’s idea that you are financially independent when your investments are twenty-five times your annual expenses. This idea comes from the 4% Rule, which is based on historical data that shows you can withdraw 4% of your portfolio on the day you retire, then continue to take the same amount, adjusted for inflation, every year going forward with little chance of running out of money. We’ll examine the 4% Rule more closely later in the book. 

You can adjust milestones if you’re taking a different investment approach and argue as to whether there should be more, less, or different benchmarks. Still, it’s an interesting place to start the conversation on the way power and freedom increase as you travel the path to FI.

1) Getting to Zero

The first milestone is getting to zero net worth. Having a net worth of zero, literally being worthless, may not sound like something worth celebrating at first. But for those on the standard path through life who Choose FI, this can be a huge accomplishment. Consider that “normal” for most people means having debt, whether from credit cards, car loans, student loans, and/or other consumer debt. On top of that, the largest expense for most people is housing, with rent or mortgage payments due each month. 

For many, the next paycheck will be spent paying for past decisions. This is a restrictive way to live. You go to work to collect a paycheck just to prevent someone from coming to repossess what you already have. There is no freedom to choose the life you want going forward.

Having no net worth is not a “worthless” goal. Whether you choose to define this as being debt free, debt free excluding a mortgage or having a net worth of zero (assets minus liabilities), hitting this milestone is important because it gives you options going forward.

Jonathan’s Soapbox

I lost over a decade accumulating and then paying off debt for a degree that I’m no longer using. I didn’t appreciate the time value of money. I graduated at the age of twenty-eight with $168,000 in debt. 

It took intentionality, focus and a lot of hard work just to get back to zero. But I’ll never regret putting in the work to get there. Getting out of debt gave me the freedom to decide where my future dollars would go rather than having to use them to pay for past decisions.

2) Fully Funded Emergency Fund

A hallmark of financial advice for those on the standard path is to have an emergency fund of three to six months’ living expenses. Having an emergency fund in cash is solid advice for most people, particularly those without other financial means to deal with the inevitable adversity of life. But what does it take to save this amount of money for someone following conventional financial advice?

If you save 10 percent of your income while spending the other 90 percent as commonly advised, you would have only accumulated about one month of living expenses after a full year of saving. It would take about five years just to fund six months of living expenses. It’s no wonder many on the standard path become discouraged and wind up saving little to nothing.

Contrast this to someone who chooses FI. Developing a high savings rate requires you to lower your monthly expenses. This lowers the bar for how much you have to save to support three to six months of spending, while simultaneously freeing up the money to save. If you can save 50 percent of your income, you will have a full year of living expenses after only one year of saving. You can fully fund an emergency fund of three to six months of living expenses within three to six months. 

Quickly funding an emergency fund gives you the peace of mind that you have some cushion if something bad happens, such as an injury or your car breaking down. It also allows you to quickly start directing future savings to investments, allowing your money to start working for you.

3) Hitting Six Figures

The third milestone is achieving a six-figure investment portfolio. Up to this point, you won’t have had enough assets for investment returns to make a big difference on your wealth building, so you have to work hard to earn and save your way to this milestone. You should celebrate the fact that now that you’ve accumulated substantial wealth, it will be easier to see your money working for you, even though you still have to work for money.

According to the most recent US Census data, a six-figure net worth puts you in the top 50 percent of American households. If you subtract home equity, the median household net worth is under $50,000. While relatively rare for those on the standard path, people with a decent income and a high savings rate can achieve a six-figure portfolio quickly. A couple maxing out 401(k) contributions (limit $19,000 per person in 2019) would hit this milestone in under three years without any investment growth or employer match. Maxing out a single 401(k) gets you there in a little over five years.

If you combine a six-figure net worth with an efficient lifestyle, this is a milestone where you may have enough wealth to support two to four years of living expenses. This provides a cushion, giving you the confidence to start using F-you money without short term consequences if it backfires.

4) Half FI

The fourth milestone is reaching Half FI. This is when your assets reach twelve and a half times your annual spending. While this is half the amount that the 4% Rule suggests you need to be FI, your journey to FI is likely more than half done. If you start with debt, it takes time just to get to zero. Then you have to save to have enough to start experiencing the noticeable benefits of compounding investment returns.

Once you’ve built a sizable portfolio, your money produces substantial investment returns, which amplify the results of the efforts from you working, earning, and saving. At some point around this milestone, you will reach a crossover point. You’ll begin to notice that when your investments have a good month or year, they will passively contribute more to your net worth gains than your active contributions. Passive income is what makes FI possible—this is definitely something to celebrate.

5) Getting Close

The next two milestones may occur in either order. The order will depend on the amount of discretionary spending you have in your budget. Depending on the lifestyle you desire, either may give you the confidence to start transitioning from a traditional job to a different way of life.

The first of these milestones occur when your portfolio reaches twenty-five times the annual spending required to cover all your essential expenses like housing, food, utilities, and health insurance. Tracking your expenses (discussed in Chapters 4 and 5) allows you to easily see how much of your spending goes to the essentials. At this point, you couldn’t maintain your current lifestyle without working, but you could stop working without having to worry about going hungry or keeping a roof over your head. You could cover the basics with investment income, needing to earn only enough to cover any luxuries you desire.

The other milestone is achieved when your portfolio reaches twenty times your total annual spending. You could cover your total cost of living by drawing down 5 percent of your portfolio annually. While less safe than using a 4 percent withdrawal rate, this gives you a greater than 80 percent chance of maintaining your spending without running out of money based on historical data. It’s conceivable you could leave your job at this point, with the stipulation that you’re willing to be flexible with spending and/or earning if your investments don’t perform well early in retirement.

6) FI

The next milestone is when your portfolio reaches twenty-five times your entire annual spending, which most people in the FI community use to define “financial independence.” This is based on the 4% Rule. As we’ll discuss later in the book, this doesn’t guarantee success. But considering all historical scenarios, it holds true more than 90 percent of the time. With some flexibility in spending or willingness to work to earn some income from time to time, you can now declare yourself fully financially independent. This assumes you’re content maintaining the lifestyle established at your current level of spending.

7) FI with Cushion

Achieving an investment value at least thirty-three times your annual spending would equate to a 3 percent annual withdrawal rate. This has never failed in any historical setting. Building an investment portfolio to this size or greater gives you security and room to increase your spending over time if desired or needed. Achieving FI with cushion allows for a feeling of abundance rather than scarcity that turns some off from the idea of FI.

Progressive Freedom

You may want to create more milestones along the way. Incremental milestones have two benefits: they give you short and intermediate goals and benchmarks to keep you motivated, and they keep the growing power and freedom you have along the path to FI in the forefront of your mind. Your growing power opens more possibilities to design unique and interesting lifestyles with progressively less risk. 

Seeing the power of the wealth you’ve accumulated can give you the confidence to abandon your “normal” job and start pursuing a different way of life. This is demonstrated repeatedly in the FI community.

Action Steps

  1. Define what F-you money means to you. How much money do you need to feel secure to take more risks in your career, cut back work, or try something completely different?
  2. Determine where you are on the stages of FI. Does it make sense to continue on your current path to FI as quickly as possible? Why or why not? Explore the options available to you.

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[Contributing Editor Chris Mamula used principles of traditional retirement planning, combined with creative lifestyle design, to retire from a career as a physical therapist at age 41. After poor experiences with the financial industry early in his professional life, he educated himself on investing and tax planning. Now he draws on his experience to write about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? Chris' writing has been featured in MarketWatch, Doughroller, Business Insider and RockStar Finance. He is also the primary author of the forthcoming book Choose FI: Your Blueprint to Financial Independence. You can reach him at]

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  1. Great post Chris. Since I hit FI “accidentally”, meaning I wasn’t striving for it, I’m now in the “FI with Cushion” stage. In a way I’m glad I wasn’t striving for FI all through my 20’s and 30′ because it probably would have created more stress and anxiety than having achieved it the way I did.

    • Chris Mamula says

      Thanks Dave. We had a similar experience of being naturally great savers, otherwise blissfully unaware of what we were doing.

      This led to some serious financial blunders, which are well documented on the blog and in the book. But it also meant we weren’t overly focused on money for most of our journey, and instead we just enjoyed life and spent on things truly important to us.

      Gaining financial literacy was overall a massive net positive for us, but gaining an understanding of all the uncertainties and risks that accompany what most people think of as retirement also added a lot of anxiety and stress until we figured out work arounds to give us the things we truly desired in life w/o the downsides of traditional retirement.

  2. Having F-You money or a secure set of skills (meaning you can easily get another job) is key, even if you don’t quit or retire. I can’t overstate how my job interviews and dealings with various bosses changed once I didn’t “need” my job (or prospective job).

    Real negotiation does not happen if you are not an equal to the person you are negotiating with. If you “need” a job, you cannot realistically demand better conditions, better pay or better assignments.

    Once I was able to negotiate on a more equal plane, I was shocked at how much I was able to negotiate in hours and pay.

    • Chris Mamula says

      The crazy part is that my wife and I intuitively knew this. Being debt-free early in life gave us the option to choose jobs that we wanted and had long-term upside out of school, versus chasing the highest paying jobs in the short term. As we built wealth and paid off our house, we realized we didn’t need as much pay and I started cutting back my work responsibilities and negotiating away pay raises in favor of getting more vacation time. My wife negotiated to work part-time, with benefits and never went back to full time work after the birth of our daughter.

      Still, we were stuck in the idea that we had to retire for a while because . . . that is what people do. Traditional financial advice focuses on retirement planning. FIRE blogs accelerate the process, but traditionally focused on the RE as the ultimate goal.

      It took a while to realize that we didn’t need, or even really want, to retire in the traditional sense to have the things we really wanted out of life. Focusing on the FI and creating meaningful work without having to worry about the financial aspect, was incredibly freeing once we finally connected the dots.

  3. So beautifully said. Financial independence is about having freedom of choice.

  4. Great read. So true how having the confidence to speak your mind and share your ideas/opinions makes you more valuable at work.

    Not quite at FI but working on it. Most of my savings is in 401k. Do I need to somehow account for the fact that it is pre-tax dollars when calculating 25x annual spending?

    • Chris Mamula says

      Great question. These stages of FI are a great starting point and way to look at how your options increase and your risk decreases as you build wealth. If you want to actually retire in the traditional sense, they don’t work well and you need to do more detailed analysis of what types of accounts your money is in (pre-tax, Roth, taxable), what percentage of your portfolio you have in each, what you plan to spend in retirement, your age related to if/how you will access money in tax advantaged accounts, etc to develop a plan to get money out of the accounts in the most tax efficient manner.

      Money in tax-deferred accounts will generally be worth less than money in Roth accounts, but in some instances you will be able to get the money out tax free and for some people with a lot of income and living in a high tax state you may pay higher rates than when the money went in. It is highly dependent on your individual situation.

  5. This seems like a great list Chris except “3) Hitting Six Figures”. Our lives are unique and not based on medians or averages. A 6 figure net worth where I live (San Francisco Bay Area) does not go far. In fact, households making $117K are considered low income here.

    Of course, the irony is not lost on me. I came to this country all by myself from a 3rd world country, with only $1K and a dream. Looking back it now all seems so unreal having achieved Financial Freedom in 12 years. Huge fan of this site and Choose FI so looking forward to reading the book

  6. Good post Chris – I was just interviewing Rob Berger from Dough Rollers and he measures the stages in a similar way – along the lines of visibility – 1 month, 3 months, 1 year, 3 years, 5, 10, forever (I may not have the time intervals exactly right).

    • Chris Mamula says

      Yes. Just interviewed Rob here last week as well. He wrote an interesting book. I particularly found his idea of the “5 Lies” compelling.

  7. Wade Shanley says

    Timely article. While on paper I hit FI with cushion this month.. and paid off the house…Im going to take the next year to see what a full year of spending looks like… I also have some expensive habits/hobbies I need to reign in (Wine collection), Travel, eating out a lot etc…that sort of inflates my discretionary spending. I need to model out a fixed income budget and see how painful it is to stick to. What most struck me about the article is how FI can change your work attitude. I can take a “no Im not doing that call at 10pm” stance now where I couldn’t do that in the past. I’m not going to be a jerk about it but I’m going to set some hard boundaries on work life balance. It’s hard to break this habit of being on call 24×7 but Im going to try to shift gears at work and see what happens. worse case someone forces my hand and I get a nice severance.

    • Chris Mamula says

      Agree Wade. As noted above, I kind of got this intuitively early on, when I used my financial status to negotiate more favorable work conditions, but actually lost sight of this as I got serious about retirement planning and scared to pull the cord. It’s important to keep these ideas front of mind wherever we are on the path to FI.

  8. Good luck with the book, looking forward to it. Will it touch on healthcare expenses at all? Unfortunately, that piece of the expense bucket isn’t an easy one to predict.

    I had a short battle with that anxiousness and feeling of being trapped. Thankfully, I was able to get past it by switching jobs and moving to New England. I am now enjoying work much more while still positioning for early retirement.

    Take care,


    • Chris Mamula says

      We do, but it is difficult in book format b/c who knows what US health insurance will look like in 10, 5 or even 1 year from now. So I outline the options with pros and cons as they currently are. Then Jonathan and I, who each have backgrounds in different health care fields lay out how FI and a healthier lifestyle can be interrelated.

  9. When talking about getting to 25 times your yearly expenses, you mention your investments have to get there in one part, but in another part your assets have to get there. I count the equity of my house (~27 of my assets) as an asset but not as an investment. Could you clarify more? Thanks

    • Chris Mamula says

      Great question Diego. My next regular blog post is already written, edited and scheduled to publish on 10/14. It’s tentatively titled “How Does Home Ownership Fit Into An Investment Portfolio and Financial Plan?” and addresses that exact question in great detail.

      Or you can ignore the last 2 sentences and I’ll tell you I custom wrote that post just for you! 😉

      Either way, stay tuned.


  10. Dances With Fire says

    This is a Great post Chris. Many people are looking for what FI truly means for them and how that can be measured. We need to redefine the word “retirement” which confuses many people of what their true goals are. Many who “retire” often find themselves bored with no purpose or new challenges. Those who focus on FI instead of just retirement often find those new challenges however big or small and gives a sense of purpose in our lives.

    Also it is important that we point out that “saving every dime” so we can “retire” at the expense of (most) everything else can be a trap as well and *working* one more year (or more) can and is an option for many close to FI. FIRE is a worthy goal however, the focus should be on the FI so we can enjoy today as well as RE.

    • Chris Mamula says

      Agree with you at least 99% of the way. Just to add a little nuance, many people feel trapped into “working one more year (or more)” because taking the leap into retirement is scary. For many (most?) people, it doesn’t have to be this all or none decision. FI gives a tremendous amount of power and leverage to negotiate for better working conditions and/or the courage to start a lifestyle business with the freedom to fail without destroying your financial life. Work that you want to do, rather than work that you have to do is dramatically different. We tie these ideas together later in the book.

      Thanks for reading and taking the time to comment.


    • You don’t get to redefine the word “retirement”. It already has a definition.

      I’ve been saying this for years, and urging you all to find a new word. I think I found one on a retirement forum that I participate in:


      Please consider using it.

      • Chris Mamula says

        I’ve come to agree with you on this one Larry. It’s why we simply focus on FI and the benefits that come with it, rather than continuing the arguments over whether someone is “really retired” which are frankly kind of a waste of time.

        Retirement, in the sense of never doing productive work and never earning income is probably not the right goal for many (most?) people. Retiring from all productive endeavors leaves many people feeling empty. Having no income can introduce financial stress and a feeling of scarcity.

        However, there is definitely value in understanding where you are in the phases of FI and whether you are in position to be able to retire. The fact is that many people don’t get to make the choice to retire, but have the decision to retire made for them due to health reasons, changes in their profession or the broader economy, etc. Achieving FI quickly enables you to make the choice to live life on your own terms, whether you choose something that looks like retirement to others or not.

  11. Connor Davis says

    “we are progressively gaining power and freedom along the path to FI.”

    That is a crucial observation, vastly more important than achieving FIRE. It changes your life in ways many and varied, but all good. For us, it became important when my wife had the freedom to leave a well paid job she hated and start her own business, which she loves. Next stage was getting rid of the mortgage and and having the power to put the mortgage check in savings instead of spending it on stuff or other debt. Both those things were quite a while back, but that same freedom and power has continued to permeate our lives in innumerable and wonderful ways. Finally, while age is pushing me to retire from my small business (which I have thoroughly enjoyed), I don’t have to give a rip whether I can sell the business or not.

    • Chris Mamula says

      Agree Connor. It’s funny, but I got this intuitively when I had no clue what I was doing with the technical aspects of investing, tax planning and preparing for retirement. As I gained financial literacy, I lost sight of the bigger picture for a while, so I think it is important to keep this front of mind at all stages of the journey.

  12. Chris, by your definitions above, I believe that we have achieved FI w/Cushion. Since the question was raised by Diego regarding mortgage equity and how that fits, I would ask the same of Social Security. After 34 years of working, we have saved assuming nothing from SS and still achieved FI w/Cushion. I guess it would make sense to include it as “Progressive Freedom” as we intend to start at age 70. We are both 56 and 14 years a lot can change. I want to retire at end of year, but HealthCare costs will take a big bite out of that nice cushion to cover 9 years before Medicare eligible…but then again the point of your blog is … I have the freedom to say F-U when I have had enough and can supplement my HealthCare with a self-employed or part-time gig doing what I enjoy!

    • Chris Mamula says


      The framework I set up in this post is more theoretical. If you desire a traditional retirement and plan to leave behind the workforce then you need to dig into the details of planning.

      Both Darrow and I have covered health care options. This included thoroughly researched articles I wrote a year ago about the costs of purchasing ACA insurance on the open marketplace and the pros and cons of Christian healths hare ministries in both broad terms and comparing the different providers. Darrow also has written about Social Security. You can find all of those articles by browsing around our site index, organized by topic.

      As you prepare for retirement, I would also highly recommend checking out Darrow’s book ( that covers that process in great detail. (Full disclosure, I don’t make any money recommending his book other than a few cents as with any book you buy by clicking through from our site, but he obviously does as the author.)

  13. It’s always important to keep these in mind as moving targets especially if your net worth is mostly tied up in something external, the stock market. There will be setbacks but its important to stay the course.

  14. Marlo Costa says

    Chris, Reading your article got me thinking… Someone (38 yo) with 800k saved (50% stocks and 50% rental units) that spends about 24K/year is in what category? Just wondering… As most people in this world (In my opinion) I am in a job that I cannot wait to stop doing but am still doing mainly due to fear.
    For the last year I haven’t seen any increase in my portfolio (except what I contribute and obviously rent money) so that makes me refrain from telling my boss what I really think about him.
    My brother tells me that I am more than ready to find another more enjoyable profession but based on last years returns I feel I need to stick to my high paying job (110k) for much longer

    • Chris Mamula says


      A couple of things I’d consider. The 4% rule (or 3.5% or 3% if you choose) is really a guideline rather than a rule and really is only valid for the portion of your portfolio consisting of stocks and bonds. For real estate, you could spend your cashflow without worrying about fluctuations in the underlying asset (rental units) until you are ready to sell them. That would likely be greater than 4% assuming they are quality rentals.

      It sounds like you are in a good position at 38 to start looking for different/more rewarding work options as your brother is suggesting, but I would think it would be tough to retire completely with the assumption that you’ll only spend $24k/year forever. I don’t know your whole situation, but it would not be outrageous to assume you’ll pay $20k/year if having to pay the full cost of health care premiums for a married couple, possibly more as you age.


      It sounds like you’re relatively early in the planning process. I think our Choose FI book will give you a solid foundation. If you desire a more traditional retirement, I would recommend Darrow’s Can I Retire Yet? book linked in the sidebar.

  15. Agree 100% that thinking of FI in stages is a game-changer. I had all or nothing thinking early on (mass media encourages that with the well-worn playbook: get a job, save in a 401k, then retire in your 60’s). But once I realized that there are different types of FI, then it opened up a lot more options. In our case, we have the ultimate FI, which includes multiple residences and lots of slow travel and first stage FI, which is one residence in a low-cost geography and the basics taken care of. Getting from the first stage to the ultimate can absolutely be a mix of work and play. Reaching first stage FI gave me the courage to choose only passion projects for work and it’s made all the difference.

    • Chris Mamula says

      I love the way you frame that. I’m a bit beyond your “first stage FI” and am very comfortable with a more relaxed pace and much less income while allowing our investments to grow toward “ultimate FI” as you have achieved. Well played!

  16. I’m in the home stretch, closing in. Paid off the cars and the house, put the kid through college. I am a rare bird with a pension, it would be only 50% of my salary if I leave now, 60% if I stay 4 more years. I have quite solid pretax and taxable investments that would make up the difference for leaving early and having that gives me a sense of FI. If I were to stay the total 4 years I would be at Fat FIRE, having an extra cushion to remain in a HCOL state. This gives me a powerful feeling at work and if things get really bad (politics and poor decisions in my profession) I just might exit early, having both choices is liberating!

    • Chris Mamula says


      Congrats on putting yourself in such an enviable position and giving yourself options!