Thinking about progress towards FIRE using levels

There aren’t a lot of good milestones to celebrate while navigating through the “boring middle,” on the way to FIRE. There are certainly big milestones to celebrate like zero net worth, buying a house, reaching our CoastFI number, or having one spouse become work optional, however on a timespan of decades these are still few and far between.

Recently I realized if the goal of FIRE is to save 25x our yearly expenses (i.e. enabling a 4% withdrawal rate), then I could think of each of those multiples from 0-25 as “levels” on the path to achieving FIRE.

This number has a few nice benefits. First, it encapsulates both income and spending habits, so earning more but also spending more due to lifestyle inflation results in not advancing up to further levels. It also is invariable to absolute amounts, so the level means the same thing for people pursuing LeanFIRE vs. FatFIRE.

Thinking about it this way isn’t perfect, though. Using a linear 0-25 scale doesn’t capture the reality that every subsequent level is logarithmically easier to achieve due to compounding (as long as our expenses grow more slowly than our investments). It also doesn’t take into consideration future fluctuations in spending, like for college or healthcare.

I like being able to think about our FIRE progress this way. It lets us track our progress on a more granular level and gives us many more opportunities to celebrate. :)

This is not financial advice.