The FI Equation
A way to think about how your decisions shape the outcome
The FI Number
Financial independence (FI) is usually framed as a number. Once your savings reach it, you no longer need to work unless you choose to. Save enough, hit that number, and you’re done. You’ve arrived.
Arrived at what, exactly?
My wife and I honeymooned in Italy and have managed to get back a couple of times since. There’s something about sitting in a piazza with a glass of wine or a small cup of espresso that we’ve never quite let go of. It’s easy to romanticize. And honestly, I’m not sure it’s entirely off the table as part of what retirement looks like for us.
But it couldn’t fill the whole thing.
And that’s the problem with framing FI as just a number. It puts most of the focus on saving and not enough on everything else that shapes what you’re actually saving toward.
Rethinking FI
A better way to look at it is as something you’re constantly solving. Financial independence is the result of inputs—decisions, assumptions, tradeoffs—that produce a certain outcome. Through that lens, FI expands beyond just reaching a number and becomes more about understanding the variables behind it.
Most people focus on the obvious ones: income, spending, time, savings. The ones you can measure and even model. But they’re not the only variables that determine the outcome. Some of the most important ones don’t show up on a spreadsheet at all.
Thinking through what’s behind your decisions reveals what’s actually driving the equation.
If you’re new to how the FI number is actually calculated and where it comes from, this is a good place to start before going further.
Where the FI Number Falls Short
The calculation gives you a starting point. But treating your FI number as the destination comes with limitations.
That number is built on assumptions. Will they hold for 20 or 30 years? Priorities change. New decisions are made. The version of you that calculated that number may not be the version of you living it.
I’ve lived through one major market-moving event after another. My first accounting job came right before the 2008 housing and financial crisis. I had to change jobs. Then a global pandemic shut down the world in 2020. How I worked changed.
Markets, jobs, health—they all can change. No plan plays out exactly as expected.
The problem isn’t calculating a FI number. It’s treating it like the answer. Financial independence evolves as your decisions do, requiring flexibility.
Embracing Flexibility
Don’t get me wrong. I enjoy calculating my FI number. It’s one of the first things I did when I started thinking seriously about retirement. And I still revisit it.
As an accountant, I enjoy that part. As long as I don’t pull my wife into the details too often, she’s perfectly happy to let me fixate a little too much over our finances.
When we reach our FI number, how many of us will actually say done? More likely we hesitate as the fear of being wrong creeps in. Maybe our savings should be a little bigger. Maybe we should work a little longer.
I’m guilty of this myself. Every few years I revisit what it would take for me to feel secure, and without fail the number goes up again. Sadly, I never seem to consider that we might need less. Some of that is lifestyle as our spending has grown over the years. But a lot of it is because I want to know that if I retire early, my wife and I won’t end up in a bad spot. So I build in more cushion. And then a little more.
I’m not sure the number will ever feel final. That might just be part of it.
But I treat it as a tool, not a destination. Just one variable. One input that shifts as everything else does.
Your FI number is the result of multiple variables: income, spending, time, priorities. Those things can and will change. And that’s the point.
It means you have options.
Financial independence needs to be about more than solving for a single number. It’s about understanding how your decisions, assumptions, and tradeoffs shape the outcome. And being willing to adjust as they do.
That’s how you start to build the FI equation that fits your life.
— Brad
New here? Start here.
Or read more at The FI Equation.
If this way of thinking about financial independence resonates, subscribe to get future posts like this.
This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice (see full disclaimer).