How many years of spending have you saved?
How many years of spending have you saved and invested? Expense Multiple divides investments, savings, T-bills, and emergency funds by the past year of expenses, then places you on a path from Buffer to Enough. It is a Pro report. Educational software only, not advice.
- Investments, savings, T-bills, and emergency funds in the numerator
- The past 12 months of spending in the denominator
- Exclude categories, including uncategorized
- Seven levels, from Underwater to Enough at 25 times spending
What an expense multiple is
An expense multiple is money you have set aside, divided by a year of spending. At 1x you have about one year of expenses saved and invested. At 25x you are on the usual financial independence line, the same idea as a 4% withdrawal rate. Iron Wealth uses investment accounts, savings, T-bills, and emergency funds. Debt is not subtracted.
A trailing year, not the calendar year so far
A year that has only just started makes the multiple look huge, because little spending has been recorded yet. Iron Wealth uses the past 12 months, the same 1Y window as the rest of the app, and shows the monthly average under the total so you can check the spending number.
Seven levels, and what each one means
Underwater means those balances are below zero. Buffer is under one year of spending. Foundational is 1 to 4 years. Boring Middle is 4 to 10. Optimizing is 10 to 20. Preservation is 20 to 25. Enough is 25 and above. Open a level to read what that stage is, and what to do and avoid. It is a planning frame, not a promise.
Questions
- How is the expense multiple calculated?
- Total invested divided by the past year's expenses. Invested includes investment accounts, savings, T-bills, and emergency funds. Expenses are everything recorded over the trailing year, except categories you exclude. You can also exclude uncategorized spending.
- Is 25x the same as a FIRE number?
- It is the same idea. A 4% withdrawal rate is 25 times a year of spending. The FIRE planner in Iron Wealth uses that rate. Expense Multiple shows where you are on the way there, using the spending already in the app.
- Is the Expense Multiple report free?
- No. It is a Pro report in the Wealth section of Reports. Net worth, budgets, goals, and Finance AI stay in the free core.
- Does excluding a category change my FIRE number?
- No. Exclusions on this report are stored separately. Turning a category off here does not change Financial independence.
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