What is the Swan FIRE Prowess Gauge you ask?
Silly mortal, it is the latest greatest way to measure you progress toward Financial Independence and Early Retirement! You can thank Green Swan for this concept and Retirement Manifesto for its appearance in chain form.
Over any certain amount of time, your Swan FIRE Prowess is equal to the change in net worth divided by your income over that same time period.
FIRE Prowess = Change in Net Worth / Total Gross Income
Luckily, I had over 10 years worth of Net Worth at my fingertips.
Here are my numbers in a fancy chart;
And How do you rate your Swan FIRE Prowess Score?, just refer to this handy key;
If over the last 5 years your FIRE Prowess is:
- Negative or 0.0x – Not even on the path toward retirement, let alone FIRE. If you aren’t saving and investing any money and your net worth isn’t growing then it is time to make some changes and develop positive financial habits. It may be a change to a frugal lifestyle or getting an advance degree to take the next step in your career.
- 0.0x to 0.25x – You’re conscious of your retirement and know you should plan for it, but early retirement may not be on your radar at this point.
- .25x to 0.50x – You’ve got the ball rolling and you’re certainly trying! Keep investing wisely, perhaps add a side-hustle or few lifestyle tweaks to lower expenses and FIRE can be within your grasp.
- .50x to 0.75x – You’re working hard toward your retirement goals! Early retirement is definitely possible. Keep working hard and that investment snowball will be rolling (compounding) in no time!
- .75x to 1.0x – FIRE is on your mind and you are performing in overdrive right now!
- 1.0x and over – You are killing it! Don’t make any stupid mistakes and FIRE will be within your grasp in no time. In this scenario, your net worth is more than your lifetime earnings.
After crunching the numbers, here are some stats for OthalaFehu’s progress to date;
Running 5 year average = 0.732%
Running 10 year average = 0.605%
Best Year = Well 2009 would have been at whopping 2.74% counting INHERITANCE from my in-laws, but I did my 2009 numbers ‘not including’ this to see what my ‘earned numbers‘ were. Otherwise, my best year was 2014 at a 1.08%
Worst Year = Duh, 2008 is a 0.04%
Average Year = 0.594%
Don’t forget to try out you personal Lifetime Wealth Ration as well.
Have you calculated your numbers? What are you waiting for? Come FIRE Walk with US!
The idea for this chain article came from Retirement Manifesto based an original piece by The Green Swan. Several others including myself have followed suit; BudgetonaStick, Shnugi, DadsDollarsDebts, DebtstoRiches, AdventureRich, FreedomisGroovy, WorkingOptional, BudgetsAreSexy, LifeZemplified, Physican Wealth, Married and Harried, Ms Liz Money Matters, ActuaryonFire, Trail to FI, Maximum Cents, Retiring on my Terms, Minafi, MilitaryDollar, FinanceYoSelf, 7 Circles, MoneyMetaGame, SummitofCoin, and PersonalFinanceJunkie.