Which Assets Count Toward Financial Independence? A Real-World Guide

When I first started my journey toward financial independence, one question kept coming up: Which assets should I actually count? While tracking net worth is straightforward, calculating your financial independence (FI) number requires a more nuanced approach. Let me share what I've learned through personal experience and help you avoid common pitfalls. Photo by Suzy Hazelwood Understanding the Difference: Net Worth vs. FI Number Your net worth calculation is simple: Assets minus Liabilities. Everything you own and owe gets included. But your financial independence number? That's where things get interesting. The key principle is this: Unless an asset generates income or can be converted to income-producing investments, it shoul