The Swan’s FIRE Prowess Gauge // Savings Rates be Damned

Hello folks! How’s it been lately? I have a new concept to share with you all. I’ve been known for doing this before. If you’re a regular reader, I’m sure you recall my 4-year goal to double investments as well as my FIRE-Starter inflection point. Well today I want to introduce you to the Swan FIRE Prowess Gauge!

What’s this you ask? Quite simply it is a tool to measure how efficient you’ve been in chasing your FIRE (Financial Independence / Retire Early) ambitions. Not sure if you are on the path toward FIRE or not, find out here!

I’ve intended its design to be universal and agnostic to income level, how costly or frugal your lifestyle is, and your current net worth. As a good friend has wisely advised, reaching FIRE is all about how well you Earn, Save and Invest. If you do two of them well, you’re doing good; have all three going right and you are set! So why not create a system to measure this? Hence, the Swan FIRE Prowess Gauge; a measure that takes into effect all three keys to retiring early!

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

For example, let’s assume you want to measure your Swan FIRE Prowess over the last 5 years. What was your income over those years? For easy reference, I’d use your Adjusted Gross Income from your tax return. We all keep our tax returns handy right? No…well then sign into My Social Security and use your reported income.

Either way, the starting point is before tax income (including FICA taxes). For the sake of simplicity, let’s assume that is $375,000 over 5 years (or an average of $75,000 per year).

The next step would be to determine the change of your net worth over those five years. If you already track and monitor your net worth regularly via spreadsheet or easy and free tools such as Personal Capital, then this will be easy to determine. Take the period ending net worth minus the beginning net worth over the 5 year time-span. To continue with our example, let’s assume your net worth increased $275,000 over those 5 years.

The resulting Swan FIRE Prowess = 0.73! $275,000 / 375,000. Easy calculation right?

Why the Swan FIRE Prowess

The Swan FIRE Prowess calculator is an ideal gauge no matter how much you make or how big your net worth is. By making the change in net worth relative to the income over that period of time, it’s a factor showing how efficient your lifestyle is compared to income (reflecting how well you do at Earning and Saving) and how well you do putting your net worth to work for you via investments. Earn, Save, Invest!

  • Granted, there are going to be bad years in the stock market so year in and year out the Swan FIRE Prowess could be volatile. But over a 5+ year span, the gauge can be quite telling.
  • Are you making enough to fuel your early retirement aspirations?
  • Is your lifestyle expenses in check…it doesn’t matter if you make a fortune or entry level wages right out of college?
  • Are you putting your money to work for you in a safe, but effective manner (stock market, real estate, small businesses, etc)?

What does your Swan FIRE Prowess mean? And now what are you supposed to do with that info? Well measure it over time to track the trend or how certain factors can affect it (such as a promotion or a more frugal lifestyle).

The Swan FIRE Prowess Can be Ruthless

As you age and presumably make more money, you’ll also have higher taxes, not only in nominal dollars, but also as a percent of income. But maintaining a frugal millionaire lifestyle should allow ever increasing contributions to investments. But is that the case…let the Swan FIRE Prowess be the judge, jury and executioner!

With relatively lower wages there is a greater emphasis on maintaining a lower cost of living in order to contribute to investments. Lucy and I weren’t raking it in from 2007 to 2011, but we kept our cost of living low as you can see in my post on our financial wallchart. Even so, we managed to invest and get that snowball rolling.

Are you rolling in the dough, but only putting it in low yielding savings accounts? That will make FIRE all the more difficult. Risk tolerance comes into play with investments, but if you’re a long term investor (5+ years), you could REALLY find a better way to put your money to work. Investing doesn’t have to be difficult. You don’t have to be an investment guru to do well. For example, I’ve done alright over the last decade with my investments primarily in low-cost index funds.

How’s My Swan FIRE Prowess?

Well it didn’t start out good…I can say that much! From a year to year basis big swings can be seen depending on any of the three factors. For me, most the change year over year comes from the stock market performance.

In the chart below, I start with 2008 as that is the year my wife Lucy and I married and the earliest to which I have all the necessary info to compare accurately on an apple to apple basis. As we all know, 2008 was not a good year for the stock market! But 2009 was, and 2013 was even better.

FIRE Prowess

That’s why a 5-year rolling Swan FIRE Prowess gauge or longer can be more telling about your progress toward FIRE. On that basis, I’ve been a consistent performer near the 1.0x mark. What this means is that I have historically, and consistently, increased my net worth on a yearly basis by my pre-tax income. Once I hit my FIRE-Starter, it will be even easier for me to achieve >1.0x as my investments bring in more and more on a tax efficient basis and driving bigger and bigger increases in my net worth.

FIRE Prowess

How to read your FIRE Prowess Gauge:

It’s hard for me to be judgmental. I have always had a strong interest in personal finance. I started investing before I even graduated college. While Lucy and I haven’t always made big money, we also haven’t really made any big mistakes on our journey toward FIRE. Lucy and I reached millionaire status by age 30. Not to toot my own horn, but I would consider my FIRE Prowess to be relatively high compared to the general public. But compared among others on the road to FIRE, I might be middle of the pack.

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 which Joe at Retire By 40 recently wrote about. This is certainly a tough milestone to reach, but maybe one day I can make this claim!

One note that might be worth noting at this point is that the Swan FIRE Prowess Gauge is a tool for those still on the road to FIRE and earning a wage. The calc gets skewed once you are retired and no longer pulling in a working wage; plus your numerator will be screwy depending on how much you withdraw, etc.

We’re in the Trust Tree!

I view the Swan FIRE Prowess Gauge as a tool not that unlike how many folks calculate their savings rate, except the Swan FIRE Prowess Gauge actually means something. It is an easily comparable measure and it is relative across income and lifestyles and ages. For instance, I can easily compare my Swan FIRE Prowess from 2016 to when I first started out in 2008 and because the gauge is relative to my change in net worth it brings them in line and measurable to each other.

You can even compare your score to others to see how you’re doing. Like I said above, compared to the general population my Swan FIRE Prowess is likely high, but compared to others on the path toward FIRE I am nothing special. I guess I won’t know for sure though until I hear from you all…but don’t worry, this is a safe place…

FIRE Prowess

Compare all you want! Use the Swan FIRE Prowess as a tool to measure your own prowess, how it has evolved over time (hopefully improving over time!), and to learn from others as you strive for self-improvement.

If other FIRE bloggers out there want to calculate and share your FIRE Prowess score either in the comments or a future article, that’s great! And if you let me know I will link back to your article in this post for folks to reference, learn and grow. That’s what’s great about this FIRE blogger community, we are all here to encourage others.

If you want in, here’s all you need to do:

  1. Write a post on the topic, run your numbers, give some commentary on how accurate a gauge you think this is.
  2. Include a link to every other blogger who has written ahead of you in The Chain somewhere in your post.  
  3. Tag all other bloggers ahead of you in “The Chain Gang” via Twitter when you finish your post (this will take several tweets as the chain grows).
  4. As a courtesy, attempt to keep “The Chain” updated in your post as others join behind you.  Give them a backlink.  This isn’t mandatory, as it’s a bit burdensome, but you’re encouraged to support the request if you can.

Readers are also welcome! Two readers have joined the fun as shown below. Feel free to email me your figures at [email protected] if interested.

  • Daren: FIRE Prowess Score 2016: 78% Lifetime: 47%
  • Todd: FIRE Prowess Score 2016: 75% Lifetime: 29%


Time to be honest with yourself, how’s your Swan FIRE Prowess? Are you doing what you need to to retire early or are there changes you can make to correct your path toward FIRE?

What do you think of the Swan FIRE Prowess? Any suggestions you have to improve it and make it an even more useful tool? Let’s talk about it in the comments below!

Thanks for taking a look!

The Green Swan
















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  1. Ooooh, I love it! I like that the FIRE Prowess calculation will pit net worth increases against income. We often find that our net worth increases… but we have a high combined income for our area so I think this will give us the “ruthless” (great word!) truth. Looking forward to utilizing this calculation!

    1. Awesome! I’d love to hear how you’re doing. Like you said, your net worth growth may be great because of your income, but maybe there’s still room to grow. Thanks for the comment!

  2. Great concept, JW! I’ve emailed it to myself, and will have a look at my numbers after we return from vacation next week (we’re heading to The Bahamas tomorrow, think that’ll hurt my 2017 FIRE Prowess score? Very creative, and I like how it measures net worth growth vs. income. I suspect I’ve over 1, but will have a look at the numbers. Hmmm…perhaps a future post? (Ah, another Drawdown Chain, perhaps?)

    1. Enjoy your trip but not too much or your score will certainly take a hit :)!

      I’d love it if you wrote a post. Let me know and I’ll be sure to link to it!

      Thanks Fritz.

  3. This looks like a great calculator. I am interested to see my score based on these different variables. I have not seen a calculator that uses this formula.

  4. That is a nice one. It captures in one number how much you save and how much your investments yield compared to income. I like it a lot.

    For 2016 we are approx at 0,6. 2017 will be lower, as we plan to spend more on holiday.

    1. That’s great ATL. And understandable for 2017 as it is by design that you’ll focusing more on family and enjoying life. Thanks for sharing!

      1. The high tax bracket we are in (50% for everything above 38K) does not help a lot. And also, we are still to conservative in asset allocation… changing that in 2017. Would be great to organize a yearly publishing moment

        1. Yeah I figured the high tax would have a factor too! And that is high! State and federal marginal tax is in the low 40%s and that is even much more graduated over rising income. Thanks for sharing!

  5. Just calculated mine (roughly), looking at our AGI from our tax returns and my net worth tracker (which is pretty conservative):
    2014: 66%
    2015: 46%
    2016: 45%

    Seems a bit off, actually. 2014 looks good, but that’s mainly because I lost my job in May (and didn’t get a new one until March 2015) so our income was low (even as our net worth somehow climbed thanks to retirement accounts/rental real estate values rising, and the fact that we mercilessly cut expenses). 2015 was an excellent year for income and net worth growth — I was a bit surprised to see it lag like that. Ditto 2016 (an even better year for both income and net worth growth than 2015).

    Then again, I’m still ramping up my net worth. I imagine that, soon, the retirement accounts/investment accounts will grow of their own accord quickly enough to outstrip my income, which will be nice.

    1. Hmm interesting, I guess the income was growing faster which isn’t a bad thing. Like you said, your net worth will catch up soon and really start compounding. Thanks so much for sharing!

  6. i am totally jazzed by this statistic. however, market volatility in asset classes seems likely to skew the result. right now it makes those in the market look like rock stars, but in 2008 looked inordinately bad. (ferinstance, my extensive tulip bulb and beanie-baby portfolios may be poised for recovery…) Perhaps some kind of Schiller-like cyclical adjustment is needed.

    Another consideration is tax status of accounts. My Roth is worth more than my HSA that’s worth more than my traditional IRA that’s more than my 401k.

    1. Yeah exactly, any single year can have some massive volatility! It should average out over time though. Glad you like the calc!

  7. Is there a reason why you chose before tax income? it seems to me that using after tax/take home will remove one more variable from the number making it better for comparison, just really focusing on how efficiently you save whats left.

    I guess the only difficulty I see is separating tax related to work income with tax applied to non-registered investments?

    1. A couple reasons really. I think it’s actually cleaner and easier to use with pretax income especially with employer sponsored tax deferred retirement accounts like the 401k and pretax purchases such as health insurance.

      Also, tax is something we can get creative to legally reduce and control. For instance I received some big federal and state tax credits when I bought solar panels and others have received them for energy efficient cars and appliances.

      Last thought on that is that we do get benefits from the government for taxes paid. And those taxes paid can come in the form of income tax, real estate, sales, etc and that can all vary by state. And the benefits can come in various forms.

      There may be other reasons I can’t think of now, but for your own personal tracking and use of the calc you should feel free to use what’s most appropriate and meaningful. No argument from me on that. I’m just glad you’ll have found a good use for the FIRE Prowess Gauge!

      Thank you for the thoughtful question!

  8. I really like this.

    This completely eliminates all the gray areas and confusing exceptions that come with trying to calculate a “savings rate” (I gave up a long time ago).

    The only weakness I see is that it’s looking at pure net worth growth. There is no regard for strategic asset allocation to optimize the withdrawal sequence.

    Not all net worth is equally easy to retire on.

    To be fair, if you can hit the magic number, you’ll most likely be fine.

    But sequence of return risk and the logistics of monetizing some of the less liquid asset classes (like your house) are ignored at great peril.

    These variables are unlikely to be easily captured by a simple ratio anyway, so it is a petty complaint.

    As I said before…I really like this.

  9. I like it, especially the 5 years rolling calculation. We’ve been doing pretty well and our number has been over 1 for a few years now. That’s strongly dependent on the market and economy, though. The 5 years rolling gives you a better long term picture because a downturn usually last less than 5 years. It’d be interesting to see what this number look like over the long term. It really should keep increasing as passive income kicks in.

    1. Yeah I agree, that’ll likely be the case. The true test is when a downturn kicks in. Glad you liked the calc!

      Thanks for the comment, Joe.

  10. Great article. I’ve done it 2 ways. As a total over the 4 years from July 2013 to July 2017, we show an overall 0.75. However since I started reading all these FIRE blogs last summer, I am obviously far more aware of my money, because over the last year we managed a pretty good 1.14. (and as we are already FIRE, technically we don’t need to, but it is obviously a really good practice!)

    My lifetime earnings one is surprisingly good…. It comes out at 0.77, now bearing in mind we had 2 kids and put them through fee-paying school from 5-18, and through university debt-free, that is pretty amazing! It definitely shows the power of compound interest!

    1. That is really impressive! Good for you folks. Is the lifetime calc based on your earning years or does it include post retirement years too? The calc does get a little fuzzy and skewed in post retirement years. It obviously only goes up after retirement (assuming the market behaves).

      Thanks again for sharing!

      1. Lifetime includes retirement years. Some time ago I was on a mission about the amount we paid in taxes, so I documented every year from when my husband started earning in 1971 to now -2017. I only started earning in 1977 – my salary was £1,3k as a graduate computer programmer, my husband as a graduate engineer got £2k. But then we bought a 3 bedroom house for £15k. So even then houses were still a pretty good stretch. Inflation was running about 15%! Our tax laws in UK are different from yours, we don’t have the same opportunity to flex our tax. We get all our income post-tax.

  11. Congrats on getting Rockstar’d today! I just ran my numbers (.44 lifetime, .57 in 2016). I’m working on a similar blog post to share this awesome new metric, will link back to you. Perhaps we’ll start another “Chain”!

    1. That’d be great, Fritz! Thanks for sharing. I’ll get it linked up as soon as you post it. I look forward to giving it a read!

  12. We got married about a year ago, so we only have one year of data as a couple, but my husband and I are clocking in at 1.14. It’s been a great year for the stock market, so I don’t want to get too excited.

  13. Nice calculator. The great thing is that I have been tracking income for the past 4 years, and networth over the past 11 years, so this is a simple add-on to my normal annual tracking. Here are my calculations:

    2013: 126%
    2014: 75%
    2015: 74%
    2016: 158%

    As I look at this, the biggest contributor (about 40%) is vested stock options, which by their nature is pre-tax, so it’s being skewed upward.

    1. Perfect! That’s the benefit of keeping tabs on your finances. And no surprise you have a high FIRE Prowess! Keep up the good work.

  14. JW, hold onto your seat. I’m going to launch this as a “Chain Gang” initiative with a post on my site next Tuesday. If we have any luck we’ll have 20+ bloggers all calculating their scores, and providing their commentary on how accurately it reflects their opinion on how they’re doing on their journey toward Financial Independence.

    This is a great tool. I applaud your creativity in designing it, and give you the credit as it (hopefully) rolls across the land…….

    1. Thanks Fritz! I appreciate you picking up the torch and running with this. I look forward to the chain gang growing and providing great insights for others/readers on their road toward FIRE!

    1. That’s great! If you have it posted already with the chain gang links listed then the next step is tweet it out to everyone (may require more than one tweet to include all the bloggers). Then you will be official and we’ll add your link to our lists. Let me know if that doesn’t make sense. Thanks for joining!

  15. As I was working on my number, I realized that the ratio and buckets work as a net worth velocity type metric, but the lifetime number is J Money’s Lifetime Earnings Wealth Ratio. If there are a lot of student loans, the lifetime number will be low or negative, even though the current number is high.

    1. Sorry Jeff! I must have missed it somehow. Did you get my Twitter handle right? I’ll take a look at the post and get you added, thanks for the heads up. If you don’t mind tweeting the others in the Chain already it’ll help ensure they all get your added as well.

  16. Thanks for sharing this great tool with the FIRE community!

    For 2016 I was at 119%, and lifetime (since 2001) I am at 57%.

    I just posted an article with my results to my blog and tagged the rest of the chain in Twitter. Hoping to be the next link in the chain!

  17. Thanks for creating and sharing this awesome tool. I learned so much about FIRE from reading this post and all of the others in the chain. I’m not necessarily focused on FIRE at this stage in my personal finance journey (still trying to get from under massive student loan debt) but it was interesting to crunch my numbers (28% 2016 and 29% lifetime) and post them for everyone to see and compare. This has definitely gotten me motivated to pay off my debt even faster so I can start thinking about the next phase in my journey.

  18. Interesting formula. Of course, using AGI artificially lowers true income as it misses pretax 401k/403b type savings not to mention matching and/or profit sharing. Also, what are you using as your net worth? I understand the pure definition of net worth, but are you actually including home equity? And if so, how do you determine that? Purchase price minus mortgage or current price (Zestimate, for example)? Also, how about 529s or UTMAs? The results of the formula can vary quite a bit depending on these variables. Although, as long as one is internally consistent, can be useful to monitor changes over time.

    1. You are right. My intent was to find a simple income number that was simple to find, a standard number, and something that is comparable year to year. Let me know if you have a good alternative.

      I include home equity in my net worth, definitely. For me, buying a home is just as much a financial decision as a lifestyle one so it is important to include. I put in a fair estimate for the value, not simply the purchase price. Zestimate less 10% (to be conservative and an estimate for realtor fees, etc) would be a suggestion in estimating the fair value you could expect to get out of your home.

      I include my kids 529 accounts as my assets. They are 3.5 and 0.5 y.o. We’ll see if they use it or not, but they are my funds until I choose to pay for their college as I’m the account owner. And I can change the beneficiary back to me at anytime.

      Good questions. Feel free to do whatever you think is best in determining income / assets, this is simply what I do. But like you said, either way the gauge can be quite informative for you if used in a consistent manner.

      Thanks for the comment, Bmac!

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