3549: [Part 1] How I Measure Progress Toward Financial Independence by Craig Stephens of Retire Before Dad

Optimal Finance Daily - Financial Independence and Money Advice

Optimal Living Daily LLC

Education, Investing, Business, Self-improvement

4.5 • 1.3K Ratings

🗓️ 5 May 2026

⏱️ 13 minutes

🔗️ Recording | iTunes | RSS

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Summary

Discover all of the podcasts in our network, search for specific episodes, get the Optimal Living Daily workbook, and learn more at: OLDPodcast.com. Episode 3549: Craig Stephens breaks down a practical way to track financial independence by combining passive income with long-term investment growth, rather than relying on a single metric. This approach offers a clearer, more flexible path to early retirement while reducing risk and increasing confidence in long-term financial security. Read along with the original article(s) here: https://www.retirebeforedad.com/measure-financial-independence/ Quotes to ponder: "If I can create enough investment income that consistently grows above the rate of inflation and covers a solid portion of my living expenses, I can tap less of my retirement savings and reduce sequence-of-return risk." "Financial independence is a financial milestone. Retirement is when I’ll stop working completely." "The FI number is about building a lump sum of money that equals 25 times your annual expenses." Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Hey, it's Justin from Optimal Living Daily. Before we start, I want to share a super powerful practice I use called
0:05.7	NSDR, or non-sleep, deep rest. In just about 10 minutes or so, this yoga nidra practice
0:11.6	leaves you feeling as refreshed as after a nap without actually sleeping. Experience it for yourself
0:18.5	on our guided podcast. Search NSDR and look for the one from Optimal Living Daily.
0:26.2	This is Optimal Finance Daily, How I Measure Progress Towards Financial Independence, Part 1 by Craig
0:33.2	Stevens of Retire Before Dad.com. This article is about how I measure progress towards financial
0:40.4	independence, which I consider a prerequisite to my early retirement goal. The terms financial
0:46.6	independence and early retirement are often used interchangeably, but I consider them different.
0:53.1	Financial independence is a financial milestone. Retirement is
0:57.0	when I'll stop working completely. I plan to reach financial independence before early retirement.
1:03.5	That's my own fiber movement, not to be confused with the fire movement. Financial independence
1:09.8	is achieved by one, building enough passive income
1:13.2	to cover annual expenses, or two, building a lump sum of savings and investments, the fine number,
1:20.2	to cover living expenses in perpetuity, or three, some combination of number one and number two.
1:28.0	Using passive income involves building a portfolio of real estate, dividends, business income,
1:33.3	or other income streams to cover living expenses.
1:36.9	Ideally, these income streams are outside of retirement accounts, so they're easily accessible
1:42.0	before age 59 and a half. FI number is about building a lump
1:47.2	sum of money that equals 25 times your annual expenses. So if you spend $60,000 per year,
1:54.1	your FI number is $1.5 million. In the calculation of my financial independence number,
2:00.0	I use a combination of both the amount
2:02.4	earned through sustainable passive income streams and the lump sum of all of our retirement
	...

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