The only way is up – Amber Index

For almost 2 years now, I have been using the Amber index to track our progress towards FI. With this index, I can keep my numbers private while still discussing our progress. With the extra experience and insights we have now, it is time to update the index.

Here are the changes

  • At the core, the Amberindex remains an implementation of the 4pct rule. We will keep it like this, even if we know it has its limitations. As soon as we are within 20 pct of our goal, we look to refine this. The Amber index now tracks the progress compared to more realistic yearly expenses. It also differentiates the expenses with and without mortgage.
  • The company pension – this is an extra legal pension we have in Belgium, not as good as a 401K, still extra money – is now part of the amber index. Just note that we can not touch this money before the age of 67. When you do sooner, you are taxed as if you do something evelish!
  • Money in our travel fund is now excluded. As we plan to spend all of this, it is not money that can be used to sustain our daily living

What did no change?

  • We still exclude the mortgage open amount and the market price of our house. I can not sell a piece of my house to live from. When we would have rentals, those would be included
  • The emergency fund is not part of the amber index. This is up for debate.
  • We do not include our car, bikes, electronics,…. We have no collectibles that are wort mentioning as assets.

Where does that leave us?

Over the past year, I have been tracking the old and new definition of the amber index. I can thus now present a graph.

Progress towards Financial Independence


Some observations

The trend over the last 14 months is positive. This has 2 main reasons

  • Our savings rate: we do live below our means and have avoided lifestyle inflation
  • The markets: they only go up. Then again, what goes up must come down one day

The spike in January is due to a windfall. Life throws curve balls, live sometimes brings you flowers. We have had both already…

As expected, the target expenses are higher than the current expenses. The only reason for that is the mortgage payment. Oh boy, I do look forward to the day that these two lines meet! That must be the best meetup in life!

What does your progress looks like?






12 thoughts on “The only way is up – Amber Index

  1. The updates make sense! Definitely conservative to exclude your emergency fund, especially if it’s a large amount. Depends on whether you’re accounting for those once-in-a-while expenses in your projections. Probably something to evaluate when you get closer to calling it quits.


  2. We focus our calc on invested assets only, no home value, cars or other assets included either. Hopefully the markets don’t have any major hiccups!


    1. Thx for the feedback. For the enxt version, I shall indeed add a short description. The graph show the evolution of the following equation: our assets/ 4pct rule assets.
      On purpose, there will be no number on the left hand axis.


  3. Congratulations on your windfall! We don’t include the value of our house or cars in our FI target number either because, as you observe, a million dollar house won’t buy you a loaf of bread.


  4. Up is good! Whether it by due to living below your means or markets going up. Keep doing what you are doing, it seems to work just fine!


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