Tracking The FI Crossover Point

How do you know when you’ve reached the point where work is optional?

Pioneer of the financial independence (FI) movement, Vicki Robin in her book Your Money Or Your Life, came up with a beautifully simple visual way to track your FI crossover point.

The exact moment where you go from being a wage earner to being able to live from your investments.

Financial Independence: Having enough money from investments to cover all your bills and discretionary spending so that you no longer have to go to work to earn money.

By following the basic steps in this article, you’ll be able to create your own FI crossover point graph.

At the end of each month by tracking your income, expenses and investments plus by keeping the information on display, you may find that you’ll be a lot more interested in your finances.

Vicki Robin writes, ‘If you see your life as bigger than your job and can conceive of having to work for only a finite and foreseeable period of time, then you are likely to be … even more highly motivated …’

Work will become optional at a much earlier age than traditional retirement if you invest for your future.

As a bonus to being able to retire early, you’ll also be helping planet Earth by being less of a consumer.

It isn’t just an odd coincidence that saving money and saving the planet are connected. In fact, in some sense your money is the planet…every time we spend money we are voting for the kind of planet we want to leave to future generations.

Your Money Or Your Life

You can choose to live your life working and consuming and still retire poor at 65 years old.


You can consume less, pollute less and save more to create a life where work is optional.

How To Track Income and Expenses

The easiest way to track your income and expenses is by using an App, preferably a free App.

I particularly like the Money Manger App due to its ease of usage, how it does all the calculating for you, puts spending into percentages and graphs it at a pie chart.

Money Manager App logo
Money Manager App

There are other money tracking Apps that will synchronise with your bank account to transfer your income and spending across and automatically categorise them.

You may be wondering, why bother? I used to as well.

We were already using a budget, tracking our net worth and calculating our savings rate so why we would need the daily hassle of explicitly tracking every single income and expense.

Turns out there was a very good reason to input income and expenses and it involves creating a graph at home to track the FI crossover point.

It also helps you to see where you can make improvements with your finances.

The Graph

To track your FI crossover point you will need to create a graph.

You could use a computer program to create and update the graph, however, Vicki Robin recommends making a large visual paper graph and displaying it on a wall in your home.

How to create the graph:

  • The vertical axis charts the monthly dollars from 0 to above your upper current earnings, per month
  • The horizontal axis tracks time in monthly blocks, e.g. Jan, Feb, Mar, etc
  • At the end of each month you’ll plot your income, expenses and investment income
  • For example, mark a dot on the graph to show your income for the month that corresponds with both the month and the $ amount
  • Then connect this dot with the previous income dot by drawing a line
  • Congrats, you are tracking your finances with a line graph!

By having this chart within easy view, you’ll be able to see at any time how your income, expenses and investments are tracking, notice any trends, and make improvements.

This simple snapshot of your financial life will help to transform your life in profound ways.

Your Money Or Your Life

Spend less, save more and watch that FI early retirement come your way.


Tracking income is the easiest of the three to manage.

Simply input your take home pay and any other sources of income that you accrue into a money tracking App, a spreadsheet, or a paper and pencil chart.

Only include earnings from dividends if you are spending them. If you are reinvesting dividends then they become part of your investment tracking.

At the end of each month you’ll record your total monthly income on the graph. The goal is for your income to increase over time.

Nina's wall chart with income for FI
Your Money Or Your Life: Nina’s Wall Chart with Income


Tracking your expenses for the first time may be very confronting!

Every purchase you make gets tracked and categorised. Suddenly, month by month, you’ll become aware how you are spending your money – and it may be a shock.

For example, you may feel uncomfortable at how much money was spent eating out, buying new clothes or on car repayments.

You could even discover that your expenses are equal to or more than your income.

If this happens to you it becomes an opportunity to change.

No shame, no blame.

Your Money Or Your Life

Look at each and every expense and see if you can reduce or remove it. Check out this article which lists 44 different money suckers of your income.

As with income, plot your total monthly expenses on the graph.

Nina's wall chart with income and expenses for FI
Your Money Or Your Life: Nina’s Wall Chart with Income and Expenses

See that gap on Nina’s wall chart between her income and expenses, that’s spare money for investing and building wealth.

Also notice how even though Nina gradually earns more money, her expenses stay the same. By keeping her same frugal lifestyle as she had when she was earning less, Nina was able to avoid a common consumerist trap – lifestyle creep.

It’s important to note here that frugality is not about missing out, it’s about being intentional with your money and not wasting it on frivolous things, so that you use your money for what brings value in your life. Frugal doesn’t mean a lack of fun or missing out!


This is where the magic happens!

The graph already has a line for income and another line for expenses, now it’s time to add a third line – the investments line.

Money from investments is a passive income requiring little input from yourself. It may come from shares or bonds, real estate, or wherever else you put your money to make money.

The most popular method with investing for FI is to put money into low cost index funds in the share market.

Then, using the Trinity Study recommendation of the safe withdrawal rate at 4% we are able to begin tracking investment income.

Similar to income and expenses, you’ll be tracking potential investment income. It’s going to require a simple calculation.

At the end of each month:

  • Add up how much money you have invested in the share market
  • Multiply this amount by 4% (safe withdrawal rate)
  • Then divide again by 12 (months)

For example, if you have $60,000 invested in the share market the calculation is as such:

  • 60,000 x 4% = 2,400
  • 2,400 รท 12 = 200
  • Which is $200 per month from investment income

Then, this investment income is plotted on the graph.

Nina's wall chart with monthly investment income for FI
Your Money Or Your Life: Nina’s wall chart with monthly investment income

Looking at Nina’s wall chart, you’ll see it now has a third line for investment income.

It’s interesting to note that for the first few months there is no investment income. Then by mid-December Nina’s investment income makes it onto the graph. Eventually, it increases as the money compounds and as Nina continues to earn more, spend little and invest much.

The Crossover Point

When your investment income line crosses over your expenses line, you’ve reached the crossover point.

The crossover point for FI
Your Money Or Your Life: The FI crossover point

At this point your investments are earning enough money to cover all your expenses and discretionary spending.

And work is now optional.

Many people have reached this point in just 10 years by saving and investing at least 50% of their income.

Would you like to retire in 10 years?

Please comment below with your preferred method for tracking your income and expenses. Do you use an App?

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