Financial independence (FI) is the state where your investments and passive income fully cover your living expenses. You no longer need to work for money—you work by choice, if at all.

FI is achieved when your portfolio, following a safe withdrawal rate (e.g., 4%), generates enough to fund your lifestyle. It does not require extreme wealth—only enough to match your expenses.

Financial independence is the “FI” in FIRE (Financial Independence, Retire Early). Some achieve FI and never retire; they continue working for purpose, social connection, or enjoyment.