How the Freedom Score works
The Freedom Score is a number from −100 to +100. It has three components:
Component 1 — FI Progress (40 points)
Measures how much of your financial independence corpus you have accumulated.
FI corpus = annual expenses × 28.57 (at 3.5% safe withdrawal rate)
FI Progress = (current investable assets / FI corpus) × 40
Capped at 40.
Example: FI corpus ₹2.5 Cr, current assets ₹1 Cr → (1/2.5) × 40 = 16 points
Component 2 — Compounding Quality (40 points)
Measures how well your portfolio is compounding relative to inflation.
Inputs:
- Portfolio-weighted real return (expected return minus inflation)
- SIP consistency (months without gap)
- Asset mix score (diversification)
Example: 12% gross return, 5% inflation = 7% real, well-diversified SIP for 5 years → ~28 points
Component 3 — Resilience (20 points)
Measures your ability to absorb shocks.
Sub-components:
- Emergency fund adequacy (6 months = max)
- Insurance coverage
- Debt-to-income ratio
Example: 4 months emergency fund + adequate term insurance + low EMI ratio → ~15 points
The seven tiers
| Score | Tier |
|---|---|
| −100 to −50 | Survival |
| −50 to 0 | Stability |
| 0 to 25 | Security |
| 25 to 50 | Independence |
| 50 to 75 | Freedom |
| 75 to 90 | Sovereignty |
| 90 to 100 | Legacy |
See the full explainer at /methodology.