ERE Wheaton Levels

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ERE Wheaton Levels are an adaptation of the Wheaton Eco Scale concept to personal finance. It is named after Paul Wheaton, who recognized that in a field as deep and complex as permaculture, people would have varying levels of understanding according to their level of mastery. While people at adjacent levels are able to judge relative competence, there is also a fog of comprehension effect where people separated by multiple levels have difficulty relating to each other. The problem arises because increasing competence is a difference in kind rather than degree.

Construction, Structure & Rules

The scale describes a number of stages and is meant to facilitate communication between various stages due to the difficulty of relating to mindsets that are far ahead or far behind relative to one's personal journey.

Based on years of observation of interactions, the following holds:

  1. For any stage, N, there are substantially fewer representatives at stage N+1 and substantially more at stage N-1. The multiplier is on the order of 5-10. Thus for each 100 people at stage 3, expect about 1-4 people at stage 5.
  2. Someone at stage N usually sees someone at stage N+1 as inspirational but sees anyone at N+2 as too extreme. N+3 and more might appear entirely unreasonable or downright "crazy". This relative tension holds no matter what N is. Conversely, N-1 will be seen as someone who just needs to try a little harder, whereas N-2 or more seems rather uninformed or even misinformed.
  3. People will generally occupy a couple of adjacent stages, e.g. 3+4+5, but will have center of gravity that dominates their behavior and way of thinking, e.g. 4.
  4. Each stage is only achieved by transcending the previous stage as each new stage uses the previous stage as a foundation. While higher stages may be understood in the abstract, they can not be operationally constructed "mid-air". For example, one can not optimize a budget (L5) without experiental knowledge of the difference between price and value (L4) or how to follow (L3) or create (L2) a budget in the first place.

A more elaborate explanation can be found here:

ERE Wheaton Scale

The ERE Wheaton Table identifies a few representative mindsets along the personal economics journey as mastery is developed in spending efficiency and overall life skills. These descriptions are based on 10 years of experience talking to different people in the personal finance world. Refer to the forum discussion for additional context. In early 2021 a new version was developed (click link for a summary table). The table(s) in the link(s) summarize(s) the stages below.


At the low end of spending efficiency, consumers operate from a perspective of scarcity. Scarcity is characterized by two things: needs/wants exceeding income and extreme market-dependency. Lack of awareness results in paying for stuff several times over through the use of high-interest consumer debt. The inefficiency of spending makes it very difficult to build wealth unless incomes are significantly above median.


The accumulation mindset stresses playing the financial game as most people know it. Avoid high interest debt. Build up the credit score. Set aside some savings for an emergency fund. Use a budget to control spending. Economists, financial planners, radio, TV, newspapers, and advice columns cover this demographic.

Exponential Growth

This kind of person is what most people think of as a smart consumer. They always buy stuff on sale. Research the best deals. Most normal people envy this level of efficiency but won't strive for it due to incompatible mindset. On the financial side, there is an emphasis on increasing earnings and investing to take advantage of "the magic of compound interest." This stage is covered by the majority and biggest personal finance blogs. It also sets the tone for the fatFIRE part of the FIRE movement.

Embracing Efficiency

The average person thinks of this smarter consumer as a cheapskate. Realizes that used stuff works as well as new, and the deals are even better. This kind of person is the "millionaire next door" that drives a car that is 10 years old... and replaces it with a used car of similar age when that breaks down. (Normal people don't aspire to this.) Refuses to take on any new debt and pays off existing loans aggressively, including the mortgage. Knows a bunch of frugality tricks. Uses budgets to prioritize spending. This level defines the center of gravity of the FIRE movement as well as setting the tone for most of the leanFIRE side of the movement.


Breaking through the limitations of consumerism requires a different attitude altogether. The salaried person, in particular, may thus be "stuck" on this level arguing that earning more money is the better approach due to comparative advantage. Two things distinguish optimization from the previous levels: a producer mindset and low waste. This is really a generalization of the principles underlying the frugal practices usually presented as a list of tips. While others may DIY as a hobby, at this level building and fixing stuff is a way of life, making low expenses inevitable. Use of financial capital is Pareto-efficient. Uses budgets and bucket-systems as a retirement planning tool.

Yields and Flows

How can expenses get even lower when efficiency is already maximized? By playing a different game altogether. This might mean breaking the rules and not automatically accepting what everyone else perceives to be necessary. One concrete example of this is vandwelling as a solution for shelter, which requires a certain type of mastery over self. At a minimum it means being willing and able to use alternative forms of capital to meet needs and wants. Non-financial forms of capital become just as relevant as money is to the previous levels, and one becomes proficient in managing the flows. This mindset is beyond budgets, as they capture only one dimension of spending.

Systems Theory

Systems thinkers are able to see themselves and their environment as a set of interconnected systems and not a bunch of disconnected activities. The systems thinker applies this knowledge to derive needs and wants from the environment and their activities and goals through stable, self-sustaining systems of their own design. Realizing that waste from one process could be input to another, the systems thinker closes these loops to their advantage. An effective systems thinker no longer sees money as a proxy for standard of living. To them, spending money is mainly used to resolve friction and indicates poor systems design.


Actualizers have internalized systems thinking to the point of unconscious competence. The remaining systems focus is on closing the loops and reducing waste, as the major forms of capital are freely available (within reason). As such, money becomes more and more irrelevant in that its main use is in buying off head/poll taxes or costs that are impossible to escape or incorporate into the system. Since the system now meets all the lower needs and wants (shelter, food, transport, stuff) without much effort and attention, the focus switches to maximizing the person's potential as a human being on a full time basis by increasing capital in the form of skills and access.


A strong multidisciplinary skill set allows the autonomous player to access a wide range of different communities, professions, and perspectives. This makes it possible to see possibilities beyond their own system and make novel and serendipitous connections between people, resources, and ideas in different systems. The overall perspective has moved from one's personal system to a system of systems/the bigger world. The personal system may change accordingly.

Chop Wood, Carry Water

The final level serves as a place holder because insofar there is a final level, it's probably further away. However, it will presumably include some of the following features that may or may not have to be expanded into several stages. The person will be a playful fountain of creative solutions and connections, yet feel none of the frustration that earlier stages encountered when misunderstood. They will hold multiple perspectives including perspectives on perspectives and further perspectives on those meta-perspectives both in a theoretical sense and practically useful way. Engagement with the systems, sub-systems, and meta-systems of the autonomous person earlier will be based on a wide and deep level of experience and thus appear natural, spontaneous, and concordant with ethical principles.

Suggested Sources

Level Paradigm Resources
1 Scarcity Dave Ramsey, The Total Money Makeover

Jesse Mecham, You Need a Budget

2 Accumulate Ramit Sethi, I Will Teach You to be Rich

Suze Orman, The Money Book for the Young, Fabulous and Broke

3 Exponential Growth David Bach, The Automatic Millionaire

JL Collins, The Simple Path to Wealth

4 Embracing Efficiency Thomas Stanley and William Danko, The Millionaire Next Door

Amy Dacyczyn, The Complete Tightwad Gazette

Charles Long, How to Survive Without a Salary

5 Optimization Jeff Yeager, The Ultimate Cheapskate's Road Map to True Riches

Robert Clyatt, Work Less, Live More

6 Yields and Flows Vicki Robin and Joe Dominguez, Your Money or Your Life
7 Systems Theory Jacob Lund Fisker, Early Retirement Extreme

Jim Merkel, Radical Simplicity

8 Actualization Abraham H. Maslow, The Farther Reaches of Human Nature
9 Autonomous Vicki Robin, Interview

Bruce Lee, Bruce Lee Artist of Life

10 Chop Wood, Carry Water Bill Plotkin, Nature and the Human Soul