A “Rock of Gibraltar” Financial Position: A Self-Assessment Scorecard
This companion to my “Rock of Gibraltar” essay turns its principles into a score. Each item is weighted by its contribution to resilience. For example, emergency cash and the absence of bad debt carry more weight than the finer points of diversification. Check every item that applies to you, add up the points in parentheses, and find your band at the bottom.
A note on honesty: this is only useful if you score the household you have, not the one you want. “On track” counts; “meaning to” does not.
1. Debt: The Foundation — up to 25 pts
☐ I carry no high-interest debt—no credit-card balances, payday loans, or costly car loans. (12)
☐ My only debt, if any, is a mortgage that is modest relative to my income. (7)
☐ Any debt I do carry is tied to an asset that earns its keep (e.g., a rental property or a sound business stake), not to consumption. (6)
If you are debt-free entirely, take all three.
2. Cash: The Cushion — up to 25 pts
☐ I hold 12–24 months of living expenses in liquid savings. (18)
☐ I hold at least 6 months of expenses in liquid savings (check this OR the item above, not both). (9)
☐ My reserve is large enough that a market drop would never force me to sell investments to cover this month’s bills. (7)
The essay’s caveat applies: if your overall balance sheet is already near fortress condition, a smaller earmarked reserve is defensible. Score the second box rather than the first and don’t punish yourself for it.
3. Investing for the Long Term — up to 20 pts
☐ I fund tax-advantaged accounts first (401(k), IRA, HSA, 529 as applicable). (6)
☐ My portfolio is diversified for how I invest—at least 30+ stocks across 5+ sectors if I pick my own, or a broad low-cost index approach if I invest passively. (8)
☐ The collapse of any single company (an Enron, a Silicon Valley Bank) would be immaterial to my net worth. (4)
☐ I have at least one stream of passive income—dividends, rent, or business income that arrives whether or not I show up to work. (2)
4. Protecting What You’ve Built — up to 18 pts
☐ I carry adequate health insurance. (4)
☐ I carry life insurance sufficient for those who depend on me. (4)
☐ I carry long-term, own-occupation disability insurance (important for high earners in a specialized field). (6)
☐ I carry an umbrella liability policy. (3)
☐ I carry long-term care insurance, if I am over 50 or otherwise at risk. (1)
5. Planning Beyond Yourself — up to 6 pts
☐ I have a current will. (2)
☐ I have named decision-makers in case of incapacity (powers of attorney, healthcare proxy). (2)
☐ I have a plan—and, where warranted, trusts—for transferring assets to the next generation. (2)
6. Living Below Your Means — up to 6 pts
☐ I save a meaningful share of every raise by default—ideally automating something like half of each income increase. (3)
☐ My spending is well below my income, and my lifestyle has not crept up to swallow my raises. (3)
The One Number That Tells the Story
Beyond the checklist, calculate your liquid net worth-to-expenses ratio—your cash plus investments (setting your home aside) divided by your annual spending. The family in the essay sat near twelve. It is the single fastest read on how close you are to fortress condition, and it is worth knowing yours regardless of where you land below.
| Score | Band | What it means |
|---|---|---|
| 85–100 | Fortress | Damn near impossible to displace. A lost job or a bad diagnosis is an inconvenience, not a crisis. Your work now is maintenance. |
| 65–84 | Fortified | Strong and resilient, with a known soft spot or two. Find your lowest-scoring section and close that gap first. |
| 40–64 | Exposed | A solid income that a single setback could still rattle. Usually, the missing pieces are cash depth and the absence of high-interest debt—fix those before anything fancier. |
| 0–39 | Fragile | One bad Friday from real trouble. Start at the foundation: kill high-interest debt, then build the cash cushion. Everything else can wait until those two are underway. |
The point of the score is not the number. It is to show you, plainly, which wall of the fortress is lowest—so you know where to lay the next stone.