What is FIRE?
FIRE stands for Financial Independence, Retire Early. Save and invest a large part of your income until your investments can pay for your life forever. After that, work becomes optional.
How is the FIRE number calculated?
Your FIRE number is your yearly expenses divided by your safe withdrawal rate. With the classic 4% rule, you need 25× your annual expenses. If you spend $24,000 a year, you need $600,000 invested.
The 4% rule comes from historical US market data. For longer retirements many people use 3–3.5% to be safer.
How to reach FIRE faster
- Increase your savings rate. It matters more than returns. Going from 20% to 50% cuts the time from ~37 to ~17 years.
- Automate investing. Invest on payday before you can spend it.
- Keep costs low. Broad, low-fee index funds beat most active strategies.
- Grow your income and invest the difference.
Educational purposes only, not financial advice. Returns are not guaranteed.