Regular FIRE: capital pays for your whole life
Regular FIRE is when income from capital fully covers your current expenses. You may work, but you no longer have to.
- Life does not change — only the obligation to work does.
- A long road: usually 12–20 years at a high savings rate.
- Work out the target: annual expenses × 25.
What it is
This is the base version from which all the others are calculated. You neither lower your standard of living nor count on side work: capital pays for everything. Its size follows the 4% rule: you can spend about 4% of the sum a year and it will very likely last for decades.
In numbers
Expenses are $2,000 a month, $24,000 a year. Capital is $24,000 × 25 = $600,000. Multiplying by 25 is the same as dividing by 4%. Those leaving before 45 often use 3.5% or 3%: then the multiplier is 29 or 33.
Who it suits
- Those who want to keep their usual standard of living.
- Those with a high income and a savings rate of 30–40% or more.
- Those who need full independence from an employer.
Pros
- Life does not change — only the obligation to work does.
- A clear target and a clear formula.
- There is slack: spending can be cut in a bad year.
Cons and risks
- A long road: usually 12–20 years at a high savings rate.
- The 4% rule comes from US market history and guarantees nothing.
- A bad market in the first years after leaving is the main threat.
Where to start
- Work out the target: annual expenses × 25.
- Raise your savings rate: it matters more than returns.
- Invest regularly in broad funds and leave them alone in crises.
Run this kind on your own numbers: the calculator shows the capital you need and the time it takes.
FIRE calculator →Other kinds of FIRE
Coast FIRE · Barista FIRE · Lean FIRE · Fat FIRE
This article is educational and is not investment advice. The example is illustrative: expenses of $2,000 a month and the 4% rule.