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1. What is FIRE?

FIRE stands for Financial Independence, Retire Early. It's a movement focused on extreme savings and investment to achieve financial independence much earlier than traditional retirement age.

Core Principles

High Savings Rate: Save 50-70% of your income instead of the typical 10-15%
Frugal Living: Conscious spending on what truly brings value and happiness
Investing Aggressively: Building passive income through investments
The 4% Rule: Withdraw 4% of your portfolio annually in retirement

2. The FIRE Number - Your Magic Number

What is Your FIRE Number?

Your FIRE Number is the amount of money you need to be financially independent. It's calculated using the 4% rule:

FIRE Number = Annual Expenses ÷ 4% (or × 25)

Why 4%?

The 4% rule comes from the Trinity Study, which found that withdrawing 4% of your portfolio annually had a 95% success rate over 30 years. For early retirement, many use 3-3.5% for extra safety.

Examples

• $40,000 expenses → $1,000,000 FIRE number
• $60,000 expenses → $1,500,000 FIRE number
• $30,000 expenses → $750,000 FIRE number

3. Types of FIRE

Lean FIRE

• Minimalist lifestyle
• Lower expenses ($20k-40k/year)
• Faster timeline to FIRE
• Requires significant frugality

Regular FIRE

• Maintain current lifestyle
• Moderate expenses
• Balanced approach
• Most common FIRE path

Fat FIRE

• Luxury lifestyle
• Higher expenses ($100k+/year)
• Longer timeline to FIRE
• High income required

Barista FIRE

• Part-time work for benefits
• Smaller FIRE number needed
• Healthcare coverage
• Work-life balance

4. The Power of Savings Rate

How Savings Rate Affects Timeline

Your savings rate is the single most important factor in determining how quickly you reach FIRE. Higher savings rates dramatically shorten your timeline.

The Math Behind It

With a 50% savings rate, you're saving one year of expenses every year you work. With a 75% savings rate, you're saving three years of expenses every year!

Typical Timelines

• 10% savings → 51 years to FIRE
• 25% savings → 32 years to FIRE
• 50% savings → 17 years to FIRE
• 75% savings → 7 years to FIRE

The Two Levers

You can increase your savings rate in two ways: increase income or decrease expenses. Most successful FIRE achievers do both aggressively.

5. Input Fields Explained

Current Age & Income

Your current age and gross annual income. Be honest about your income to get accurate results.

Annual Expenses

Your total annual living expenses. Track this carefully - it's the most important number for FIRE.

Current Investments

Your current investment portfolio value. Include retirement accounts, brokerage accounts, and other investments.

Savings Rate

Percentage of income you save and invest. This is the engine of your FIRE journey.

6. Accelerating Your FIRE Journey

Increase Income

• Job promotions and raises
• Side hustles and freelancing
• Starting a business
• Rental income
• Digital products

Reduce Expenses

• Housing optimization
• Transportation savings
• Mindful spending
• DIY and self-sufficiency
• Eliminate debt

Optimize Investments

• Low-cost index funds
• Tax optimization
• Regular rebalancing
• Avoid emotional decisions
• Stay the course

Mindset Shifts

• Value time over money
• Embrace minimalism
• Find free/cheap hobbies
• Build community
• Continuous learning

7. Common FIRE Scenarios

The Aggressive Saver

Profile

• Age: 25
• Income: $80,000
• Expenses: $30,000
• Savings Rate: 62.5%

Result

• FIRE Number: $750,000
• FIRE Age: 35
• Years to FIRE: 10
• Type: Lean FIRE

The Balanced Approach

Profile

• Age: 35
• Income: $120,000
• Expenses: $60,000
• Savings Rate: 50%

Result

• FIRE Number: $1,500,000
• FIRE Age: 48
• Years to FIRE: 13
• Type: Regular FIRE

The Late Starter

Profile

• Age: 45
• Income: $150,000
• Expenses: $80,000
• Savings Rate: 47%

Result

• FIRE Number: $2,000,000
• FIRE Age: 57
• Years to FIRE: 12
• Type: Barista FIRE

"The best time to plant a tree was 20 years ago. The second best time is now."

- Chinese Proverb