FIRE stands for Financial Independence, Retire Early. The idea is simple: build a pool of investments large enough that the income it generates covers your living costs — so working becomes a choice, not an obligation.
Your FIRE number
Most FIRE plans start with one number: roughly 25 times your annual expenses. If you spend $30,000 a year, your target is about $750,000. Notice what drives it — not your income, but your spending. Lowering your cost of living shrinks the mountain you have to climb.
Where does 25× come from? The 4% rule
The multiple of 25 is just the inverse of the 4% rule — a guideline suggesting you can withdraw about 4% of a diversified portfolio in your first year of retirement, adjust for inflation each year after, and have a high chance of never running out over a 30-year horizon. It is a starting assumption, not a guarantee, but it gives the whole movement a concrete target.
The path: net worth, savings, and time
Reaching FIRE is a loop of three habits: track your net worth so you know where you stand, automate a high savings rate so progress happens without willpower, and let compound growth do the rest. Each tool below maps to one of those habits.