FIRE (Financial Independence, Retire Early)
A financial movement focused on aggressive saving and investing (often 50–70% of income) to achieve financial independence and the option to retire decades earlier than traditional retirement age.
FIRE combines extreme savings rates with strategic investing to build a portfolio large enough to cover living expenses indefinitely. The core principle is the 4% rule: once your investments reach 25 times your annual expenses, you can safely withdraw 4% per year without depleting your portfolio. There are several FIRE variants — Lean FIRE (minimal expenses, ~$30–40K/year), Fat FIRE (comfortable lifestyle, $80–100K+/year), and Barista FIRE (part-time work covering some expenses). Reaching FIRE requires tracking your savings rate meticulously, minimizing lifestyle inflation, and consistently investing in low-cost index funds. Assetli's FIRE calculator helps you model your timeline based on your actual spending and savings data.
Example
Annual expenses of $40,000 require a portfolio of $1,000,000 (25x). Saving $3,000/month at 7% return, you'd reach FIRE in approximately 16 years.
Try in Assetli
Read more
Related terms
Savings Rate
The percentage of income saved or invested rather than spent, widely considered the most important factor in building wealth.
Compound Interest
Interest earned on both the initial principal and the accumulated interest from previous periods, creating exponential growth over time.
Net Worth
The total value of all your assets (cash, investments, property) minus all liabilities (loans, mortgages, credit card debt).
Lifestyle Inflation
The tendency to increase spending as income rises, preventing growth in savings and wealth despite higher earnings.