Question 1

What is the FIRE movement?

Accepted Answer

FIRE stands for Financial Independence, Retire Early. It's a lifestyle movement focused on extreme savings and investing to accumulate enough wealth to retire much earlier than the traditional age of 65. The core idea is to save 50-70% of your income and invest it to reach financial independence.

Question 2

How is the FIRE number calculated?

Accepted Answer

Your FIRE number is calculated by dividing your annual expenses by your safe withdrawal rate. Using the standard 4% rule: FIRE Number = Annual Expenses / 0.04, or equivalently, Annual Expenses x 25. For example, if you spend $40,000/year, your FIRE number is $1,000,000.

Question 3

What is the 4% rule?

Accepted Answer

The 4% rule comes from the Trinity Study, which found that retirees who withdraw 4% of their portfolio in the first year (adjusting for inflation thereafter) have a very high probability of not running out of money over a 30-year retirement. Some FIRE advocates use 3.5% for extra safety.

Question 4

What is the difference between Lean FIRE and Coast FIRE?

Accepted Answer

Lean FIRE means reaching financial independence with a leaner budget — typically 50% of your current expenses. It requires a smaller nest egg but a more frugal lifestyle. Coast FIRE means you've saved enough that compound growth alone will grow your portfolio to your full FIRE number by traditional retirement age (65), so you only need to cover current expenses without saving more.

Question 5

What savings rate do I need for FIRE?

Accepted Answer

The higher your savings rate, the faster you reach FIRE. At a 50% savings rate, you can retire in roughly 17 years. At 70%, it drops to about 8.5 years. The key insight is that saving more has a double effect: it increases your investments AND reduces the amount you need to live on.

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