FIRE: financial independence, retire early

FIRE — Financial Independence, Retire Early — is the idea that if you save a high percentage of your income and invest it aggressively, you can reach a portfolio large enough to stop needing to work much sooner than the traditional retirement age. It's become a movement, and like most movements, it ranges from reasonable to extreme.

The basic math

Your savings rate is the single biggest driver of how fast you reach financial independence, because it does two things at once: it makes your nest egg bigger, and it makes your required nest egg smaller (you spend less, so 25x expenses is lower). A 10% savings rate gets you there in ~50 years. A 50% savings rate gets you there in ~17. A 70% savings rate, in under 9.

The flavors

• LeanFIRE: retire on a low budget ($30–40k/year). Requires extreme frugality but can happen in your 30s.
• FIRE / regular FIRE: retire on a moderate budget ($50–80k/year). The most common flavor.
• FatFIRE: retire with a luxurious budget ($150k+/year). Requires a much larger nest egg, often $4M+.
• BaristaFIRE: reach a portfolio that covers most expenses, then take a low-stress part-time job for health insurance and walking-around money.
• CoastFIRE: save enough early on that you can stop contributing and let compounding get you to full retirement.