25× rule
The FIRE movement: financial independence, retire early
FIRE (Financial Independence, Retire Early) is the strategy of saving 50-70% of income to build a portfolio that funds your living expenses indefinitely. Multiply annual expenses by 25 to get your FIRE number. The movement has variants: lean FIRE (under $40k/year), regular FIRE ($40-100k), fat FIRE ($100k+), and barista FIRE (partial work covers some expenses).
Level
Try calculatorKey takeaways
04 · ideas- FIRE requires saving 25x your annual expenses
- Lean FIRE, Fat FIRE, Barista FIRE, Coast FIRE — four very different paths
- Savings rate, not income, determines FIRE timeline
- At 50% savings rate, you can retire in ~17 years regardless of income
FIRE stands for Financial Independence, Retire Early. The core idea: if you save enough money to live off investment returns, you never need to work for money again.
The magic number: 25× your annual expenses. If you spend $40,000/year, you need $1,000,000. This comes from the 4% rule — at 4% withdrawal rate, $1M generates $40,000/year.
The key insight: FIRE is about savings rate, not income. Earning $200,000 and spending $190,000 gets you nowhere. Earning $60,000 and saving $30,000 (50% rate) reaches FIRE in about 17 years.
| Savings rate | Years to FIRE |
|---|---|
| 10% | 51 years |
| 25% | 32 years |
| 50% | 17 years |
| 65% | 11 years |
| 80% | 6 years |