Lean FIRE
Financial independence built on a deliberately low spending level.
Lean FIRE describes independence at spending levels usually under $40,000 a year, which puts the target below $1,000,000. The lower spending shortens the accumulation phase from both directions at once.
The important distinction is that the spending level is permanent rather than a phase. A budget maintained during accumulation and then abandoned afterward describes a different and much larger target.
The tradeoff is margin. An unplanned $10,000 expense consumes a far larger share of a $28,000 annual budget than of an $80,000 one, and the same withdrawal rate leaves proportionally less room to absorb it.
Worked through
A $700k target, reached
Rural Vermont, no mortgage, spending $28k a year against a $700k target.
- Annual spending
- $28k
- Target at 25x
- $700k
- Portfolio
- $720k
- Monthly equivalent
- $2,333
The absence of a mortgage is doing most of the work. Housing is what separates a $28k budget from a $60k one.
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