FIRE & Financial Independence
The arithmetic behind financial independence, and the variants people build around it.
- FIRE (Financial Independence, Retire Early)
- Accumulating enough that investment income covers expenses, well before conventional retirement age.
- FI Number
- The portfolio value at which investment income covers annual expenses indefinitely.
- The 4% Rule (Safe Withdrawal Rate)
- A withdrawal rate calibrated so a portfolio survived every historical 30-year window tested.
- Lean FIRE
- Financial independence built on a deliberately low spending level.
- Fat FIRE
- Financial independence at a spending level that requires no reduction in lifestyle.
- Barista FIRE
- A portfolio covering most expenses, with part-time work closing the gap and supplying benefits.
- Coast FIRE
- Having enough invested that growth alone reaches the target by retirement age, with no further contributions.
- Sequence of Returns Risk
- The risk that poor returns arrive early in retirement, when withdrawals compound the damage.
- Monte Carlo Simulation
- Testing a plan against thousands of randomized return sequences instead of one average.
This content is educational and informational only. It is not financial, investment, or tax advice. Consult a qualified professional before making financial decisions.