What is FIRE (Financial Independence; Retire Early)?
FIRE is a financial movement to maximize your time by finding creative ways to say goodbye to your full-time job. Reaching FIRE is usually achieved through a combination of reduced expenses, increased savings, and some lifestyle tweaks.
A popular formula to determine if you have reached FIRE is to calculate your FIRE Number by taking your yearly expenses and multiple it by 25 as explained in this video here:
An example would be if you spend $50,000 a year then you need to save $1,250,000 ($50,000 x 25). And then as long as you withdraw just 4% of your savings a year ($50,000) you'll have enough to cover your expenses through the rest. The market will historically increase over time to extend your savings for much longer than 25 years.
My take is that if you want to FIRE, then look into House FIRE. My "House FIRE" book goes in depth on this, but in out I teach how you can live off $50,000 in expenses without saving over a million dollars first. You can live off $50,000 in expenses with less than saving half that amount of that money and investing in real estate. More blog articles to come on this subject but wanted to first share what FIRE was to those who have never heard of it before.