What Is a FIRE Number? A Beginner Guide to Financial Independence
Your FIRE number is the amount of money you need invested to never work again.
It sounds almost too easy to be true. But yeah - that is really it.
The Simple Formula
Your FIRE number = Annual expenses x 25
If you spend $40,000 per year, your FIRE number is $1,000,000.
A Real Example
Marcus is 33. Annual expenses: $44,000/year. FIRE number: $1,100,000. Current savings: $32,800.
The Real Value of Knowing Your Number
A FIRE number turns an open-ended worry into a fixed target. Without one, saving more is always vaguely better and never clearly enough. With one, every decision — a raise, a move, a cut in spending — can be measured against how much closer it brings the date.
Written by Sebastian Cole, a pen name. I build these calculators and publish the assumptions behind every number so you can check them yourself.
The 4% Rule originates from the Trinity Study (1998). It is a guideline, not a guarantee.