Financial Independence, Retire Early — from rental income
How much you need each month in retirement
4% is the standard rule of thumb
FIRE stands for Financial Independence, Retire Early. The core idea is simple: save and invest aggressively until your passive income (from investments, rental properties, dividends, etc.) covers all your living expenses. At that point, working becomes optional.
FIRE Number = Annual Expenses / Safe Withdrawal Rate
If you spend $48,000/year and use a 4% withdrawal rate: $48,000 / 0.04 = $1,200,000. That's your FIRE number — the portfolio size where you can live off 4% withdrawals indefinitely.
The "4% rule" comes from the Trinity Study, which found that a 4% annual withdrawal rate from a diversified portfolio has historically survived 30+ year periods without running out of money. Some FIRE practitioners use 3.5% for extra safety.
Rental properties are a popular FIRE vehicle because they offer both cash flow AND appreciation. A landlord with 5 paid-off rental properties each generating $800/month has $48,000/year in passive income — potentially enough to reach FIRE without a traditional stock portfolio.
The key advantage of real estate FIRE: your "withdrawal rate" is effectively your net rental yield, which can be much higher than 4% since you're generating income rather than depleting a portfolio.
Track your rental portfolio, cash flow, and progress toward financial independence.
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