FIRE Calculator

What Is FIRE?

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.

The FIRE Number Formula

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

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.

FIRE and Real Estate

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.