What is FIRE Movement?

FIRE — Financial Independence, Retire Early — is a movement and lifestyle that uses aggressive saving (typically 50–70% of income) and low-cost index investing to build enough wealth to retire decades before the traditional age.

The 4% rule (Trinity Study) underpins FIRE math: a portfolio of 25× annual expenses can sustain inflation-adjusted withdrawals for 30+ years. Sub-flavours include Lean FIRE (minimal expenses, ~25× small budget), Fat FIRE (comfortable lifestyle, ~25–33× larger budget), Coast FIRE (enough saved to coast to retirement without further contributions) and Barista FIRE (semi-retirement with part-time income covering living costs).

Critics argue FIRE is achievable mainly by high earners with low expenses, and that retiring at 35 carries 60+ years of sequence-of-returns risk. Proponents counter that financial independence — not necessarily early retirement — is the real goal: the freedom to choose work, not need it.

Formula

FIRE Number = Annual Expenses × 25

Example

A household spending CHF 50k per year targets a CHF 1.25m portfolio (25×) to declare financial independence; at a 60% savings rate, they reach the number in about 13 years.

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Related terms

Savings Rate

The savings rate is the percentage of after-tax income that a household saves rather than spends, a key driver of long-term wealth and the timeline to financial independence.

Retirement Planning

Retirement planning is the process of determining retirement income goals and the actions and decisions necessary to achieve them — covering savings, investments, insurance, taxes and withdrawal strategy.

Net Worth

Net worth is the difference between what you own (assets) and what you owe (liabilities), representing the true financial position of an individual or household at a single point in time.

Budget

A budget is a written plan that allocates expected income to spending, saving and debt repayment categories over a defined period, used to control finances and reach goals.

Frequently asked questions

Is the 4% rule safe?+

Backtested across 1926–1995 US data; subsequent research suggests 3.3–3.5% may be safer for early retirees with long horizons.

Do I have to retire?+

No — most FIRE adherents keep working in some form, just on their own terms.

What if markets crash early?+

Sequence-of-returns risk is the main FIRE threat; maintain a cash buffer, be flexible with spending, or earn a small income to bridge bad years.