FIRE (Financial Independence, Retire Early) is a life planning strategy for accumulating enough assets and being able to live (virtually indefinitely) off of the passive income generated by the portfolio. Paid work becomes optional.
FIRE depends heavily on aggressive saving for investing. For example, a savings rate of 75% would allow you to save 1 year’s worth of living expenses in 4 months, meaning you’d need to work for a decade to have 25 years worth of funds ready to support you.
Trinity Study
The Trinity Study is the origin of the 4% rule where you should be able to draw 4% of your portfolio each year for 30 years without depleting your portfolio.
“When you can live on 4% of your investments per year, you are financially independent.” — The Simple Path to Wealth.
“If history is any guide for the future, then withdrawal rates of 3% and 4% are extremely unlikely to exhaust any portfolio of stocks and bonds…”