FIRE

FIRE stands for Financial Independence, Retire Early — building enough savings that work becomes a choice rather than a requirement. The movement began in the United States in the 2010s and has since spread worldwide.

The maths is simpler than it sounds. Save 25 times your annual spending and you can withdraw 4% a year without draining the principal — the so-called 4% rule. Spending 40,000 a year points to a 1 million target; spending 60,000 points to 1.5 million.

That makes savings rate, not income, the deciding factor. Many people aim for 50 to 70% of take-home pay, and cutting spending works twice: you save more each month and the target itself falls. Trimming 500 a month lowers the goal by 150,000.

The 4% rule rests on historical US returns, so different inflation or market conditions can break it. For that reason many people now aim for the point where quitting becomes possible rather than a fixed retirement date. The goal is having the option, not necessarily taking it.