My FIRE Number to Reach for Financial Independence
It was about a year ago that I learned about FIRE (Financial Independence, Retire Early) and that's when I realized I don't need a million dollars (or more) to retire. Although my intention is not about retiring early, but the idea of financially independence always intrigued me.
Soon I came across a simple formula for calculating how much money I would need to retire or, in my case, not to worry about money. This is commonly known as the FIRE number, and the formula is 25 times the annual expense:
FIRE Number = 25 X Annual Expense
Plugging in this formula with my current annual expense of $22,368, the result is $559,200. This is my FIRE number if I were to live with my current lifestyle with my current expenses not changing. However, I feel like I can do better.
Since the majority of my expenses is rent, with 66% of my expenses going toward my rent of $1,224 per month, if I can cut down or eliminate it then my annual expense would decrease to $7,680. Consequently, my FIRE number …
Soon I came across a simple formula for calculating how much money I would need to retire or, in my case, not to worry about money. This is commonly known as the FIRE number, and the formula is 25 times the annual expense:
FIRE Number = 25 X Annual Expense
Plugging in this formula with my current annual expense of $22,368, the result is $559,200. This is my FIRE number if I were to live with my current lifestyle with my current expenses not changing. However, I feel like I can do better.
Since the majority of my expenses is rent, with 66% of my expenses going toward my rent of $1,224 per month, if I can cut down or eliminate it then my annual expense would decrease to $7,680. Consequently, my FIRE number …
