FIRE Basics
The vocabulary and the milestones — what the terms mean and how they differ.
The Types of FIRE Explained
They all run on the same formula. What changes is how much you plan to spend — and whether you intend to stop working entirely or just stop worrying about it.
Read the guideYour Savings Rate Decides Your Retirement Date
Two people on very different salaries who save the same percentage of it reach financial independence at almost exactly the same time. Here is why, and what the whole table looks like.
Read the guideHow Big Should an Emergency Fund Be?
The usual answer is three to six months of expenses. The more useful question is what the fund is insuring against, because that is what actually sets the number.
Read the guideWhat Inflation Does to a FIRE Plan
Inflation attacks a FIRE plan from both ends: it erodes what the portfolio buys, and it raises the number the portfolio has to reach. Over a 30-year plan it is the largest single force acting on the target.
Read the guideFIRE in Europe: What Is Different
Almost all FIRE writing is American by default. Several of its load-bearing assumptions — the accounts, the healthcare gap, even the 4% rule — do not transfer intact.
Read the guideHow to Calculate Your Net Worth
Assets minus liabilities. Simple until you have to decide whether your car, your pension, and your partner’s savings belong in it.
Read the guideWithdrawal Strategies
How much you can safely spend from a portfolio, and what the research behind the numbers actually found.
The 4% Rule Explained
It is the most quoted number in early retirement — and the most misquoted. Here is what the research actually found, what it assumed, and how to use it without trusting it further than it deserves.
Read the guideSequence of Returns Risk
Take thirty years of market returns and reverse the order. The average is unchanged. For someone drawing an income from the portfolio, the outcome is not.
Read the guideGuyton-Klinger Guardrails
A withdrawal system that trades a fixed income for a higher starting rate: spend more when the portfolio runs ahead, less when it falls behind, according to rules set in advance.
Read the guideHow Much Do You Need to Retire at 40, 45, or 50?
The target is not one number but two decisions: what you plan to spend, and what multiple of it a retirement of that length needs. Here is how both move with the age you pick.
Read the guideDebt Payoff
Repayment order, what it costs you to get it wrong, and when the difference is worth caring about.
Debt Avalanche vs Snowball
One method is mathematically optimal. The other is the one people actually finish. The useful question is not which wins, but by how much — and that depends entirely on the shape of your debt.
Read the guideDebt Consolidation vs Balance Transfer
Both change the interest rate rather than the repayment order, which is why they can beat any repayment strategy. Both also share one failure mode that has nothing to do with arithmetic.
Read the guidePaying Off Your Mortgage Early vs Investing
Prepaying a mortgage earns a guaranteed return equal to its interest rate. Investing earns an uncertain one that may be higher. Here is how the comparison is constructed — and everything it does not capture.
Read the guideInvesting Fundamentals
Compounding, fund mechanics, and the details that quietly change what a portfolio produces.
Asset Allocation: Stocks vs Bonds
It is the decision that sets your expected return, and therefore the input every projection on this site asks you for. It is also the decision that determines how much the portfolio falls in a bad year.
Read the guideWhat Return Should You Assume?
Every calculator on this site asks you for one number and none of them tell you how to pick it. It is also the input that moves the answer most.
Read the guideWhat Fees Cost Over 30 Years
A percentage point sounds like nothing next to a 7% return. Applied every year to a growing balance, it is the difference between €598,085 and €456,806.
Read the guideThe Rule of 72
Divide 72 by an annual return and you get the number of years it takes to double. It is accurate to within a couple of months across the range that matters.
Read the guideDollar-Cost Averaging vs Lump Sum
The question only arises when you already hold a lump sum. Investing it gradually reduces the average time it spends invested, which is why it usually finishes behind — and why it sometimes does not.
Read the guideIndex Funds vs ETFs
The two terms answer different questions, which is why the comparison confuses people. One is about strategy, the other about structure — and most ETFs are index funds.
Read the guideAccumulating vs Distributing ETFs
Same index, same holdings, one difference: what happens to the dividends. It changes your admin, your tax position, and whether your portfolio produces any spendable income at all.
Read the guideRun the numbers yourself
Reading about a formula only gets you so far. Our free calculators use the same maths, in your browser, with no sign-up.
The information and calculations provided are for informational and educational purposes only and should not be considered financial, investment, or professional advice. Projections are hypothetical, based on assumptions that may not reflect actual market conditions. Past performance does not guarantee future results, and all investments carry risk of loss. Consult a qualified financial professional before making financial decisions.