These are the most frequently asked FIRE questions
The 4% Rule is based on two financial averages. First, the 4 Percent Rule says that your stock portfolio will grow at an average rate of 7% annually. Second, because the average rate of inflation is 3%, you can safely withdraw 4% of that growth, leaving 3% behind to keep up with inflation.
Because you’re only spending the average incremental growth from your portfolio, in theory you should never run out of money.
Tough question. Not everyone can, or should, pursue early retirement, but everyone should make financial independence a goal.
FIRE might be easier to reach for the well-to-do, but FIRE offers something for everyone, regardless of income, and anyone that says otherwise doesn’t fully understand The FIRE Movement.
It would be great if there were a step-by-step approach to financial independence, but that’s not the case. Every situation is uniquely different, therefore you’ll need to customize your strategy to fit your needs.
That’s why, in our opinion, the best first step you can take is anything. It doesn’t matter what you do to start improving your financial situation, what’s important is that do something to improve your financial situation. You can always evolve your strategy later.