FIRE stands for financial independence, retire early. The idea is to save aggressively, often 40% to 70% of take-home pay, invest it in low-cost index funds, and reach a point where the portfolio can pay for life indefinitely. Retire early is optional; the real goal is having the choice.
The target is usually 25 times annual spending, from the 4% rule. Someone spending $60,000 a year needs about $1,500,000. Someone spending $40,000 needs $1,000,000. That is why spending, not income, drives the timeline. Cutting $10,000 of yearly spending both lowers the target by $250,000 and raises the amount saved each year.
Savings rate is the lever. At a 15% savings rate, reaching independence takes around 40 years. At 50% it takes around 17. At 70% it takes under 10. Those numbers assume steady returns and a constant lifestyle, which real life rarely delivers, but the shape holds.
For people paid in salary plus stock, FIRE math has a wrinkle: vests and bonuses can raise the savings rate sharply, but the target should be based on what you actually spend, not on a lifestyle inflated by a few strong equity years.
The common mistake is fixating on the finish line and ignoring the years in between. A plan that requires misery for fifteen years usually gets abandoned. Variations like coast FIRE and FatFIRE exist because people wanted more sustainable versions.