The FIRE (Financial Independence, Retire Early) number is the portfolio size large enough to fund your lifestyle indefinitely through investment returns alone. The classic formula — annual expenses divided by a safe withdrawal rate — traces back to the Trinity Study, which found that a 4% annual withdrawal from a diversified stock/bond portfolio had a high probability of surviving 30 years.
The 4% rule was originally designed for traditional retirement (30-year horizon). Early retirees often plan for 40-50 year horizons, which justifies a slightly lower withdrawal rate (3.25-3.75%) to improve success probability. Conservative FIRE planners use 3.5% (a 28.5× multiplier), while more aggressive savers use 4.5% or 5% (22× or 20×).
Reaching FIRE involves three levers: savings rate, return on investment, and spending level. Of these, savings rate is by far the most powerful. A 50% savings rate gets most investors to FIRE in about 17 years regardless of absolute income, while a 15% savings rate takes roughly 43 years. High savings rates compound in two directions — your portfolio grows faster, and your FIRE target is smaller (because you've demonstrated lower expenses).
Lifestyle inflation is the silent enemy of FIRE. Every dollar of permanent spending increase adds 25 dollars to your required FIRE number at a 4% withdrawal rate. That's why many early-retirement-focused communities emphasize frugality: each $1,000 of reduced monthly spending lowers the FIRE number by $300,000.