Let’s start with some terminology first.

FIRE (Financial Independence Retire Early) number is the amount of money necessary to retire early (before the age of 65).

The way to achieve FIRE is to have enough passive income to cover your annual expenses.

As a rule of thumb, many followers of the FIRE movement have adopted the 4% rule as a way to find out their FIRE number. This rule of thumb is not perfect, but it’s said to 95% of the time.

In a nutshell. If you multiply your annual expenses times 25, you will get your Fire number.

In theory, if you withdraw 4% of your capital every year, you will have enough money to live the rest of your life.

Most people who achieve their FIRE number, don’t stop working. However, most of them work on things they feel passionate about. Since they are financially independent, their passion projects don’t have to generate a profit.

Figuring out annual expenses

The starting point is to figure out the regular recurring expenses, such as rent, telephone, internet, electricity, etc. Then adding the annual one-time expenses such as a vacation, and finally attempting to guest unpredictable expenses such as a health issue.

I will start with the monthly expenses and multiply them by 12, then add the annual expenses and other possible expenses.

Monthly expenses

Rent	745
Internet	40
Cell phone	45
Electricity	53
Restaurant	100
Transportation	50
Food	300
Total	1,333

Notes:

• The internet is shared with my neighbor.
• I will probably eliminate the phone service since I make and receive most of my calls via the Internet.
• I don’t own a car. Most of my transportation is by walking. Occasionally I take the metro, and about once a month I use a car-sharing service for a couple of hours.

Annual expense

Vacation	2,000
Clothes	200
Medical check-up	200
Micelenous	200
Total annual expenses	2,600

Grand total annual expenses

Monthly expenses	15,996
recurring annual expenses	2,600
Grand Total	18,596

My FIRE number

$18,596 X 25 = $464,900

Let’s round that up to $500,000

At this moment, I am not too far away from my FIRE number. It could take anywhere between one year to four years.

Working after FIRE

It’s been about two years that I only work on thing that I like, so I feel as if I am financially independent already.

After FIRE, I intend to continue working on my podcast and my blog. Those are the things that make me wake up in the morning.

I do earn some money from advertising on my blog and my podcast. I assume that my podcast audience will continue growing and my website traffic will continue to grow as well, which will translate in more revenues. That would be a treat, to earn money and not to need it.

The excess money will go to my investing account and my cushion or margin of error will be even bigger, and thus I will have more money to spend but also more peace of mind.

Then only thing that I will change once I achieve FIRE and continue earning money, is that I will go to more expensive restaurants, more often and I will pick up the bill if my friends haven’t achieve FIRE yet.

Are you close to FIRE?

How about you? Are you saving your way to FIRE? If so, what’s your FIRE number? How close are you to it? Please share in the comments.

Update: Sept 2, 2021

I did it. I reached my fire number. I don’t have to work for a living anymore.

I started doing photography as a hobby but also as a side gig. The thing that I like about event photography is that I am constantly going from one party to the next, meeting people, doing practically zero organizing, and getting paid for it.

I tried staying home and just read and walk around the park, but that seems too painful, I rather work taking photos and getting to know more people in my beautiful city of Montreal.