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Financial independence (FIRE)
PlanungErwachsene
Financial Independence, Retire Early: building up enough wealth to live off the returns – without having to work. Rule of thumb: 25 times your annual expenses.
FIRE (Financial Independence, Retire Early) is a movement whose goal is to become financially independent early – i.e. to have enough assets to live off the returns.
The rule of thumb: you need 25 times your annual expenses. With €2,000/month (€24,000/year), that's €600,000. You can withdraw 4% of it each year without the assets shrinking in the long run (the "4% rule").
How do you get there? An extremely high savings rate (40–70%), long-term investing in ETFs, conscious consumption. Realistically possible in 15–20 years – but it takes discipline.
Did you know? To become financially free using the 4% rule, you need 25 times your annual expenses. With expenses of €2,000/month: €600,000.
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