Wondering about FIRE, in case you do not have family, rent or any other bigger expenses how much should you have to start FIRE (multiply of month or year costs) ?
Also rest of capital could be consumed at the end. Suppose average long term 10% p.a. out of stocks and reasonable inflation.
FIRE is largely about how much risk you are willing to accept. The 1st 2 bullet points, to me, are wildly optimistic. The market has always, always had good years and bad years. Just in the last 2 decades, you have the '08 housing bubble crash and the Great Recession and then the global pandemic. Each of those would have at least temporarily put a very hefty dent in those 1st two bullet points.
And then 1 yr of cash in a savings account would not have been enough to wait for the securities in the 1st 2 points to come back. If the high risk one would have come back at all.
To me, seems very risky and very optimistic. I would not call this 'a good idea'. But as I opened with, if you want to accept that risk, that's your choice.
If there was a way of getting 25% annual return on your money, everyone would do it.
There's not.
You're going to get something like 10% - which after taxes and inflation is going to be something like 6% real rate of return.
So do a low cost index fund or ETF, and accept that you're going to get ~6% ROI.
I've always understood FIRE to be about controlling costs. If you lower your expenses there are two benefits:
The first is obvious, if you have some fixed income and you spend less of it, there's more left over for investing.
The second point is more subtle. Your retirement nest egg is directly proportional to your expected expenses. If you lower your expenses by 20% (say by moving to a smaller house or paying off a mortgage early) then then your "number" - the amount you need to have to retire - also goes down by 20%.
FIRE is about aggressively cutting non-essential costs, so that you're only spending money on things that truly make you happy. This helps you to save more quickly until you have enough invested to cover your expenses. (generally the nest egg is ~25x the annual expenses.)
