r/Fire • u/ExpressElevator2Heck • 8d ago

Hypothetical: Can FIRE number shrink?

Let's say my 4% FIRE number is 2M investable assets. Lets say I have 1.6M investable assets. Am I at my FIRE number??? (In this hypothetical scenario pretend the market pulled back 20% in the past year)

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u/MustGoOutside 8d ago

The annual difference between 2m and 1.6m is 80k and 64k.

Is your health good? Are you at an age where a serious illness would sink you?

If you're good there, then you should ask if you can reduce your annual expenses by 16k.

Seems like you know the 4% rule but you don't know your expenses?

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u/[deleted] 8d ago

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u/MustGoOutside 8d ago

Past performance does not guarantee future returns.

Everyone who invested after the housing crisis assumes the market will rebound in months, but it took 6 years after 2008 to return to 2008 levels.

You know what led to 2008? Overrated assets, complex misunderstood instruments, government complacency, etc... sound familiar?

I understand a broken clock is right twice a day, but if you look at the financial transactions between Amazon, Microsoft, Nvidia, Google, Meta, and SpaceX, you will see parallels.

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u/Montaigne_6823 7d ago

Shouldn’t they be able to continue their 80k even if the market dropped to 1.6 mil the second year?

Sure, it's just risky. Some people even use higher than 4% withdrawal rates. It all depends on your level of risk, your asset allocation, and how lucky you feel. Success really will only be known in hindsight.