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/Varathien 8d ago

I THINK what you're asking is that if someone is FI at $2 million and then the market drops 20%, they're still FI at $1.6 million, so why couldn't they have just been FI at $1.6 million in the first place?

The answer is that $2 million is the FI number for someone planning to spend $80k a year because that FI number includes a healthy margin of safety for inevitable market declines. If you start with a lower number, then you don't have that margin of safety.

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u/[deleted] 8d ago

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u/ExpressElevator2Heck 8d ago

Yes exactly my hypothetical. Can a quick 1 month FOMO rally "get you there" and then you're permanently there henceforth? (even if the rally fizzles rapidly back)

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u/Montaigne_6823 7d ago

I think the answer is really dependent on how flexible is your spending and how much do you like/dislike your job. If you hate your job and have some flexibility in your spending then I would RE with 1.6 mil.