Fire portfolio

How much money you need to retire is called your FIRE portfolio (or FIRE corpus).

Your Net Worth is NOT your FIRE portfolio

A FIRE portfolio includes only invested assets that generate income for you to live on in after you FIRE. A rental property is part of both your net worth and your FIRE portfolio. Your car is a part of your net worth, but is not part of your FIRE portfolio. Do not count your primary residence in your FIRE portfolio. Your expenses already take into account your primary residence because you don't need to consider rent in your expenses!

But how does one compute that FIRE portfolio target number for oneself? Well for that we need to perform some calculations - the two most popular approaches being the Safe Withdrawal Rate strategy and the Bucket Strategy which we will discuss below.