What is the FIRE movement and how to calculate your Savings Rate
The acronym FIRE stands for "Financial Independence, Retire Early". It is a movement that seeks extreme savings optimization so you don't have to rely on a salary until you are 65.
The key indicator: Your Savings Rate
The fundamental pillar of FIRE is not how much money you make, but what percentage of that money you manage not to spend. This is called your Savings Rate. If you earn €2,000 and save €500, your savings rate is 25%.
The higher this percentage, the fewer years you will have to work before your investments generate enough returns to cover your living expenses.
Automatic Metrics in Totem Finance:
Our app features a Financial Analysis section with over 21 metrics. The app reads your cash flow, calculates your monthly Savings Rate in real-time, and tells you how many years it would take to achieve FIRE if you maintain that level of discipline.