Decoding Financial Independence Milestones (FIRE)
VNIT's tool doesn't just give you a single destination number, but breaks down your journey into rest stops suitable for each stage of life:
🏁 Coast FIRE
"Coasting downhill". You already have enough money in your investment fund for compound interest to take care of your old age. You don't need to save anymore, money earned can be spent freely.
☕ Barista FIRE
"Work and play". Assets generate enough profit to cover part of living expenses. You can quit high-pressure jobs (9-to-5) to do freelancing or lighter work.
🔥 Full FIRE
"Complete freedom". Investment profits cover 100% of living expenses. You can stop working permanently if you want.
Don't Let Inflation 'Erode' Your Dream
Many people calculate retirement but forget that 1 billion VND in 20 years can only buy a bowl of pho worth 200,000 VND. VNIT's chart clearly shows two lines:
- Nominal value (Blue line): The cash you hold in your hand.
- Real value (Dashed line): The actual purchasing power of that money converted to current prices.
💡 Tip: Always look at "Real Value" to ensure your quality of life doesn't decline over time.
What Do You Need to Prepare to Achieve FIRE?
- Optimize income: Check Net Salary & Tax to find ways to increase cash flow.
- Choose investment channel: Compare effectiveness between Savings vs Investment.
- Understand the power of compound interest: Use Compound Interest Calculatorto see how 5 million/month can become a fortune.
Frequently Asked Questions About FIRE
What is the 4% Rule for early retirement?
The 4% Rule suggests that if you withdraw 4% of your portfolio in the first year of retirement and adjust for inflation each year, your money should last at least 30 years. From this rule, your FIRE number = Annual spending × 25.
How is Coast FIRE different from traditional FIRE?
Coast FIRE is the state where you have accumulated enough money in your retirement fund so that compound interest will grow it to your retirement goal without needing additional contributions. At this point, you only need to work to cover current living expenses, reducing the pressure to save.
How much money is considered Financial Independence in Vietnam?
This number depends on your spending level. For example: If you spend 20 million/month (240 million/year), according to the 4% rule, you need about 6 billion VND to achieve complete financial independence. Use the VNIT tool to calculate the exact number for yourself.