FIRE: saving half your pay

FIRE stands for financial independence, retire early. You save at least half of your net pay, and the maths of how long that takes is simpler than you would expect.

5 min readUpdated Oct 2026

What is FIRE?

A plan to save so much of your pay that, some years from now, your savings can cover your living costs for good. The usual aim is at least half of net pay. The idea goes back to Vicki Robin and Joe Dominguez's Your Money or Your Life (1992). Pete Adeney, who writes as Mr. Money Mustache, made the maths famous in a 2012 post, "The Shockingly Simple Math Behind Early Retirement".

"Retire" is the headline, but most people who save this much are buying a choice: to work less, take a year off, or change careers without money deciding for them.

In Flow, FIRE is one target: savings at least 50 % of net pay. Needs and wants have no limits of their own. With half your pay gone to savings, the other half has to cover both.

Is it for me?

It fits when your income is well above what you need to live on, or when you're willing to keep your costs where they are while your pay rises. You don't need to want to stop working: every step towards half buys freedom earlier, and many people aim for 30 or 40 % and stop there.

It doesn't fit while you still have expensive debt or no emergency fund. Sort those out first; see below.

How long does it take?

Financial independence here means savings large enough to live on for good. Your savings rate counts twice: a higher rate puts more money in, and it also means you live on less, so the pot you need is smaller.

That's why, under the usual assumptions, how long it takes depends only on the share of your pay you save. How much you earn doesn't come into it:

Monthly amounts on 45 000 Kč net. Years start from no savings and assume a 5 % return a year after inflation and the 4 % rule. The years are the same at any income.

So a raise shortens the timeline only if you save it. On 45 000 Kč, spending 36 000 Kč means saving 20 %. Get a raise to 50 000 Kč, keep spending at 36 000 Kč, and you save 28 %: the time drops from about 37 years to about 29.

How sure are those numbers?

The table is a model, not a forecast. Three assumptions do the work:

• A 5 % return a year after inflation. A cautious long-run figure for savings invested mostly in shares. It's an average, not a promise: real returns come in uneven years, and sometimes in bad decades.
• The 4 % rule. It comes from William Bengen's 1994 study and the Trinity study of 1998, which tested how much retirees could take out each year from US shares and bonds without running out over 30 years. If you stop working at 40, the money has to last longer, and many early retirees plan on 3 to 3.5 % instead. That means a pot of 29 to 33 times your yearly spending instead of 25, and more years of saving: at 50 %, about 18 to 20 instead of 17.
• Starting from nothing. Savings you already have shorten the time.

Returns matter less the more you save. A fee of 1 % a year cuts a 5 % return to 4 %: at a 20 % savings rate that adds about four years, at 50 % about one. Even so, check what an investment charges before you choose it.

Can I save half on my pay?

On 45 000 Kč, saving half means living on 22 500 Kč, rent included. For one person in a city that's hard. Most high savers get there in one of two ways:

• Keep costs flat while pay rises. Each raise goes to savings, and the rate climbs year after year.
• Live on one income as a couple. Run the household on one salary and save the other.

Where you cut matters more than how often. Housing, transport and food are most of most budgets: a smaller flat or one car fewer can be worth more than every small saving put together.

What should come first?

• Build an emergency fund first: three to six months of costs you can reach quickly.
• Pay off expensive debt before you invest. A credit card's interest is higher than any return in the table.
• Don't get there by dropping insurance. A plan that only works if nothing goes wrong isn't a plan.
• Stopping at 30 % is fine. Every step up shortens the time. Nothing special happens at exactly 50.

Try it in Flow