How It Works
Understanding the FIRE Simulator
What is FIRE?
FIRE stands for "Financial Independence, Retire Early." It's a movement focused on building enough wealth to cover your living expenses without needing to work for income. The goal is to achieve financial freedom and have the option to retire much earlier than traditional retirement age.
How the Simulator Works
Our FIRE Simulator helps you explore different financial strategies and see how they might play out over time. You can compare scenarios like:
- Stock Market Investing: Growing wealth through index funds and compound interest
- Real Estate Investment: Building equity through property ownership and appreciation
- Rent & Invest: Saving on housing costs by renting and investing the difference
Key Concepts
Compound Interest
The magic of earning interest on your interest. Small, consistent investments grow exponentially over time.
Asset Allocation
Spreading your investments across different asset classes to manage risk and maximize returns.
Equity Building
In real estate, equity is the portion of the property you actually own, increasing as you pay down your mortgage.
Opportunity Cost
The cost of choosing one financial path over another. Renting might save money that could be invested elsewhere.
Using the Simulator
- Choose a scenario from the main menu
- Adjust the input parameters (amounts, rates, time periods)
- Click "Run Simulation" to see the results
- Compare different strategies side by side
- Use the detailed data view to see month-by-month progress
Important Notes
This simulator is for educational and entertainment purposes only. Past performance does not guarantee future results. Real estate and stock market investments carry risk, and values can fluctuate significantly. Always consult with qualified financial advisors before making investment decisions.