Part 3/8:
Kenneth explains that FIRE revolves around two fundamental principles:
The Rule of 25: Multiply your annual expenses by 25 to determine your retirement savings target.
The 4% Rule: After retirement, withdraw only 4% of your accumulated savings annually, ensuring funds last for decades.
This approach underscores the goal of becoming financially independent—where passive income from investments can cover one's expenses, freeing time and allowing individuals to pursue what truly matters.