Financial Independence Retire Early (FIRE) Movement

The FIRE movement has gained much traction in recent years as millennials have decided they don’t want to work forever like the generations before them. While traditional retirement typically starts around age 65-70, FIRE is built on the concept of retiring much sooner and spending more years doing what one loves, be it traveling, having a family, writing a novel, or pursuing any other hobby or life goal.

If this sounds enticing to you, you’re not alone. So, what is FIRE, and how do you reach it?

What is FIRE?

Financial Independence, Retire Early (FIRE) is a movement that came out of Vicki Robin’s and Joe Dominguez’s book Your Money or Your Life. While the book was published in 1992, the movement became widespread only in the last decade. So if you only heard of it recently, here’s how FIRE works:

The focus is on saving and investing aggressively throughout one’s working years to develop a cushion of savings and a portfolio of investments that one can live off of for the rest of their life. By saving up to 70% of the annual income, one can aim to retire early. Of course, saving and investing is the natural path people take to prepare for retirement, but what sets FIRE apart is the accelerated timeline by which FIRE hopefuls aim to have enough on which to retire.

Needless to say, FIRE requires hard work and a bit of luck. It requires a commitment to budget, save, and live below one’s means. It also requires sound and timely investments. 

Why FIRE?

There are many reasons people want to retire early. Perhaps their job takes away from their family time, or maybe they just really dislike their job. But this isn’t the case for all FIRE hopefuls.

Today, many FIRE adopters are striving for the “financial independence” part of FIRE. They may enjoy their work or reach the upper echelons of their career, but having Financial Independence affords them the security to do what they want. Perhaps they can take a long sabbatical, move cities, or take action on a business idea.

Everyone’s goals are unique, and so is everyone’s FIRE journey.

How To Reach FIRE

Almost every individual who sets out to achieve financial independence and retire early does so by investing a large portion of their income. After all, the movement is built on living off of withdrawals from one’s continuously growing investment portfolio.

Budget, Save, Invest

If you’re eager to reach financial independence and retire early (or just retire from your current role), the first step is to create a budget. The goal is to limit expenses and maximize the money you stash away in savings and investments.

The next step is to invest what money you can in long-term investments that will hopefully support you throughout retirement. One path you might take is an investor accreditation program, which allows you to invest in private offerings only available to accredited investors. If you would like to build your wealth through investing in this way and reach FIRE sooner, learn the test and requirements accredited investors need to have before participating in these opportunities.

The great thing about the FIRE movement is that anyone can do it. If you’re willing to put in the work and invest smartly, you can earn enough to retire sooner than you may have thought.