The FIRE movement stands for Financial Independence, Retire Early. It is a lifestyle movement that advocates for extreme saving and investing in order to retire early. The goal of FIRE is to achieve financial freedom so that you can choose how to spend your time, rather than having your time dictated by your job.
The FIRE movement was popularized by the book Your Money or Your Life by Vicki Robin and Joe Dominguez, which was published in 1992. The book argues that most people spend their lives working to earn money to buy things they don't need, and that this cycle of consumption can be broken by changing our relationship with money.
There are many different ways to achieve FIRE, but the general idea is to save and invest a large portion of your income. Some people aim to save 50% or more of their income, while others are more comfortable with a lower savings rate. The amount you need to save will depend on your desired retirement lifestyle and the rate of return you expect on your investments.
In addition to saving and investing, the FIRE movement also emphasizes the importance of living a frugal lifestyle. This means cutting back on unnecessary expenses and finding ways to live more simply. By reducing your expenses, you can free up more money to save and invest, which will help you reach your FIRE goals faster.
The FIRE movement is not for everyone. It requires a lot of discipline and commitment, and it may not be possible for everyone to achieve financial independence in their 30s or 40s. However, for those who are willing to make the sacrifices, FIRE can be a very rewarding way to live.
Here are some of the different types of FIRE movement:
- Lean FIRE: This is the most extreme form of FIRE, and it involves living a very frugal lifestyle in order to save as much money as possible. Lean FIRErs may live in small apartments, cook at home all the time, and forgo expensive hobbies.
- Fat FIRE: This is the opposite of Lean FIRE, and it involves living a comfortable and luxurious lifestyle in retirement. Fat FIRErs may own a big house, take expensive vacations, and indulge in their hobbies.
- Barista FIRE: This is a hybrid of Lean FIRE and Fat FIRE. Barista FIRErs work part-time in retirement to supplement their income. This allows them to have a more comfortable lifestyle without having to give up their independence.
The FIRE movement is a growing trend, and it is becoming more and more popular among millennials. As people become more aware of the rising cost of living and the decline of traditional retirement plans, they are looking for ways to achieve financial independence sooner rather than later.