FIRE Movement: Achieving Financial Independence and Early Retirement

F.I.R.E. is an acronym for Financial Independence Retire Early. It’s a lifestyle movement that encourages saving money, reducing expenses, and investing with the goal of breaking from the conventional norms where people work well into their 60s with hopes for a comfortable retirement, someday. Those who subscribe to the FIRE movement feel that someday is just too far off. These individuals value their current lifestyle and experiences over the hopes of potential future prosperity 20 – 40 years down the road. Many who religiously follow FIRE practices even figure out a way to retire in their 30s and 40s.

The name of the game for those looking to achieve Financial Independence is to be disciplined enough to save and invest as much money as possible to enable retirement as early as possible. A common denominator amongst FIRE folks is to save early and aggressively and then let the principals of compounding do the rest of the work for you.

Some of the more popular methods used to achieve FIRE –

Live well beneath your means to reduce expenses – Spend less. Some go to extremes such as living with parents, roommates, or in a tiny home. They own an economical car, or none at all, and take public transportation instead. They pack their own lunch and cook at home instead of going to pricey restaurants. They camp or staycation instead of vacation. Ultimately, they value experiences over material possessions.
Get a very high paying job while trying to keep your expenses low. For example, working for one of the FAANG (Facebook, Amazon, Apple, Netflix, Google) companies.
Work and buy real estate in a High Cost of Living (HCOL) area then retire to a Low Cost of Living (LCOL) area.
Learn a skill and take on an extra job (aka a side hack).
Develop a passive income stream in addition to your primary job that can pay you a salary in retirement. For example, a blog or real estate rentals.

At its core though FIRE is a very personal thing. Everyone has their own definition of what number they want to achieve to consider themselves financially independent. For some it’s tens of thousands and for others it’s millions. For some, retirement means a sabbatical or part time work and for others it means never working again. The FIRE movement loosely categorizes the type of lifestyle you’ll live based on your retirement assets. Informally, in 2024 dollars it looks something like this:

Lean FIRE ($<1M)
- Saving just enough money such that you can (and are willing to) live on minimal expenses during retirement.
Traditional FIRE ($1-$5M)
- Probably where most would feel comfortable and have a comfortable retirement living off $40K – $200K per year.
Chubby FIRE ($5-$10M)
- Living very well off $200K – $400K per year.
Fat FIRE ($10M+)
- You’ll be living a first-class lifestyle on $400K plus per year.

Interestingly there are also a number of FIRE strategies. Here are a couple of the more popular ones-

Coast Fire

These folks aren’t necessarily looking to retire early. They look to save enough at an early age so that compounding does the rest of the work. They can then stop contributing to retirement savings, work to cover living expenses, and “coast” into retirement.

Barista Fire

Saving enough so that you can exit your more stressful career early but then work at a less stressful or part time job for supplemental income, such as a coffee shop barista.

So, hopefully you’ve enjoyed this little primer on the FIRE movement. It’s something that I’ve been following for a number of years now and I think that everyone can benefit from some of the core principles and saving strategies. If you want to did a bit deeper, her are a few links to some of my favorite sites and blogs that are all about FIRE: