The FIRE movement is a lifestyle movement whose goal is financial independence and retiring early. Is it a good idea?
F.I.R.E. stands for Financial Independence, Retire Early. Sounds simple —and amazing. Now, how are you supposed to achieve that goal? According to Investopedia, “FIRE is a movement dedicated to a program of extreme savings and investment that allows proponents to retire far earlier than traditional budgets and retirement plans would allow.”
Basically, the idea is to save and invest aggressively (somewhere between 50-75% of your income) so you have enough money to retire even before turning 50. Now, that sounds like a dream you probably already have.
FIRE is becoming extremely popular among millennials who struggle with the idea of working most of their lives in jobs they don’t love. But the FIRE philosophy is not a new thing. Actually, there are books written about the same thing, but without the marketing-friendly name. Here are some examples:
Carl Jensen, a FIRE adherent who managed to retire at age 43 with 1.3 million in the bank, said he sold his 4-bedroom, 4-bathroom house in a downsizing movement that allowed him to max-out his retirement accounts. Well, as it turns out, there is a book called “Your Money or Your Life”, first published in 1993 and it promotes the idea of downsizing. There’s also another book that promotes the FIRE philosophy, published in 1996, called “The Millionaire Next Door.”
While the idea behind FIRE might not be as new as they make us think, it still worth considering, at least to learn from it and, possibly, rethink the way we do things.
Bottom line is: reprioritize the present in order for a wealthier future. Along the way, you will have to make sacrifices and live in frugality. If you are up for it, then this philosophy might be right for you. After all, it’s better to be rich later than to only look richer now.