FIRE is a financial movement of extreme savings and investment that allows proponents to retire far earlier than traditional budgets and retirement plans would allow.<ul><li>By dedicating up to 70% of income to savings, followers of the FIRE movement may eventually be able to quit their jobs and live solely off small withdrawals from their portfolios decades before the conventional retirement age of 65.</li><li>To cover their living expenses after retiring at a young age, FIRE devotees make small withdrawals from their savings, typically around 3% to 4% yearly.</li></ul>

Financial Independence, Retire Early (FIRE)

Borne out of the 1992 best-selling book "Your Money or Your Life" by Vicki Robin and Joe Dominguez, FIRE came to embody a core premise of the book: juxtaposing expenses and time spent at work against hours of your life. Every expense is compared to the time spent at work in order to earn the purchase.In more recent years, Millennials, in particular, have embraced the FIRE movement with the aim of retiring well before the traditional retirement age of 65.

How Financial Independence, Retire Early (FIRE) Started

<ul><li>Fat FIRE: an individual with a more traditional lifestyle who saves more than the average retirement investor</li><li>Lean FIRE: refers to stringent adherence to minimalist living and extreme savings, necessitating a far more restricted lifestyle.</li><li>Barista FIRE: refers to followers who have quit their traditional 9-to-5 job but still employ some form of part-time work to cover current expenses that would otherwise erode their retirement fund</li><li>Coast FIRE: also applies to followers with a part-time job, but these proponents do have enough saved to fund their retirement and current living expenses.</li></ul>

Variations on FIRE

<h2 dir="ltr"> What Is Financial Independence, Retire Early (FIRE)? </h2>
Financial Independence, Retire Early (FIRE) is a movement dedicated to a program of extreme savings and investment that allows proponents to retire far earlier than traditional budgets and <a href="https://www.investopedia.com/terms/r/retirement-planning.asp" data-component="link" data-source="inlineLink" data-type="internalLink" data-ordinal="1" dir="ltr">retirement plans</a> would allow.
<h3>
Key Takeaways</h3><UL><LI>Financial Independence, Retire Early (FIRE) is a financial movement defined by frugality and extreme savings and investment.</LI><LI>By saving up to 70% of annual income, FIRE proponents aim to retire early and live off small withdrawals from accumulated funds.</LI><LI>The FIRE movement was born from a 1992 book "Your Money or Your Life," written by two financial gurus.</LI></UL><h4>
Click Play to Learn What the FIRE Movement Is</h4><h2 dir="ltr"> Understanding Financial Independence, Retire Early (FIRE) </h2>
By dedicating up to 70% of income to savings, followers of the FIRE movement may eventually be able to quit their jobs and live solely off small withdrawals from their portfolios decades before the conventional retirement age of 65.1

Of course, FIRE isn't a surefire plan, and extremely high rates of saving at the expense of current quality of life and lifestyle should be considered.

Borne out of the 1992 best-selling book Your Money or Your Life by Vicki Robin and Joe Dominguez, FIRE came to embody a core premise of the book:&nbsp;juxtaposing expenses and time spent at work against hours of your life. Every expense is compared to the time spent at work in order to earn the purchase.2

In more recent years, <a href="https://www.investopedia.com/terms/m/millennial.asp" data-component="link" data-source="inlineLink" data-type="internalLink" data-ordinal="1" dir="ltr">Millennials</a> in particular have embraced the FIRE movement with the aim of retiring well before the traditional <a href="https://www.investopedia.com/terms/r/retirement.asp" data-component="link" data-source="inlineLink" data-type="internalLink" data-ordinal="2" dir="ltr">retirement age of 65</a>. Proponents of the extreme-saving lifestyle often begin by remaining for several years in the traditional workforce in order to save up to 70% of their yearly income. Once their savings reach approximately 30 times their yearly expenses, often roughly $1 million, they may quit their day jobs or completely retire from any form of employment altogether.1

To cover their living expenses after retiring at a young age, FIRE devotees make small withdrawals from their savings, typically around 3% to 4% yearly. Depending on the size of the savings and desired lifestyle, this requires extreme diligence to monitor expenses and continued maintenance and reallocation of their investments.1
<div dir="ltr">
When stock markets fall and/or interest rate environments are low, the FIRE plan may fall short.</div><h2 dir="ltr"> Variations on FIRE </h2>
Within the FIRE movement are several styles that dictate the lifestyle devotees are able and willing to abide by:1﻿
<UL><LI>Fat FIRE: an individual with a more traditional lifestyle&nbsp;who saves more than the average retirement investor</LI><LI>Lean FIRE: refers to stringent adherence to minimalist living and extreme savings, necessitating a far more restricted lifestyle.</LI><LI>Barista FIRE: refers to followers who have quit their traditional 9-to-5 job but still employ some form of part-time work to cover current expenses that would otherwise erode their <a href="https://www.investopedia.com/articles/personal-finance/102815/how-make-your-own-retirement-fund.asp" data-component="link" data-source="inlineLink" data-type="internalLink" data-ordinal="1" dir="ltr">retirement fund</a></LI><LI>Coast FIRE: also applies to followers with a part-time job,&nbsp;but these proponents do have enough saved to fund their retirement and current living expenses</LI></UL><h2 dir="ltr"> Frequently Asked Questions </h2><h3 dir="ltr"> Who Invented FIRE? </h3>
Borne out of the 1992 best-selling book Your Money or Your Life by Vicki Robin and Joe Dominguez, FIRE came to embody a core premise of the book: juxtaposing expenses and time spent at work against hours of your life. Every expense is compared to the time spent at work in order to earn the purchase.
<h3 dir="ltr"> How Does FIRE Work? </h3>
Followers of FIRE (Financial Independence, Retire Early) plan to retire before the traditional retirement age of 65 by dedicating up to 70% of income to savings while still in the workforce. Once their savings reach approximately 30 times their yearly expenses, often roughly $1 million, they may quit their day jobs or completely retire from any form of employment altogether. To cover their living expenses after retiring at a young age, FIRE devotees make small withdrawals from their savings, typically around 3% to 4% yearly.
<h3 dir="ltr"> What Are Some FIRE Variations? </h3>
Within the FIRE movement are several variations. Fat FIRE refers to an individual with a more traditional lifestyle who saves more than the average retirement investor. Lean FIRE refers to stringent adherence to minimalist living and extreme savings, necessitating a far more restricted lifestyle. Barista FIRE refers to followers who have quit their traditional 9-to-5 job but still employ some form of part-time work to cover current expenses that would otherwise erode their retirement fund. Coast FIRE applies to followers with a part-time job, but these proponents do have enough saved to fund their retirement and current living expenses

Financial Independence, Retire Early (FIRE) is a movement that allows proponents to retire far earlier than the traditional retirement age.

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What Is Financial Independence, Retire Early (FIRE)?

Financial Independence, Retire Early (FIRE) is a movement dedicated to a program of extreme savings and investment that allows proponents to retire far earlier than traditional budgets and <a data-component="link" data-ordinal="1" data-source="inlineLink" data-type="internalLink" dir="ltr" href="https://www.investopedia.com/terms/r/retirement-planning.asp">retirement plans </a>would allow.

<ul><li>Financial Independence, Retire Early (FIRE) is a financial movement defined by frugality and extreme savings and investment. </li><li>By saving up to 70% of annual income, FIRE proponents aim to retire early and live off small withdrawals from accumulated funds. </li><li>The FIRE movement was born from a 1992 book "Your Money or Your Life," written by two financial gurus. </li> </ul>

Click Play to Learn What the FIRE Movement Is

Understanding Financial Independence, Retire Early (FIRE)

By dedicating up to 70% of income to savings, followers of the FIRE movement may eventually be able to quit their jobs and live solely off small withdrawals from their portfolios decades before the conventional retirement age of 65.1

Of course, FIRE isn't a surefire plan, and extremely high rates of saving at the expense of current quality of life and lifestyle should be considered.

Borne out of the 1992 best-selling book Your Money or Your Life by Vicki Robin and Joe Dominguez, FIRE came to embody a core premise of the book: juxtaposing expenses and time spent at work against hours of your life. Every expense is compared to the time spent at work in order to earn the purchase.2

In more recent years, <a data-component="link" data-ordinal="1" data-source="inlineLink" data-type="internalLink" dir="ltr" href="https://www.investopedia.com/terms/m/millennial.asp">Millennials </a>in particular have embraced the FIRE movement with the aim of retiring well before the traditional <a data-component="link" data-ordinal="2" data-source="inlineLink" data-type="internalLink" dir="ltr" href="https://www.investopedia.com/terms/r/retirement.asp">retirement age of 65 </a>. Proponents of the extreme-saving lifestyle often begin by remaining for several years in the traditional workforce in order to save up to 70% of their yearly income. Once their savings reach approximately 30 times their yearly expenses, often roughly $1 million, they may quit their day jobs or completely retire from any form of employment altogether.1

To cover their living expenses after retiring at a young age, FIRE devotees make small withdrawals from their savings, typically around 3% to 4% yearly. Depending on the size of the savings and desired lifestyle, this requires extreme diligence to monitor expenses and continued maintenance and reallocation of their investments.1

When stock markets fall and/or interest rate environments are low, the FIRE plan may fall short.

Within the FIRE movement are several styles that dictate the lifestyle devotees are able and willing to abide by:1 ﻿

<ul><li>Fat FIRE: an individual with a more traditional lifestyle who saves more than the average retirement investor </li><li>Lean FIRE: refers to stringent adherence to minimalist living and extreme savings, necessitating a far more restricted lifestyle. </li><li>Barista FIRE: refers to followers who have quit their traditional 9-to-5 job but still employ some form of part-time work to cover current expenses that would otherwise erode their <a data-component="link" data-ordinal="1" data-source="inlineLink" data-type="internalLink" dir="ltr" href="https://www.investopedia.com/articles/personal-finance/102815/how-make-your-own-retirement-fund.asp">retirement fund </a> </li><li>Coast FIRE: also applies to followers with a part-time job, but these proponents do have enough saved to fund their retirement and current living expenses </li> </ul>

Borne out of the 1992 best-selling book Your Money or Your Life by Vicki Robin and Joe Dominguez, FIRE came to embody a core premise of the book: juxtaposing expenses and time spent at work against hours of your life. Every expense is compared to the time spent at work in order to earn the purchase.

Followers of FIRE (Financial Independence, Retire Early) plan to retire before the traditional retirement age of 65 by dedicating up to 70% of income to savings while still in the workforce. Once their savings reach approximately 30 times their yearly expenses, often roughly $1 million, they may quit their day jobs or completely retire from any form of employment altogether. To cover their living expenses after retiring at a young age, FIRE devotees make small withdrawals from their savings, typically around 3% to 4% yearly.

Within the FIRE movement are several variations. Fat FIRE refers to an individual with a more traditional lifestyle who saves more than the average retirement investor. Lean FIRE refers to stringent adherence to minimalist living and extreme savings, necessitating a far more restricted lifestyle. Barista FIRE refers to followers who have quit their traditional 9-to-5 job but still employ some form of part-time work to cover current expenses that would otherwise erode their retirement fund. Coast FIRE applies to followers with a part-time job, but these proponents do have enough saved to fund their retirement and current living expenses

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Financial Independence, Retire Early (FIRE) Definition

Financial Independence, Retire Early (FIRE)

How Financial Independence, Retire Early (FIRE) Started

Variations on FIRE

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Financial Independence, Retire Early (FIRE) Definition

Financial Independence, Retire Early (FIRE)

How Financial Independence, Retire Early (FIRE) Started

Variations on FIRE

IDEAS ABOUT

MORE LIKE THIS

How to Retire Early | The $50 a Day Early Retirement Strategy

What It Takes to Actually Retire by 30

Retirement Planning and importance of Retirement Plans

It's time to

READ

LIKE

A PRO!

Bite-sized knowledge
to upgrade
your career