What is the FIRE movement?

Financial Independence, Retire Early (FIRE) is a financial movement defined by frugality and extreme savings and investment. The movement claims that by saving up to 70% of their annual income, FIRE retirement proponents aim to retire early and live off small withdrawals from their accumulated funds. Inspired by the 1992 book Your Money or Your Life, written by two financial gurus, this movement gained rapid popularity amongst millennials.
The FIRE retirement movement takes direct aim at the conventional retirement age of 65 and the industry that has grown up to encourage people to plan for it.
While there are multiple variations to this, the most common types of FIRE are

  • Fat FIRE: This is for the individual with a traditional lifestyle who aims to save substantially more than the average worker but doesn’t want to reduce their current standard of living. This works for you if you have a large salary and aggressive investment plans.

  • Lean FIRE: This requires stringent adherence to minimalist living and extreme savings, necessitating a far more restricted lifestyle. Many Lean FIRE adherents live on $25,000 or less per year.

  • Barista FIRE: This is for people who want to exist between the two choices above. They quit their traditional 9-to-5 jobs, but use a combination of part-time work and savings to live a less-than-minimalist lifestyle.
August, 28 / 2022
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