What is F.I.R.E.?
Financial Independence Retire Early
F.I.R.E. is an acronym. It stands for Financial Independence Retire Early. There's a growing movement mostly within the millennial demographic – people who are practicing FIRE principles and retiring decades earlier than expected as a result. Smart, often middle-income earners are using a simple formula of high savings rates (50-70% of their incomes) + frugal living (minimalism) + low-cost stock index fund investing (Warren Buffett’s standard investment advice) in order to reach financial independence within short, usually around 10-year periods of time. For obvious reasons, FIRE is sometimes referred to as “the ultimate life hack.”
This large and growing community has an ever-increasing cadre of 100+ high-traffic bloggers, most of whom chronicle their FIRE journeys and publish details of their methods, and report their actual personal financial information along the way. Many of the most popular ones can be found at www.fifeeds.com. It’s a fascinating voyeuristic genre with an alluring punchline: retire early and pursue your true passions! There is more and more journalistic coverage of FIRE. Just search Google News for “early retirement” or “early financial independence” and you’ll find almost daily coverage of this fascinating phenomenon.
The reluctant and beloved de facto leader of the FIRE movement is a badass named "Mr. Money Mustache" or “MMM” for short (most of these bloggers use funny names to stay anonymous making them feel more comfortable in publishing their personal financial information). MMM and his wife retired at the age of 30 and, thankfully, he decided to share his journey and tactics through blogging and set the stage for this movement to explode into the mainstream. Today his blog, with approximately 7 million monthly page views, has introduced countless people to FIRE while inspiring and enabling many of them to change their lives for the better – often dramatically. And he is credited with inspiring countless other bloggers through his example. His website, www.mrmoneymustache.com, has a "start here” tab and can quickly introduce a reader to this special world. Here’s a powerful 28-minute lecture which is an entertaining intro to his uber-popular strain of FIRE philosophy called “Mustachianism:” https://vimeo.com/183016901.
Podcasts are another primary gateway to FIRE, and a place where the top minds of FIRE are interviewed and all the FIRE strategies far and wide are discussed. Much like with the Mr. Money Mustache blog, you often hear of people having sudden “lightbulb” moments upon discovering this fast-track possibility and immediately going down the FIRE “rabbit hole” – voraciously devouring and binge consuming the full archives of the www.MadFientist.com and www.ChooseFI.com podcast shows. Both are regularly rated in the top 100 on the iTunes business podcast charts (and ChooseFI’s Episode 21, “The 10 Pillars of FI,” is a popular FIRE intro summary). For even deeper dives, top rated FIRE related books include “The Simple Path to Wealth” (Collins)*; “Your Money or Your Life” (Robin)* and “Early Retirement Extreme” (Fisker)*, all written by icons in the FIRE community. While some folks are simply entertained, and seeking some high caliber personal finance insight, often, these “lightbulb” moments trigger radical life changes in these listeners and readers.
Refreshingly, the mechanics of FIRE not being conveyed by formal experts in a dry text book fashion. More powerfully, they are being illustrated through the real-life examples of the interesting but ordinary folks of FIRE who come in all shapes and sizes. FIRE principles tend to be presented in plain language for easy implementation. Practical categories like reduced housing expense, car expense, sound investment strategy and tax optimization are delivered in easy to digest posts, interviews and stories.
In the end, FIRE is an amazing petri dish for personal development. One of the first lessons in FIRE is clarifying that “money = happiness” is greatly a myth and that a minimalist approach, executed wisely, can actually provide for a very rich life experience. But the overriding goal of FIRE seems to be creating a healthy and optimal life. FIRE offers a layman’s playbook that allows one to identify what their ideal life would look like without the restraints of a 40-hour per week work obligation lasting until the age of 65. It provides them the opportunity and template to do the work they want to do, and to execute a life of maximal purpose, meaning and richness. Therefore, it’s no wonder, as Brad and Jonathan of ChooseFI show always say, “the FIRE is spreading my friends!”
Friends & resources:
The Almighty Dollar: This little guy can become your personal employee and make you money while you sleep.