By Rachel Puryear
If you follow financial trends, you have likely heard of the “Financial Independence, Retire Early” movement, abbreviated as FIRE. In short, the point is to save money and generate passive income, in order to have the ability to retire early.
For most FIRE fans, living as frugally as possible is an essential component, in order to free up more funds for saving. Accordingly, having at least some degree of discretionary income to save is necessary. FIRE is associated largely with tech workers who earn a relatively good living – however, FIRE adherents include people of a variety of income levels, occupations, and walks of life.
As with all things in life, FIRE presents a trade-off. Living frugally in order to maximize retirement savings means sacrificing standard of living. However, for FIRE fans; the appeal of retiring – or at least becoming financially independent – early, and having more free time; is worth it.
There are, of course, different levels of FIRE. People who take it to the extreme, and live lifestyles so frugal that they would not appeal to most people (and resemble more of a voluntary poverty than thrift), often get attention. However, this can be adjusted based upon an individual’s preferred level of trade-off.
For instance, one person might set a goal of semi-retiring by age 55. “Semi-retiring” could include working fewer hours and taking more time off, and/or doing less lucrative work that might allow for a more flexible lifestyle or personal rewards. Another might set a goal of totally retiring by age 35. The latter will have to save a lot more, and therefore earn more and live more extremely frugally; than the former. It depends upon what is worth it to an individual in the trade-off.
If you are interested in FIRE and want to tinker around with the numbers – or if you are maybe already a FIRE fan and want another tool to play with; click here for an online FIRE retirement calculator to explore. Enjoy.
Thank you for reading, following, and sharing dear readers. Here’s to your thriving and prospering, so you can better care for yourself and your loved ones.