What is the Financial Independence and Early Retirement (FIRE) movement?

  • The FIRE movement is for people who are motivated to save enough to retire early.
  • The movement started in the 1990s but has grown significantly in popularity in recent years.
  • There are many types of FIRE depending on your individual expenses and needs.

For those who have dreamed of retiring early – and having their days freed from the obligations and pressures of a 9 to 5 job – there is a rapidly growing movement where everyday people are prioritizing this theme. to enjoy their best years at a younger age. Financial Independence; The Retire Early (FIRE) movement is about realizing that dream through extreme frugality, super savings, and early investing.

The origins of the FIRE movement date back to the 1992 book your money or your life by Joseph Dominguez and Vicki Robin.

Vicki Robin was an aspiring actress who inherited about $20,000 in 1968 (equivalent to about $160,000 in 2022 dollars) from her grandmother and decided to take a road trip across the United States and Mexico. During her travels, she met Dominquez, who was a technical stock analyst on Wall Street, who retired in 1969 at the age of 31 after amassing approximately $80,000 in wealth (the equivalent of nearly $650,000 in today’s dollars).

Together, they bonded over ideas of simple living and embraced a philosophy of living frugally in order to avoid getting sucked into unfulfilling corporate careers. The book became a bestseller and has sold over a million copies since its initial publication.

Dominquez and Robin were apparently ahead of their time, and the book they wrote when most millennials were children became hugely popular with young audiences and still resonates with people looking for and prioritizing a financially secure future in an early stage of their life.

This could be because for many young workers, retirement seems more out of reach than ever. The majority of millennials and Gen Z workers don’t expect to get much from Social Security, and lush pension checks are largely a thing of the past. With these hurdles in mind, some young workers have decided to completely flip the script on their relationships with career, money, and planning for retirement.

There are many forums dedicated to the FIRE movement online, and adherents can often be found on Reddit, in places like r/Financialindependence.

In these forums, early retirement aspirants will discuss various tips and tactics for achieving FIRE, such as identifying your Financial Independence (FI) number, paying off debt, avoiding new debt, super saving, spending consciously, and investing well. . Those who “FIRE’d” also share cautionary tales and help dispel myths about the reality of early retirement.

However, as the movement grew in popularity, it split into several categories, depending on the specific views of individual FIRE members and their needs and budgets. There are four main subcategories of FIRE.

1. LeanFIRE

LeanFIRE is characterized by its adherence to retired frugality, anti-consumerism and a minimalist approach. This particular offshoot is called leanFIRE because its adherents plan to live a simple, lean lifestyle where only basic needs are met.

Most people trying to achieve leanFIRE hope to have a nest egg that allows for a lifestyle of $50,000 per year (or less) for households, or $25,000 per year for individuals. Because leanFIRE is characterized by minimalism, it is much easier to save, because you do not need such a large wallet to achieve it.

For example, if you were to aim to achieve leanFIRE with an expected withdrawal rate of $40,000 per year and wanted to use the “x25 rule” to determine your retirement number, it would take a $1 million portfolio to support on the trigger, instead of needing multi-million dollar investments. If you wanted to live an even leaner life — like on $25,000 a year or less — you’d only need to save $625,000.


FatFIRE is the opposite of leanFIRE and is characterized by the desire to retire with plenty of extra income and live a comfortable life with luxuries not common to leanFIRE adherents. Typically, this equates to savings equal to or greater than $100,000 per year in retirement. In order to reach that number with the x25 rule in mind, one would need to save at least $2.5 million to get there.

The reasons for pursuing fatFIRE can vary, with some potential reasons including a desire to live in an area with a high cost of living or to retire with multiple residences, to be able to cover the cost of raising children or to dependent elderly parents, or even simply wanting to spend a lot of time traveling and buying luxury goods.

Because this type of FIRE requires the pre-retiree to save such a large amount, fatFIRE adherents spend less time worrying about budgeting and saving – although this is part of most FIRE strategies. – and spend more time focusing on increasing their income. in order to drastically increase their savings rate. Those aiming for a fatFIRE lifestyle may also have other sources of passive income, such as owning rental properties or being a silent partner in a business.


CoastFIRE is a little different because it’s not necessarily about early retirement, and many CoastFIRE members plan to work into their 60s, which is a more typical retirement age.

What coastFIRE is supposed to accomplish is load up all of your retirement savings for a short period of time, usually around 10 or 20 years, and then capitalize on compound interest to get your retirement numbers to where they should be . in order to retire comfortably when the time comes.

For many coastFIRE members, it’s about having the peace of mind later in your career to be able to take risks or slowly start cutting back, without having to worry about saving for retirement at the eleventh hour. – hence the theme of “freewheeling”. .”

There is some data to suggest this is a serious problem for people in the Gen X age bracket, who are about to retire soon but, as a collective, have saved very little for retire. A survey last year even suggested that only 25% of all Americans in this age group currently have more than $250,000 saved.

CoastFIRE does have some drawbacks, as you can’t always be sure of exactly how the market will move over the next few decades, but it’s generally safe to assume that your long-term returns on index fund investments will be around 8 at 10% per year.

4. BaristaFIRE

BaristaFIRE is about approaching retirement a hybrid way and focusing on having enough savings so you don’t have to work full-time, but still assuming you’ll be working part-time – perhaps in as a freelancer or barista, that’s where the name of this FIRE offshoot comes from.

Usually the reason someone would want to aim for semi-FIRE but get a part-time job is because they hope to get a part-time job that provides health insurance. Starbucks is one example of a company that offers health insurance to part-time employees, but it’s not the only one.

BaristaFIRE is also generally a little easier to achieve because you don’t need to have saved up as much for retirement as if you were trying to retire early completely, assuming a good chunk of your income comes from you. . – work on time. And it is assumed that hourly jobs are generally plentiful and open to people of all ages and backgrounds.

For example, if you wanted to retire early and live on $40,000 a year, you would need to save at least $1 million before you could quit your job, but if you have a part-time job that pays $20 $000 a year, then you only need to have half that amount saved to make up the difference – $500,000.

This type of FIRE may appeal to people who would like to keep somewhat busy, but who may not like their current career path and would like to reach FIRE and redirect their life and career as soon as they can, or to people who are interested in FIRE but anticipate having a lot of medical expenses and hope to retain commercial health insurance to cover these additional costs.

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