Are You on Fire? Breaking Down the FIRE Movement

Retiring at the age of 35. Sounds crazy, right? For proponents of the FIRE movement, that number is not out of the realm of possibility.

“FIRE” stands for Financial Independence, Retire Early; and it is a movement whose inspiration stems from the book called Your Money or Your Life that was authored by Vicki Robin and Joe Dominguez in 1992. For a while, the only kinds of people spoken about in relation to the FIRE movement were the tech bros or Wall Street financiers, but the wave has more recently swept up many everyday people who aren’t generating six-figure annual salaries.

FIRE movement woman on the beach

What are the basics of FIRE?

Those living the FIRE lifestyle advocate getting to financial independence as early as possible through reducing your expenses, increasing your income, and aggressively saving and investing. Many supporters of FIRE recommend saving and investing between 50 and 75% of your annual income, which theoretically should allow you to retire in your 30s or 40s (depending on when you begin and how much you can save). Once retired, you live off of interest or small withdrawals from your savings accounts.

The second half of the name is a bit of a misnomer. Attaining financial independence gives you the freedom to retire early, but it does not mean that you do. In the words of Peter Adeney, the founder of the blog Mr. Money Moustache and one of the earliest supporters of FIRE, “early retirement means quitting any job that you wouldn’t do for free – but then continuing right ahead with work in something that works for you, even when you don’t need the money.” You have the freedom to choose how you spend your time, without being constrained by the need for a salaried job.

How do you get to FIRE?

All else being equal, the higher your income and the lower your expenses, the faster you can get to your retirement financial goals. Thus, the more you can live below your means, the quicker you can get to financial independence.

Income does matter in how quickly you can reach your FIRE goals, which is one reason why the movement has attracted criticism. That said, you do not have to be a doctor or a Silicon Valley entrepreneur to employ the principles behind FIRE. If you are aggressively saving your income and cutting expenses, you should be in a better retirement situation than if you had not done these things.

couple planning their retirement representing fire movement

When thinking about living a FIRE lifestyle, it is important to acknowledge that everyone has different financial starting points. If you are beginning with hefty student loans or other debt, it may take you longer to reach financial independence than someone who has no debt whatsoever. Weigh your current quality of life desires against what it would take to meet your FIRE goals, and note that finances are an extremely individualized matter.

Lessons to take away from FIRE, even if you aren’t going the whole way

Start the retirement planning process early

Time is one of the few things that you can never get back. Make it work for you by investing early in retirement, so that you can reap the benefits of compound interest and have the freedom to retire.

Beyond that, planning out your retirement needs can give you insight into whether your current rate of saving is going to be enough to support the lifestyle you want. Having that knowledge early allows you to alter your investing strategy and to have an idea of how your retirement savings will be affected by life changes.

Prioritize saving and investing

This is related to time. The more you can save and invest earlier, the better off you should be. If possible, put savings at the fore rather than waiting till the end of the month to roll any leftover money into a savings or investment account.

Keep expenses low and find ways to increase income

Living below your means, while still enjoying the things that bring you joy, is a great way to build up savings. Increasing your income by taking on “side hustles” or second jobs can help you do that faster.

The savings goals espoused by FIRE advocates may be too aggressive for many people, but the principles behind the movement can be applied by everyone. If you would like more information on retirement planning and making your money work for you, get in touch with one of Morris Financial Concepts’ certified financial planners today.


The opinions expressed herein are those of Morris Financial Concepts, Inc. (“MFC”) and are subject to change without notice. This material is for informational purposes only and should not be considered investment advice. MFC is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about MFC including our investment strategies, fees and objectives can be found in our ADV Part 2, which is available upon request. MFC-19-20