What You Need to Know About The Fire Movement
F.I.R.E Movement Explained
The catchy phrase "Financial Independence, Retire Early" is an aggressive approach to saving, with the idea of setting you up to retire at the early age of between 30 and 40 years old.
Traditional retirement plans or budgeting techniques have allowed for most people to set their sites at retiring at around the age of 65. However, FIRE follows a different approach where the goal is to save 50%-70% of your income as opposed to the common 30% that already is a stretch for most people.
The individual planning to commit to the FIRE Movement takes on a minimalist lifestyle, keeping their expenses low to allow for maximum saving.
In addition to keeping their cost of living low, the focus is to raise their income and invest aggressively so that financial freedom will come knocking on the door long before their 60s.
Where most people dream of retirement as sitting on an island, sipping Margarita's all-day, the FIRE movement has its hopefuls hoping to scale back to a part-time job, or complete retirement, but the goal is more on quality of life as opposed to slaving away in a corporate career up until the retirement age.
Who is the FIRE Movement for?
Financial independence is a goal worth aiming for.
For those who have struggled with breaking free from debt, or needing a goal, the idea of aggressive saving could be the inspiration you need to get started focussing on your future.
However, it is easier said than done, but still worth considering as a source of inspiration.
However, to achieve any level of success, you need to be disciplined with your income as you will need to save up to 70% of what you earn.
Not only do you need to save a lot, but timing is a factor to consider as well. The current world crisis makes the stock market a volatile place where many industries have taken a large knock.
With the Fire Movement focussing on increasing your income and realizing the benefits of positive returns, it makes it more difficult for the phrase "Financial Independence, Retire Early" to be realized.
Who the Fire Movement isn't for
If you are planning to have success, you need to have a tight reign on your spending habits.
Being able to manage your credit card is the first discipline you need to master. You won't be able to plan towards high saving goals if you are struggling to pay off debt, no matter how many "points" these credit card companies incentivize you with.
FIRE is also not going to help you escape a life you hate. If you are unhappy with your job, perhaps the goal should be to get a new one.
The reason I say this is because my husband and I were traveling last year while maintaining online jobs.
The thing we realized is that we loved our travels so much because we had a balanced life. As extraordinary as watching TV all day sounds, or sun-tanning the whole summer seems, doing nothing gets boring.
Instead of dreaming of "what could be", a good idea may be to focus on setting up your life so that you achieve an element of balance now.
Identify the level of risk that is realistic to take on to achieve the financial freedom you so hope to achieve.
Personally, finding meaning in the now, and saving to achieve a healthy balance of income for retirement, is something I aim for.
I am not a financial advisor, so please do consider speaking to a professional to outline the steps that you should take that best fir your current circumstances.