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What is the FIRE movement + how to make it a reality?

Save more, spend smarter and let your money go further

In a world of stagnant wages and rising costs of living, many people are looking for a way out of the rat race. That is why radical investment strategies and risky business ventures are so popular.

Believe it or not, there is actually a reliable way to achieve financial independence, but it’s far from a get-rich-quick scheme. Financial Independence, Retire Early (FIRE) is an increasingly popular strategy for breaking free from the daily grind and building your ideal future. Here’s what you need to know about how it works.

What is the FIRE movement?

The FIRE movement encourages consumers to save and invest aggressively while they are young in order to retire decades earlier than usual. There is no specific FIRE timeline; that depends on your specific goals and financial situation. Many people who work for FIRE try to retire in their 30s and 40s.

However, the FIRE movement isn’t always about retiring early. Some people are able to achieve their FIRE goal and continue working because they enjoy what they are doing or because they are not sure about the next steps to take. For them, FIRE offers the peace of mind that comes with not completely relying on your work to make ends meet.

Some people choose to work toward FIRE so they can take a sabbatical, change careers, or become digital nomads. Others want to reach FIRE so that every extra cent they earn can become a legacy they leave behind.

Types of FIRE

There is no one way to achieve FIRE. In fact, there are many schools of thought. Here are the most common types of FIRE and how they stack up:


People who don’t want to worry about budget constraints when they retire can opt for Fat FIRE, where your investments significantly exceed your annual cost of living. Fat FIRE may suit those who don’t believe in pinching pennies and want to enjoy the luxuries life has to offer.

barista FI

Because health insurance is one of the biggest costs for people who don’t have access to an employer plan, some FIRE supporters will retire from their regular jobs and join a company that provides part-time employees with health insurance, such as Starbucks. This is known as Barista FI.

Coast FI

Coast FI is a financial independence movement where the goal is to have enough invested that you can afford to stop paying retirement contributions. Once you reach Coast FI, you can either continue to contribute towards early retirement or focus your resources on other goals, such as starting a business, contributing to a child’s college education, traveling abroad, and more.

Slow FI

The Slow FI movement believes in achieving financial independence, but not in the crushing pace of traditional FIRE. Slow FI is a more conservative path, avoiding the huge sacrifices associated with traditional FIRE strategies.

Retire early?

Reduce your expenses

If you want to retire early, one of the most important things you need to do is cut your expenses. This frees up more money to invest and save. Keep track of your expenses on a budget and find a balance between saving for FIRE and continuing to enjoy your life.

Increase your income

While lowering your expenses is key to achieving FIRE, increasing your income is another crucial aspect. There is a limit to how much you can save by being frugal, but there is no limit to how much you can earn.

Increasing your income can include asking for a raise, switching industries, starting a side business, and more.

Understand your numbers

One of the main reasons people fail to meet their FIRE goals is that they don’t properly identify how much they’re saving, how much they’re spending, and how much they should retire early.

Start tracking your expenses to get an average of how much you usually spend per month. It’s important to be realistic — not optimistic — when calculating your average expenses. Use one of the many FIRE calculators to get a basic estimate of how much you should save.

You’ll need to enter how much you spend annually, how much you save annually, when you hope to retire, and how much you currently have saved. The calculator should show if you are on track to achieve your goals or if you are way off course.

Talk to a financial planner

Retiring early is one of the biggest financial decisions you can make. And before you take that leap, talk to a third party to make sure you’ve thought of everything.

A financial planner can point out potential problems with your plan, such as whether you can afford huge health insurance premiums or annual property tax increases. They can also recommend the best types of investment accounts to open and how to reduce your tax liability.

Create automatic savings

Saving money is hard, but saving money to retire early is even harder. You can make it easier on yourself by automating your savings.

If you have a 401(k), you can increase your contributions by talking to your HR or payroll. The money comes automatically from your salary. If you receive a raise, your 401(k) contributions will also automatically increase.

If you invest in an IRA, you must arrange an automatic contribution through the investment company. Determine how much you can afford to automatically save each month.

Find inspiration

When you work towards FIRE, it can be difficult to find like-minded people around you. That’s why it helps to get inspiration from external sources such as FIRE blogs, podcasts and forums. Some popular resources include the Choose FI Podcast, the Mad Fientist blog, and the 1500 Days to Freedom blog.

Some of these communities even have local gatherings where you can spend time with real people who share your financial priorities and future dreams.

Save more, spend smarter and let your money go further

Zina Kumok Zina Kumok

Zina Kumok is a freelance writer specializing in personal finance. As a former reporter, she has covered murder trials, the Final Four, and everything in between. She was featured in Lifehacker, DailyWorth and Time. Learn how she paid off $28,000 in student loans over three years at Conscious Coins. More from Zina Kumok


Financial Independence, Early Retirement (FIRE) is a popular strategy for building your ideal future. Here’s what you need to know.

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