The FIRE Movement

A radical new approach to working, saving, and retiring.

Retire Before 50 and live your best life.

That is the message of the FIRE (Financial Independence, Retire Early) movement, which is drawing interest worldwide.

Adherents of the FIRE movement contend that many young adults can pursue financial freedom and retire in their 40s (or even 30s) through sufficient commitment, investment, and resourcefulness. Most people think this idea is not only radical, but also radically unrealistic for many. The truth is, that may not be the case.

Is it really possible to retire so young? Actually, yes – there are people who have done it, and their stories often appear on financial websites. These early retirees tend to have some things in common.

They lived well below their means in their 20s and 30s. They spent far less than their peers did, and that gave them extra cash, which they could use to pay down their debts and invest.

They invested enthusiastically, with a focus on building their net worth. They started the effort early in life and kept at it.

They retired with purpose. They were motivated to do something extraordinary with their lives; they had a dream to realize, a calling to answer, and a reason why they did what they did.

Those who dream of retiring before age 50 might want to emulate these behaviors.

Of course, there are a few extra attributes that give these early retirees a head start. Read enough FIRE stories, and you will probably notice three other common characteristics about these unconventional retirees.

They sold a company or had a career in a “hot” industry. Early entrepreneurial success or “right place, right time” often applies.

They are single and/or child-free individuals. Raising children implies greater household spending for many years to come, and FIRE is about adopting frugality today in exchange for prosperity tomorrow.

They are in good health. Most people get their health insurance through employer-sponsored plans. Early retirees face the prospect of paying for their own coverage. Anyone with a chronic (or for that matter, suddenly serious) medical condition could face a financial strain in a FIRE scenario; those who lack health coverage need to be prepared to pay for their own medical expenses.

While these may give the FIRE examples a head start, it is still realistic for many people to retire early. If you want to retire early, you need to pursue that goal from a young age. Live frugally, invest enthusiastically and retire with a purpose.

That is not to say that all people should be aiming to retire by the time they are 40. Some people prefer working. In fact, studies have shown that people are working longer. Not because they need to, but because they want to.

Whether your goal is to retire young with financial independence or work later into your life, it is important to set clear goals for yourself. These goals will ensure your vision for the future becomes a reality.