What is FIRE?
“FIRE is an acronym which stands for Financial Independence Retire Early. There’s a growing movement of people who are practicing FIRE principles and retiring decades earlier than expected as a result.
Ambitious, often middle-income earners are using a simple formula of high savings rates (50-70% of their incomes) + frugal living (minimalism) + low-cost stock index fund investing (Warren Buffett’s standard investment advice) in order to reach financial independence within a short time period — usually around 10 years. For obvious reasons, FIRE is sometimes referred to as “the ultimate life hack.
While not all members of the fire movement embrace traditional retirement, the milestone for having reached FI (Financial Independence) is the moment when the money you earn from your investments will pay for your expenses. When you hit that tipping point, the choice to work or not work is now yours to make and you are in control of how you spend your time and your life.”