Are You Ready to Join the FIRE Movement? Your Journey Begins Here

The FIRE movement changed our conversations about money. 

With it, people realized they could live the life of their dreams now rather than wait for retirement. 

Though the earliest iterations made financial freedom seem out of reach for most people, the movement has morphed into something far more inclusive. 

The FIRE Movement

Explore everything about the FIRE movement, from its humble beginnings to where it is now, the basic concepts, different types of FIRE, and how you can strive for financial independence.

 

What Does the FIRE Movement Stand For?

FIRE is technically an acronym (FI/RE), but its usually written without the backslash. It stands for Financially Independent/Retired Early. 

It means you can afford your life without a job. You’re retired early because you have enough money to never have to work again. 

For many, FIRE means living your life on your own terms. You get to enjoy life without worrying about your boss’s goals or showing up to work on Monday. You’re free to live as you choose. 

FIRE Movement Origins

Though people have been following their passions and living life for themselves for centuries, it was a pursuit limited to the wealthy. Those born into society’s upper echelons never had to worry about work. 

Normal people like us had to fight, scrap, and save to afford life. In the past, we would have had to rely on our families to care for us when we were old. 

Everything changed in the 1930s when Roosevelt’s New Deal lifted us from a depression. Social Security provided a retirement safety net for all, but we still had to work until the last phase of our lives. 

At some point, people started to wonder what would happen if they opted out. What if they didn’t work until age 65? What if they worked for twenty years, then retired when they still could enjoy life?

Early FIRE Influencers

People were likely pursuing this life well before it was popular, but the internet helped the idea spread. 

Some of the earliest financial independence influencers were software engineers who hated their jobs. They scrimped and saved every penny so they could one day break free of the toxic work environments that tried to trap them with golden handcuffs. 

Mr. Money Mustache stands as one of the earliest popular FIRE influencers. He started his blog way back in 2011 and gained notoriety as someone who threw off work’s shackles and lived on his own terms through frugal living and intense saving. 

Tanja Hester, blogger, and author of Work Optional: Retire Early the Non-Penny Pinching Way, started blogging about her journey to financial independence in 2015 and achieved financial freedom in 2017.  She showed the world that you don’t have to live in extreme frugality to achieve the life you want. 

Throughout the twenty-teens, hundreds of other bloggers, YouTubers, and influencers of all stripes joined the FIRE movement, which grew into an unstoppable beast. 

It’s now more popular and accessible than ever. 

How Does the FIRE Movement Work?

At its core, FIRE is about prioritizing financial freedom. FIRE seekers scrutinize their earnings, bills, lifestyle, and options to find a path to early retirement. 

In its infancy, it was all about living as cheaply as possible while earning a high income, but as the idea exploded in popularity, other paths to FIRE arose. 

The days of eating rice and beans to achieve financial independence are over. 

To best understand how it works, we must accept that it’s no longer a one-size-fits-all movement. There are numerous types of FIRE and paths to FIRE, all with different pros and cons. 

Types of FIRE

There are six major types of FIRE discussed around the internet. Here, we explore how each works. Remember, the quest for financial freedom is a personal journey. If none of these works for you, you can create your own path. 

Coast Fire

Coast FIRE lets you “coast” your way to traditional retirement. When you’re at Coast FIRE, you have enough money in retirement savings to have a comfortable withdrawal rate when you turn 65. 

Although you won’t have to worry about money when you retire, Coast FIRE ignores the “RE” part of FIRE. Many seeking financial freedom use the idea as a goalpost; once they reach it, they no longer have to worry about funding their retirement accounts and can focus on other financial goals. Some like working, but knowing they will have financial security in retirement offers peace of mind. 

Calculate Coast FIRE based on expected returns, not current balances. For example, someone with $100,000 in a retirement account might be at Coast FIRE if they have 40 years for the investment to grow, but someone closer to 65 would need a higher balance. 

Discover more about calculating Coast FIRE with our YouTube Video. 

Barista FIRE

Barista FIRE seekers swap their stressful offices for easy jobs, like working as a barista at a local coffee shop. 

Some use Barista FIRE and Coast FIRE interchangeably, but they differ slightly. With Coast FIRE, you need your regular, full-time job to pay living expenses, but with Barista FIRE, you can trade it in for something easier or part-time. 

Those living a Barista FIRE life have almost enough money to survive without work, but they need a little extra to fill in the gaps. Sometimes, it’s for pocket money, and others, it’s for benefits like health insurance. 

Some opt for Barista FIRE because they enjoy the social aspect of work but want to do something easy. 

Lean FIRE

Some folks hate working so much that they’ll do anything to never have to step foot in the office again. Enter Lean FIRE. 

Lean FIRE describes the “lean” approach to financial independence. Here, you will find your frugal warriors, minimalists, extreme couponers, and homesteaders. Folks pursuing this lifestyle learn to live well on less. Many grow their own food, move to low-cost-of-living areas, or take budgeting to the extreme. 

Lean FIRE proves you don’t need to be rich to achieve financial independence. Many achieve this lifestyle while working average jobs. 

Fat FIRE

Fat FIRE serves as Lean FIRE’s solar opposite. It allows you to live a high life while never having to work again. 

People with Fat FIRE dreams expect to retire early with an annual income of over $250,000. Though this lofty dream is out of reach for many, people pursuing this lifestyle typically have high-income, high-stress jobs. Some even have access to generational wealth, which gives them a head start. 

Although Fat FIRE isn’t feasible for most of us, it’s the ideal lifestyle for those who can afford it. 

Slow FI

For some, financial independence is a sprint, but for others, it’s a marathon. 

Slow FI celebrates the journey to freedom. It acknowledges that you can achieve your goals without sacrificing everything you want out of life if you’re willing to take the scenic route. 

With Slow FI, you design your dream life while following the best practices of financial independence to reach the goal before the traditional retirement age, but you’re not so obsessed with the goal that you forget to live. 

Passion FIRE

Partners in FIRE developed the Passion FIRE method to describe people who enjoy working but would rather spend their time and energy working on passion projects than for a company that doesn’t care about them. 

Passion FIRE offers a path to financial independence where you stop chasing a paycheck and start pursuing work that inspires you. 

People on a quest for Passion FIRE are artists, creators, inventors, and entrepreneurs. It offers those born without silver spoons in their mouths a path toward living their dream life. 

What Type of FIRE Are You?

We developed a fun quiz to help you discover which type of FIRE best suits your idea of a perfect life. Take it to find out what type of FIRE you are!

Take the Quiz!

Is the FIRE Movement Legit?

In our world of stagnant wages, insane costs of living, and a political system that doesn’t work for everyone, it seems like any type of FIRE is an achievement limited to a privileged few. 

That’s not true. 

While it’s undeniable that our society needs positive change to lift everyone up, most people currently living a middle-class lifestyle can achieve some sort of financial independence. 

The biggest challenge is finding your path. 

Paths to FIRE

There are thousands of potential paths to FIRE. 

Some folks know they don’t want to work for a living before graduating high school. They start scrimping and saving with their very first job, work their way through college, score high-income jobs, and work hard for ten years to call it quits in their thirties. 

Others are happy with a Lean FIRE life. They live off the land, gardening, canning food, raising chickens, and using solar power to spend as little money as possible while remaining self-reliant. 

And others start side hustles to supplement their income or get started on something they are passionate about. 

Everyone wants something different out of life and has different ideas on how to get what they want. It doesn’t matter if you take the well-worn route or the road less traveled. All that matters is that your path works for you. 

Getting Started on Your FIRE Journey

Are you ready to start your own journey to financial independence? 

Here’s how you can join the FIRE movement. 

Determine Your Path

First, you must decide what type of FIRE you wish to pursue. This step requires introspection and realism. 

Decide what type of life you want and consider how realistic it is for you to achieve it. 

If you’re a low earner with little savings, you probably won’t achieve a Fat FIRE lifestyle – but that’s okay. You can achieve a version of financial freedom that works with your budget. 

Take time to define your life goals. Decide what you want and what you can live without. 

Make a Plan

Now that you know what you want, you must develop a plan to achieve it. In this step, you must think about where you are versus where you want to be and map out the actions you must take to move from point A to Point Z. 

Consider your budget, income, spending, where you live, where you want to live, and how you can make up the differences. Your plan might include investing in yourself to increase your income, moving to a low-cost area, starting a side hustle, or giving up things that aren’t crucial to your happiness. 

Remember, it’s okay for your plan to change over time. Revisit it every year to ensure you’re on track and still want the same things. 

Save More

Now it’s time for the nitty-gritty details. 

Money is crucial for financial independence, so you need to start saving as much as possible. Cut cable, stop eating out as much, opt for generic groceries, and find ways to cut back on basic living expenses so you can funnel more money into savings. 

Build your emergency fund and your sinking fund. The emergency fund is for unexpected expenses, while the sinking fund is for things you can anticipate, like Christmas shopping or needing a new appliance.

Though experts recommend a three-month emergency fund, those seeking financial independence need much more. You will likely need about a year of living expenses in your savings account, which will help you weather any financial storm when you quit working. 

Invest as Much as Possible

Investing is the secret ingredient to achieving financial independence. Your savings account is for emergencies, while your investments are for retirement income. 

First, you should invest for traditional retirement. If your job offers a 401K with a match, invest enough to get the full match, which is basically free money. Investing in a retirement account has other bonuses as well, like tax advantages, and gives your future self financial security in old age. 

Next, you must invest in non-retirement brokerage accounts, which allow you to access your money before you reach full retirement age. 

Investing can be complicated, so if you aren’t sure where to start, check out our guide on investing for beginners. 

Stick With It

The journey to financial independence is wrought with twists, turns, and challenges. Life rarely goes exactly how we planned. Unexpected expenses pop up. People get laid off or start families. Priorities change. 

That’s life. 

But that doesn’t mean you have to give up your dream of financial freedom. You can change your plan as life changes and continue pursuing the path to FIRE that works for you. 

Is the FIRE Movement for Me?

The FIRE movement isn’t for everyone. Some people are perfectly happy working their nine-to-five jobs with a secure paycheck, while others love their high-paced corporate environments. 

Everyone is different. The secret that other FIRE aficionados sometimes forget to tell you is that it’s ok. It’s okay not to want to pursue financial independence. It’s okay to be happy where you are or to prioritize living a good life now. 

But if you’re reading this and thinking, “I wish I was free to pursue my passions,” perhaps you should consider joining the FIRE movement. 

Let us be your partners on your journey to the life of your dreams.