FAQ

FIRE stands for Financial Independence, Retire Early. It’s a movement focused on extreme savings and investment to allow followers to stop working for money earlier than traditional retirement age.

The FIRE movement works by individuals saving and investing aggressively – somewhere between 50-75% of their income – so they can retire during their 40s or 50s.

The goal of the FIRE movement is to achieve financial independence and have the freedom to retire early if desired. This means having enough savings and investments to live off without needing to work.

To achieve financial independence and retire early, you need to drastically save and invest a large portion of your income. You also need to minimize expenses and pursue strategies that maximize your income.

The main principles of the FIRE movement are extreme savings, aggressive investing, frugality, and increasing income streams.

While having a high income can make it easier to save and invest, the FIRE movement is not only for high earners. It’s about saving a large percentage of your income, regardless of how much you earn.

Risks associated with the FIRE movement include market risk (if your investments don’t perform as expected), longevity risk (outliving your savings), and lifestyle risk (the risk of a lower standard of living due to extreme frugality).

You can start your journey towards FIRE by setting financial goals, creating a budget, reducing expenses, increasing your income, and starting to save and invest aggressively.

Yes, there are different types of FIRE. Lean FIRE refers to strict frugality and living on a bare-bones budget in retirement. Fat FIRE refers to achieving financial independence while maintaining a more traditional lifestyle.