financial independence and retire early

F.I.R.E stands for “financial independence, retire early,” and it's a movement wherein people attempt to gain enough wealth to retire far earlier than the. FIRE is finance and philosophy. FIRE (short for Financial Independence, Retire Early) is served in many flavors, all of which are based on core. Ever dreamed of retiring in your 40s? With more women saying that Financial Independence, Retire Early (FIRE) is the way to do it.

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Can you afford to retire early? Five ways to get your financial independence

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Whether you want to retire at 45 or 62, retiring early requires a good understanding of one’s finances and, more importantly, a good financial situation. These are the five things to look at when deciding if you can retire early and how to improve each one of them to gain your financial independence.

Early retirement doesn’t necessarily mean you have to give up work entirely, it’s simply a financial and mental state wherein work is something you can choose to do instead of being forced to do it. 

With that in mind, it’s easy to see why having a good financial backing is so important, and this is compounded by the fact that using your pension earlier means getting paid less in order to make it last longer. 

This is the simple reason many decide to work past retirement age: to build up retirement savings and add to their pension pots for as long as possible. 

To retire early it is recommended that you be financially independent, meaning that if any and all income is stopped you will have enough money to avoid being evicted. 

But, having a seven-figure retirement fund is not the only way to afford financial independence and an early retirement, there are five other indicators that can tell you whether you can afford it. 

READ MORE: Failed Dragons’ Den pitch outsells Monopoly in its first year

Retiring early may not be as unrealistic as it seems (Image: GETTY)

The FIRE, or Financial Independence, Retire Early movement, looks to help people achieve just that through a series of lifestyle changes, and five of their top tips for early retirement are:  

No mortgage

A mortgage is one of the biggest, and most long-term, financial commitments one makes in life, so paying it off as soon as possible can be hugely beneficial for your financial stability. 

Not having this costly bill can see monthly outgoings decrease and increase disposable income which can be used to save or invest for retirement. 

This option, however, is not always available to everyone and if overpaying a mortgage you must consider any early repayment charges as well. 


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No debt

Having financial independence doesn’t necessarily mean you’re financial history must be spotless.

Taking out loans and using credit cards has become a part of daily life for millions of people, and while it’s not an ideal situation, the key to financial stability is clearing all debt. 

Paying off loans and credit cards should be a monthly priority, as much as paying your rent, even if you’re just able to pay off the minimum required. 

This will help you avoid penalty fees and harming your credit score, which indirectly helps you get out of debt faster.

Guaranteed retirement income

Going into early retirement is not recommended if you don’t have a guaranteed income for the small, daily expenses. 

Having a guaranteed retirement income, emergency savings and other investments is ideal (Image: GETTY)

This will generally be a pension pot wherein contributing as much as possible as early as possible in one’s career will leave them in the best possible standing to retire early. 

However, having a small pension pot doesn’t necessarily mean that early retirement is completely out of the question.

Simply consider your overall financial situation, taking into account savings, investments and any other passive income you may have such as renting a room in your house. 

If these are enough to cover daily expenses in retirement then retiring early could still be a possibility. 

It’s also vital to note that the earliest age anyone can access their state pension is 66, and this is expected to rise consistently as time goes on.

So, someone retiring next year at the age of 58, while only eight years away from the current retirement age, should actually budget to only get access to their pensions by the time they turn 68. 

Emergency savings

Having emergency savings, as Covid showcased, should be a non-negotiable for households in general. 

Going into an early retirement increases their importance as you won’t have the option to ask for a salary advance should there be any expensive emergencies. 

Other investments

With daily expenses covered by your pension and an emergency fund fully-stocked, the next aspect to look at when deciding where to put your money should be other passive income streams. 

Too often people put all of their retirement savings into a single pot, as it is the easiest option. 

However, splitting your funds into multiple retirement investments can compound the amount of passive income available to you in early retirement. 

These extra investments and savings can be used for the luxuries that everyone looks forward to in retirement: holidays, hobbies and enjoying life to the fullest. 


The Basics of FIRE: Financial Independence and Early Retirement

Image for article titled The Basics of FIRE: Financial Independence and Early Retirement

Financial independence? Sounds great! Retiring early? Sign me up. The FIRE movement (financial independence, retire early) embraces the concept of saving most of your income in your 20s or 30s so you can retire in your 30s or 40s, but this elusive goal requires a good, stable income and an extreme dedication to saving.

While it’s true the value of compound interest from investing early in your 20s can provide a large nest egg, FIRE’s seductive premise has its share of detractors, too. The movement has been criticized for overly optimistic projections of savings, ignoring child-rearing, promoting unrealistic long-term consumption habits and for simply being unattainable to anyone that isn’t already privileged with wealth. You might want to take “early retirement” with a grain of salt.

What is FIRE, exactly? 

When you think about retirement age, you probably think of someone in their late 50s or 60s, and there’s a reason for that—it’s the norm. After all, Social Security benefits start at age 62, and you can withdraw from your Individual Retirement Account without a penalty at age 59.5. FIRE adherents generally want to retire much earlier, in their 40s, 30s, and sometimes even in their 20s. (You’re probably thinking something along the lines of, “This sounds great, but what if I only make 35K a year and I’m drowning in student loan debt?” We’ll get to that—many FIRE enthusiasts wholeheartedly acknowledge the privilege of the FIRE movement.)

While early retirement is a common goal in the FIRE community, philosophically speaking the emphasis is on financial independence. “It’s less about retiring early and more about having the freedom to pursue your dreams and ambitions,” says Deacon Hayes, author of You Can Retire Early! Hayes adds that FIRE is really about “the freedom to choose to work or not.”

What’s known as The Rule of 25 is a more concrete definition of financial independence: When your net worth is 25 times your annual expenses, you’re considered financially independent. (e.g., if your annual expenses are $40,000, you’re financially independent when your total net worth is $1,000,000).

Image for article titled The Basics of FIRE: Financial Independence and Early Retirement

Who is FIRE for?

If you have a high-paying but soul-sucking job, FIRE probably sounds pretty good right now. Tanja Hester, author ofWork Optional: Retire the Non-Penny-Pinching Way warns against this, however:

“Retiring early because you don’t like your job is a bad reason to do it, and is a recipe for being bored or aimless when you get there,” she says. “Achieving FIRE is a big deal, and it takes a lot of focus and determination. It’s not for those who want to get rich quick, or for those who just hate their job.”

It’s not about an escape from your career, but rather a long-planned all-around lifestyle upgrade. “A good reason to retire early is that you have an alternate vision for your life that you’re eager to pursue, but which you can’t pursue while employed full time,” says Hester. “Achieving financial independence allowed us to leave that career chapter of our lives from a place of gratitude and appreciation, and move onto our next chapter that we’re in control of.”

While financial independence does require cutting back on expenses, it also requires a decent income, as many in the FIRE community acknowledge.

“There’s a huge element of privilege to being able to do this,” says Liz Thames, author Meet the Frugalwoods: Achieving Financial Independence Through Simple Living. “We have a real problem with the income gap and people who do not make a living wage. So I want to make sure that we recognize that the ability to put distance between your income and your spending is often a privilege.”

Hester adds that it’s not realistic to think that “everyone can save enough to retire early in a country that doesn’t value a lot of professions or commit to a living wage. So while plenty of folks have become financially independent without earning six figures, earning more certainly helps speed things along,” she says.

The rules behind FIRE

The basic math behind FIRE is simple: spend less than you earn and save the difference in low-fee investments like index funds. Other investments, like rental properties and passive income streams, are a big part of achieving financial independence, too. And so is frugality: The less money you need to live, the less money you need to save in order to fund the rest of your years.

So while the rules are simple, getting there is, of course, another story. Reaching FIRE involves the same concepts of reaching any financial goal, and it ultimately comes down to behavior and privilege, rather than an exercise in denial.

Image for article titled The Basics of FIRE: Financial Independence and Early Retirement

As an example, Thames lives a frugal lifestyle that many would view as sacrificial, but her frugality has nothing to do with depriving herself. “I don’t miss out on anything in my life being frugal,” she said. “I spend money on things that are important to me. There’s just not a lot that I need to buy to live a very a fulfilling life.”

The first steps to reach FIRE 

If any of this sounds appealing and realistic to you, the experts all pretty much agree: The first step is figuring out your “why.”

“If you want to retire early, you need to have a strong ‘why,’” says Hayes. “Do you want to quit your job to start that business you always talked about with your friends? Do you want to have more than two weeks per year of vacation time? Do you want to spend more time with your loved ones? Whatever your why, let that be the motivating factor to create a plan and stick to it during the tough times. Once you have that why, you want to determine your path.”

The second step? Tracking your expenses. Check out your bank statements, credit card statements, online budgets, and decide which purchases are meaningful or necessary.

“Most of us are shocked to realize how much we actually spend,” Hester said. “After you’ve started tracking, figure out how much your lifestyle costs per year, look for what you might be able to cut out to shrink that number, and then work on increasing your savings rate. Those are the hardest parts of the journey, and the rest is just a matter of waiting for the money to add up and compound.”

Once you’ve conquered your spending, it’s time to look at your net income and compare. Thames said to subtract your fixed mandatory expenses from your income and then adjust your discretionary expenses as necessary.

From there, FIRE comes down to math and mechanics. In an episode of his podcast, Mendonsa suggests ten “pillars” of financial independence. Those pillars are:

  1. Lower your housing costs
  2. Drive used cars
  3. Cut the cable cord
  4. Lower your tax liability by maxing out your tax-deferred vehicles such as your 401(k), 457, 403(b), IRA, HSA, etc.
  5. Switch to cheaper cell phone service
  6. Use credit card rewards and smart financial habits to help fund your travel
  7. Reduce your grocery bills
  8. Increase your income and consider adding multiple income streams
  9. Invest via low-cost index funds
  10. Use the 4% rule: if you can safely withdraw 4% from your nest egg each year to cover your expenses and still have enough money down the road, you’ve reached financial independence.

Like any other financial goal, the math is easy but it requires resourcefulness, diligence, and patience. Whether FIRE is realistic, however, is up to you.

This story was first published in 2017 and was updated on October 19, 2020 with more current information.

Personal Finance


The FIRE Movement: What Is Financial Independence, Retire Early?

The FIRE movement first gained traction in 1992 when writer and speaker Vicki Robin teamed up with former Wall Street financial analyst Joe Dominguez to publish the first edition of their bestselling book, “Your Money or Your Life.”

The book, which was updated in 2018, offers advice on lifestyle changes, such as simple living and frugality, which form the backbone of the FIRE movement. Since the publication of “Your Money or Your Life,” many proponents of financial independence, retire early have subscribed to the book’s tenets in pursuit of retirement or a work-life balance that’s more life than work.

What’s the Goal?

Contrary to popular belief, not every FIRE adherent is looking to jump straight from the boardroom to the RV. In fact, many of those who seek financial independence do so not because they don’t want to work, but rather because they want to work at a job that aligns with their passions and brings them a sense of fulfillment.

Freedom from financial constraints offers them the opportunity to merge their vocation with their values, which, for them, is worth the material sacrifice.

The FIRE movement is more about a person’s relationship with and attitudes about money than about wanting to spend the second half of their lives lazing about on a beach somewhere or puttering around the garage. It’s about values and how those values shape a person’s lifestyle, both during and after his or her time in the workforce.

Take, for example, chartered accountant Barney Whiter. His early lessons concerning money came from watching his parents struggle to pay their mortgage after a major recession in the U.K. sent interest rates skyrocketing.

“I picked up on the idea that it was scary owing the bank a lot of money,” Whiter told BBC Worklife in 2018.

In response, he made some significant lifestyle changes, including biking to work, cutting expenses and putting half — yes, half — of his income toward his retirement savings each month.

Whiter was able to retire at age 43.

Should You Join the FIRE Movement?

Maybe your relationship with money hasn’t been marked by any traumatic experiences. Maybe you’re not willing to commit to such extreme austerity. You may still find a version of FIRE that works for you.

For example, Lisa Harrison, founder of the blog and podcast Mad Money Monster has adopted a variation on the FIRE philosophy. It’s called financial independence optional retirement, or FIOR, and it takes into account the fact that she plans to continue working, albeit on her own terms, once she achieves financial independence.

What’s important when considering earnestly pursuing financial independence is that you have a clear vision for your future and realistic expectations. Once you’ve defined your goals and your ideal retirement lifestyle you’ll know which version of FIRE will help you achieve them while allowing you to enjoy life to the fullest now. And that’s different for everyone.

Our work gives our lives a sense of meaning. Some people love their jobs. For most employed Americans, career and identity are inextricably entwined. Without a plan for replacing the value and purpose your job brings to your daily life, FIRE followers may find themselves adrift.

In their 2014 article “Finding Meaning During the Retirement Process: Identity Development in Later Career Years,” researchers from Boston University and the University of Melbourne discussed the differences between the traditional career model, which follows a sequence of career stages, and the contemporary view of careers, which is characterized by “a lot of change, often self-directed, and movement across various boundaries, such as occupations, employing organizations, industry or sector specializations, different levels of work involvement … and type of employment.”

Graphic about the 5 stages of career change


In the contemporary model, the authors theorize, people transition and adapt to new identities more frequently. In this respect, retirement is similar to a career transition from one organization to another, which is especially true for people who choose to work when they don’t have to.

Joining the FIRE movement may give you a sense of control over your finances. After all, that’s what independence is all about — having control of your present and your future. You may not have control over the markets or the state of the economy, but with a shift in mindset and hefty dose of discipline, you can make the lifestyle changes, both big and small, to determine the trajectory of your financial future.

And you don’t have to go all-in on the FIRE movement to do so.

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How Much Will You Have to Sacrifice in the Name of FIRE?

Financial experts advise people who plan to retire at the traditional retirement age of 65 to save 12 to 15 percent of their income in a retirement savings account.

This retirement savings goal is far below the amount needed to implement any variant of the FIRE strategy. While the FIRE movement doesn’t always require what, for many, is an unsustainable lifestyle, you will have to make some sacrifices now to make early retirement a reality.

By now it should be clear that FIRE is more than a simple exercise in number-crunching and budgeting for retirement. It’s a way of life, and it’s not for everyone.

However, the FIRE — and FIOR — movement has been adapted over the years to accommodate different levels of extreme saving and investing.

Consider these alternative subgroups:

You save more for retirement than the average American worker, enough to fund your ideal lifestyle during your retirement years.

You adopt a lean, minimalist lifestyle during retirement, spending less than the average retiree.

Barista FIRE
You are able to quit your day-job, but you have to work part time to supplement retirement savings.

Coast FIRE
You save just enough that compounding allows you to “coast” the rest of the way to your retirement saving goal.

Saving and investing up to 70 percent of your income is a daunting enterprise, but for those who have grown tired of keeping up with the Joneses, it may not feel like a huge sacrifice.

For Whiter, it was a small price to pay for freedom.

“I felt like I was in a prison camp, working to sustain a lifestyle I didn’t actually want.”

Graphic showing a pyramid of steps for achieving FIRE


Is FIRE Achievable?

Critics of the FIRE movement cite the inaccessibility for a large percentage of Americans.

According to the Federal Reserve, many adults struggle with saving for retirement and many people who have some retirement savings “commonly lack financial knowledge and are uncomfortable making investment decisions.”

Furthermore, the Fed reports that “people answer fewer than three out of five financial literacy questions correctly, with lower scores among those who are less comfortable managing their retirement savings.”

These are important findings because aggressive investing is paramount to a successful FIRE strategy, and financial literacy underlies people’s decisions about the types of investments needed to execute FIRE, or any other long-term financial plan.

Critics also point to the unrealistic expectations set by the success stories of FIRE followers who have had opportunities that elude most working-class Americans. Few of us have the leverage of a large inheritance or real estate investments or high-performing portfolios to get us started.

The Plutus Foundation, a nonprofit that “provides grant money and resources to provide opportunities for the financial media to create, develop, and administer community-based programs that enhance financial literacy, education, and empowerment” has compiled a list of FIRE bloggers who offer a more realistic take on financial independence with advice that the average person can use.

In addition to not having enough income to get started, there are drawbacks to even successful FIRE strategies.

According to Greg Klingler, director of wealth management at the Government Employees’ Benefit Association in Fort Meade, Maryland, these downsides include:
  • Missing out on retirement contributions
  • The risk of outliving your savings
  • Less Social Security income
  • Pricey health care
  • Boredom
  • Limited activities
  • Well-being risks

Depending on your plans for your early retirement, many of these may not apply. For example, if you plan to continue working for your employer, you will still have health care coverage, mental and physical stimulation and a sense of purpose.

You can’t control financial shocks or economic crises, so there will always be a risk involved when it comes to the stock market, the stability of Social Security, the declining health of an aging parent or a global pandemic such as COVID-19.

But if you plan carefully with the help of an experienced financial advisor, you can mitigate the possibility of outliving your savings. Consider purchasing an annuity that guarantees lifetime income for added financial security in retirement. As with FIRE strategies, annuities can be customized to fit your financial plan.

Before you can decide if FIRE is something you can — and want — to achieve, you need to take inventory, not just of your assets and debts, but of your values, hopes and dreams for the future.

Financial independence and retiring early are worthy goals but not in and of themselves. Consider the source of the FIRE movement. When Vicki Robin and Joe Dominguez set out to test the limits of frugality, it was in an effort to align their actions and behaviors with their values and beliefs. This is referred to as “intentional living,” and it is more rewarding than a number on a bank statement.

Please seek the advice of a qualified professional before making financial decisions.

Last Modified: July 12, 2021

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7 Cited Research Articles writers adhere to strict sourcing guidelines and use only credible sources of information, including authoritative financial publications, academic organizations, peer-reviewed journals, highly regarded nonprofit organizations, government reports, court records and interviews with qualified experts. You can read more about our commitment to accuracy, fairness and transparency in our editorial guidelines.

  1. Board of Governors of the Federal Reserve System. (2019, May). Report on the Economic Well-Being of U.S. Households in 2018. Retrieved from
  2. Hartman, R. (2020, June 3). The Case Against Retiring Early. Retrieved from
  3. Mad Money Monster. (2017, November 17). F.I.O.R. Financial Independence Optional Retirement. Retrieved from
  4. See, C. (2020, May 27). 12 FIRE Bloggers Who Are Realistic Role Models. Retrieved from
  5. Stokel-Walker, C. (2018, November 2). FIRE: The movement to live frugally and retire decades early. Retrieved from
  6. The Physician Philosopher. (2020, February 22). Review of Your Money or Your Life. Retrieved from
  7. Wang, L., Hall, D.T., & Waters, L. (2014, October). Finding Meaning During the Retirement Process: Identity Development in Later Career Years. Retrieved from

Could you retire in your thirties with FIRE?

Are you working to live, or living to work? Followers of the FIRE movement (Financial Independence Retire Early) budget carefully so they can invest a greater proportion of their take-home pay. Is a life of extreme frugality worth the extra years of financial freedom later on - and how could you apply the principles of FIRE to your own finances? 

This week, Claer helps listeners Amy and Rory on their FIRE journey, with expert tips from Mr Money Mustache, AKA the US blogger Pete Adeney, and Kristian Danielson, the person behind the r/FIREUK subreddit. 

Further reading:

-Here is Mr Money Mustache’s blog

-You can get involved in the FIREUK subreddit here

-If you want to get started in investing, listen to our previous episode

-Claer’s free-to-read column about the problems with FIRE is here

See for privacy and opt-out information.

Transcripts are not currently available for all podcasts, view our accessibility guide.


Meet the people trying to save enough to retire by 40

For many, it is an idea of heaven – shutting down the computer one last time and leaving the office in the full knowledge that you are financially stable enough never to have to return. And all at an age that most people would consider to be barely midway through their working life.

But a growing movement is focused on just that: encouraging people towards a mixture of extreme saving, frugal living and smart investment that will allow them to stop working and put their feet up decades before their peers – in some cases, when they are still in their 30s. And the Financial Independence, Retire Early (Fire) doctrine claims that people do not need a six-figure salary to get there.

At a time when many people are struggling to ensure they have enough money when they do retire or even to get them from month to month, the idea will probably appear absurd. And that is before you hear that it often involves saving between 50% and 75% of post-tax earnings. The advocates of Fire are undaunted, however.

Saving to live a dream

Alan Donegan says he achieved his financial independence before turning 40. As a result, he is living his dream by temporarily decamping to Los Angeles to work on his movie screenplay.

Along with his partner, he has built up an investment portfolio worth £1m after saving from his income as a consultant on start-ups and from the establishment of a business training school.

They now claim that they can support their current lifestyle without having to work. Saving so much is a tall order at any age and Donegan says that instead of spending money, they invested it.

“Most people find that as they earn more, they spend more. We didn’t do that. Our motto is ‘Buy your freedom first,’” he said.

They own a two-bed flat in Basingstoke and drive a compact Skoda Citigo, which cost £5,000. “I do like a coffee in a nice cafe, but generally I spend in line with my values,” he said.

One of the criticisms of the Fire movement is that it excludes people on low incomes who may find saving any small amount, let alone half their take-home pay, impossible.

Donegan admits that saving enough may be a struggle for someone on £15,000 a year, but at £40,000, it is doable if you are willing to change your life and spending habits. But not everyone is.

“It can actually be harder for people with big incomes and spendy lifestyles to actually get to financial independence,” he said.

The resulting freedom makes the early sacrifices worthwhile, according to Donegan. “My dreams of becoming a screenwriter may never come true, but at least I’m free to give it a go,” he said.

But how can you do it?

So how much do you need to be retirement-ready? According to the principles of Fire, the target is a pot of money worth 25 times your annual spending – not salary.

So if you can get by on £10,000 a year, you need £250,000. If you need £40,000, your target is a cool £1m.

The more you save, the faster you will get there. If you set aside 10% of your income, it would take 51 years to build savings worth 25 times your income, according to Pete Adeney, a Canadian personal finance blogger known as Mr Money Mustache, who is a standard-bearer for Fire. Increase that to 15%, and you could retire eight years sooner, he said.

If you can save 50% of your income, you can hit that 25 times target in 17 years. At 75%, it falls to just seven years.

Underpinning this is something called the 4% rule, set out in a 1998 paper by three professors at Trinity University, Texas, which states that if you keep your pot of money invested in stocks and shares you can live off the “safe withdrawal rate” of 4% a year and your money will never run out, although you may need to spend less during recessions.

The “movement” encourages followers to invest in low-cost exchange-traded funds (ETFs), with the Vanguard fund range particularly popular, as charges can be as low as 0.06% a year, against 1.5% on some actively managed funds.

This minor difference adds up over time – if you invested £100,000 and it grew 6% a year for 30 years, you would have £374,532 with annual fund charges of 1.5% a year. If the fund charged 0.06%, you would have £564,676. That’s £190,144 more, purely due to charges.

Growing influence

Damien Fahy, director of the personal finance website, said Fire was going mainstream, particularly among millennials. “It is an extreme version of traditional financial planning, wrapped up in an almost cult-like movement.”

However, he questioned whether the 4% rule was sustainable if you were retiring in your 40s or even 50s, as your money would have to last for four or five decades, and a lengthy stock market slump or financial emergency could throw your plans off course.

The safe withdrawal rate assumes inflation at 3% and an average investment return of 7%, which is by no means assured.

“If your money starts running out, you might struggle to return to the workplace if you’ve been out of it for a long time or ill,” he said.

Stephen Lowe, communications director at retirement advisers Just Group, said the vast majority of people were not saving enough to retire at 65, let alone 45.

“For most, Fire is little more than an abstract idea but if it captures people’s imagination, that’s got to be a good thing,” he said.

It’s not for everyone

Lynn James, who writes the Mrs Moneypenny blog, argues that Fire is only realistic “if you have a big salary, low mortgage and no children”. And not everybody wants to spend their 20s being frugal. “At that age I wanted to travel the world, eat amazing food, go to concerts and experience life.”

James’s parents died aged just 58 and 63, before spending any of the money they saved, and that has made her sceptical about planning too far ahead. “It is totally sensible to save more when you’re young, but also life is for living.”

Jamie Jenkins, head of global savings policy at Standard Life Aberdeen, said Fire was beyond most people’s reach, but the underlying principles of financial discipline were good. “Everyone should be looking to save around 15% of their salary into a pension, more if possible,” he said.

Another argument against the movement is that work gives value and purpose to many people’s lives, and retiring early may leave a void as a result.

Fire has its critics but makes sense to Fiona Silk, 40, a landscape designer from Penge. “A large part is about reduced consumption and mindful purchases, rather than blowing cash on things that are ultimately meaningless. That all that gets lost in the furore about retiring early.”

With a current net worth of well under £100,000, Fiona did not expect to be able to retire early. “However, there is a good chance I won’t have to bust my guts until 65, and will be free to take on less work or more meaningful work. Others might reach that freedom much earlier, if they don’t blow their pay on booze, holidays and meals like I did when I was younger.”

Minimal living to the max

At the age of 26, Alvar Damen is saving £1,500 a month towards retirement but would like to go even further.

“My aim is to earn as much as possible, spend the minimum and save the maximum. That way I can be financially free sooner rather than later,” he said.

The Dutch national has lived in Edinburgh for two years and has a podcast called Financial Independence Europe. He benefits from rent of £675 a month, considered low for the centre of Edinburgh. “I walk everywhere, including to work, so I don’t need a car.”

He also avoids wasting his earnings from his IT job and side projects on “itty-bitty things”. “I keep recurring bills down such as energy and insurance, pick up money hacks at, and shop at Lidl,” he says.

Damen invests his £1,500 into an index tracker fund from Vanguard, which invests in a spread of global stocks with an annual charge of 0.25%.

He uses his tax-free Isa allowance and is saving for a property deposit using the Lifetime Isa, which pays a 25% government-funded bonus worth up to £1,000 a year, if you save the maximum £4,000 (which he does).

Damen’s aim isn’t to stop working, but to achieve freedom. “So if I don’t like my boss, I could take on a less stressful job, or something less commercial. If you’re financially independent, you can do whatever you want.”

He still wants children, even if they are costly. He says: “You might have to work a few more years, or save a bit less, but it can be done.”


FIRE movement

Movement whose goal is financial independence and retiring early

The FIRE (Financial Independence, Retire Early) movement is a lifestyle movement with the goal of gaining financial independence and retiring early. The model became particularly popular among millennials in the 2010s, gaining traction through online communities via information shared in blogs, podcasts, and online discussion forums.[1][2][3][4][5]

Those seeking to attain FIRE intentionally maximize their savings rate by finding ways to increase income and/or decrease expenses, along with aggressive investments that again increases their wealth and/or income. The objective is to accumulate assets until the resulting passive income provides enough money for living expenses throughout one's retirement years. Many proponents of the FIRE movement suggest the 4% rule as a rough withdrawal guideline, thus setting a goal of at least 25 times one's estimated annual living expenses. Upon reaching financial independence, paid work becomes optional, allowing for retirement from traditional work decades earlier than the standard retirement age.


FIRE is achieved through aggressive saving, far more than the standard 10–15% typically recommended by financial planners.[6] Assuming expenses are equal to income minus savings, and neglecting investment returns, observe that:

  • At a savings rate of 10%, it takes (1-0.1)/0.1 = 9 years of work to save for 1 year of living expenses.
  • At a savings rate of 25%, it takes (1-0.25)/0.25 = 3 years of work to save for 1 year of living expenses.
  • At a savings rate of 50%, it takes (1-0.5)/0.5 = 1 year of work to save for 1 year of living expenses.
  • At a savings rate of 75%, it takes (1-0.75)/0.75 = 1/3 year = 4 months of work to save for 1 year of living expenses.

From this example, it can be concluded that the time to retirement decreases significantly as savings rate is increased. For this reason, those pursuing FIRE attempt to save 50% or more of their income.[7] At a 75% savings rate, it would take less than 10 years of work to accumulate 25 times the average annual living expenses suggested by 'the 4% safe withdrawal' rule.

There are also two sides to the spectrum of FIRE. Lean FIRE refers to the ability to retire early on a smaller accumulation of retirement income and limited living expenses which will require a frugal lifestyle during retirement. On the other end of this is Fat FIRE, which refers to the ability to retire early due to a large amount of accumulated wealth and passive income with no concerns about living expenses during retirement. A hybrid of these two is known as Barista FIRE, which refers to a semi-retired lifestyle of working part-time for some supplemental income, or retiring fully but with a partner who continues to work.

FIRE is viewed as a lifestyle, not simply an investment strategy. A common thread that challenges individuals that subscribe to the FIRE lifestyle is finding partners that share the same fiscal goals. Availability of online resources helps the movement to expand among Millennialhigh-net-worth individuals.[8][9][10]


The main ideas behind the FIRE movement originate from the 1992 best-selling book Your Money or Your Life written by Vicki Robin and Joe Dominguez,[11][12] as well as the 2010 book Early Retirement Extreme by Jacob Lund Fisker.[13] These works provide the basic template of combining a lifestyle of simple living with income from investments to achieve financial independence. In particular, the latter book describes the relationship between savings rate and time to retirement, which allows individuals to quickly project their retirement date given an assumed level of income and expenses.

The Mr. Money Mustache blog, which started in 2011, is an influential voice that generated interest in the idea of achieving early retirement through frugality and helped popularize the FIRE movement.[14][15] Other books, blogs, and podcasts continue to refine and promote the FIRE concept.[16][17][18] A Notable contributor to this movement includes Financial Freedom author Grant Sabatier, who works closely with Vicki Robin and popularized the idea of side hustling as a path to accelerate financial independence.[19][20][21] In 2018, the FIRE movement received significant coverage by traditional mainstream media outlets.[7][11][12][14] According to a survey conducted by the Harris Poll later that year, 11% of wealthier Americans aged 45 and older have heard of the FIRE movement by name while another 26% are aware of the concept.[22]

2020 saw the introduction of dating sites and blogs dedicated to bringing partners that share the FIRE lifestyle together.[23]


Some critics allege that the FIRE movement "is only for the rich",[24] pointing to the difficulties of achieving the high savings rates needed for FIRE on a low income.[14] Another common criticism is that the FIRE movement is composed only of white "tech bros", a notion that highlights the fact that men are overrepresented in media coverage of the FIRE movement.[25] A New York Times story focused on the women and women of color in the FIRE movement. It highlighted Kiersten Saunders and called Tanja Hester, author of the book Work Optional, "the matriarch of the FIRE women."[26] Paula Pant, host of the Afford Anything podcast, and Jamila Souffrant, host of the Journey to Launch podcast, are also prominent women of color in the FIRE movement.[27][28] Finally, some argue that early retirees are not saving enough for early retirement and the many unknowns that come with a longer time period. Because the retirement phase of FIRE could potentially last 70 years, critics say that it is inappropriate to apply the 4% rule, which was developed for a traditional retirement timeframe of 30 years.[7] For that reason, Hester and economist Karsten Jeske argue for a safer withdrawal rate of 3.5% or less, which means saving 30-40 times one's annual spending instead of 25 times if the goal is to retire completely and never earn money again.[29]

See also[edit]


  1. ^Brenoff, Ann (2018-04-24). "7 Things You Can Learn From The FIRE Movement". Huffington Post. Retrieved 2018-07-07.
  2. ^Wong, Kristin. "The Basics of FIRE (Financial Independence and Early Retirement)". Two Cents. Retrieved 2018-07-07.
  3. ^"Young People Say Screw It, Retire in Their 30s". Free. 2018-06-05. Retrieved 2018-07-07.
  4. ^Avenue, Next. "What 30-Year-Old Retirees Can Teach The Rest Of Us". Forbes. Retrieved 2018-10-22.
  5. ^"A Growing Cult of Millennials Is Obsessed With Early Retirement. This 72-Year-Old Is Their Unlikely Inspiration". Time. Archived from the original on April 17, 2018. Retrieved 2018-10-22.
  6. ^"When should I start saving for retirement?". Money. Retrieved 2018-12-18.
  7. ^ abcStokel-Walker, Chris. "FIRE: The movement to live frugally and retire decades early". Retrieved 2018-12-18.
  8. ^"Financial Samurai". Financial Samurai. Retrieved 2020-10-21.
  9. ^"Road To FIRE". Road To FIRE. Retrieved 2020-10-21.
  10. ^"Buck by Buck". Buck by Buck. Retrieved 2020-10-21.
  11. ^ abTergesen, Anne; Dagher, Veronica (2018-11-03). "The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing". Wall Street Journal. ISSN 0099-9660. Retrieved 2019-01-28.
  12. ^ abKurutz, Steven (2018-09-01). "How to Retire in Your 30s With $1 Million in the Bank". The New York Times. ISSN 0362-4331. Retrieved 2019-01-28.
  13. ^Bejder, Eva (2018-12-15). Stå af hamsterhjulet - med penge nok til resten af livet [Get off the hamster wheel - with enough money for the rest of your life] (Television production) (in Danish). Denmark: DR2. Event occurs at 6:16. Retrieved 2019-01-29.
  14. ^ abcMoss, Stephen (2018-11-20). "Can anyone retire in their 30s? Meet the people who say yes". The Guardian. ISSN 0261-3077. Retrieved 2018-12-18.
  15. ^Pennington, Sylvia (2018-02-23). "FIRE followers Down Under seek early retirement". The Sydney Morning Herald. Retrieved 2019-01-29.
  16. ^"Mad Fientist - Financial Independence and Early Retirement". Mad Fientist. Retrieved 2021-09-23.
  17. ^"Ask the Savings Guy". Ask The Savings Guy. Retrieved 2021-09-23.
  18. ^"Podcast". Afford Anything. 2018-11-03. Retrieved 2021-09-23.
  19. ^León, Concepción de (2018-02-08). "How One Book Changed My Relationship With Money". The New York Times. ISSN 0362-4331. Retrieved 2019-10-01.
  20. ^Marte, Jonnelle. "How this millennial saved $1 million by age 30". Washington Post. Retrieved 2019-10-01.
  21. ^"I'm a Millennial Millionaire. Here's How I Got So Rich". Money. Retrieved 2019-10-01.
  22. ^The Harris Poll (2018-11-27). The FIRE Movement Survey(PDF). TD Ameritrade. Retrieved 2019-01-29.
  23. ^Charles, Mathews (2020-10-09). "Dating FIRE". Retrieved 2020-10-09.
  24. ^Howard, Miles. "Being frugal is for the rich". The Outline. Retrieved 2018-12-18.
  25. ^"The False Persistent Myth About FIRE and Tech Bros". Our Next Life. Retrieved 2021-02-16.
  26. ^Cowles, Charlotte. "For these women, a FIRE that burns too male and too white". The New York Times. Retrieved 2021-02-16.
  27. ^Singletary, Michelle. "Do you need $5 million to retire early? Suze Orman says so. But 'FIRE' devotees say no". The Washington Post. Retrieved 2021-02-16.
  28. ^George, Dana. "5 Black Financial Gurus to Follow". Motley Fool. Retrieved 2021-02-16.
  29. ^"Safe Withdrawal Series". Early Retirement Now. Retrieved 2021-02-16.

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  1. Can Morocco be a good alternative? Living 8 miles away from the EU and the UK ?

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