blog categories:

What is the FIRE movement?

Retirement isn't an age. It's a number. And there is no law that says a person has to wait until they are 65 to quit their day job and begin living a life that they love. Because, let's face it…most people don't like their jobs and would definitely rather be doing something else, right?

There is a new group of younger people in the workplace who no longer want to be bound by the chains of working their whole lives…they want to retire early. They are willing to do what it takes to be able to quit their jobs early…and be free to do what they please, when they please. They are a part of the F.I.R.E. movement.

So, what is the FIRE movement anyway?

F.I.R.E. stand for Financial Independence, Retire Early.

green clock sitting next to a pink piggy bank with coins on the table | what is the fire movement | positively jane

It began in 1992 when the best-selling book Your Money or Your LIfe by Vicki Robin and Joe Dominguez was published.

It's a movement of people who have decided that they do not have to wait until they are 65 to quit working. They have decided that they would rather have extreme savings and investments NOW, when they are younger. Which gives their money the opportunity to grow quickly.

This also gives them the ability to CHOOSE what to do next. Work a part time job, quit working all together, travel and work…the choice is theirs and they are no longer a slave to the paycheck. Imagine that!

The goal is to save and invest aggressively. Somewhere between 50–75% of your income so you can retire sometime in your 30s or 40s.

That’s right: You need to save at least half of your income.

The premise – you should evaluate every expense from the standpoint of how many working hours did it take to pay for it. Personally, I LOVE this.

How do they do it?

In order to save that much money for investing, people who are on F.I.R.E. are always looking to do two things: keep their expenses extremely low and find ways to raise their income.

The basic idea is that the higher your income and the lower your expenses, the faster you can reach financial independence.

There are so many great nuggets that can be gathered from the FIRE mindset.

Start dreaming and planning for retirement – Dream BIG. And plan for it. The earlier you begin to put money into investments the more money you will have when you are older. Go on and grab ‘How to be a Millionaire‘ for quick tips AND a financial breakdown by age.
Find ways to boost your income – Apply all of that extra towards your retirement goals. Get a part time job. Drive for DoorDash. Seasonal help. Even ask for a raise!
Keep your expenses low – Do not let your lifestyle increase with each pay raise. Stay the course and save instead. Get on a budget and stick to it.
Make saving and investing a priority – If you are lucky you will get old. And, older people need to live indoors and have food on the table too. Pay yourself at least 20% of your gross pay (before taxes and insurance). Invest that 20%! Compound interest is your friend.

Is the F.I.R.E. mindset for you?

One of the biggest barriers in adopting the FIRE plan is income. In order to save half you need to have a larger than average income. And of course, the higher your income the easier it is to live on half.

Don't let a lack of a higher income discourage you. You can still pay yourself first (20%) and invest. You can still make a plan and stick to the plan. You can still start early.

Now, this may not be you at all, and that's ok. On the other hand…maybe this is just what you need. Only you can determine that.