Thus, it should be no surprise that everyone's version of FIRE looks a little bit different. Investors from many different walks of life and levels of comfort are drawn to the FIRE movement.
THE SHOCKINGLY SIMPLE MATH BEHIND EARLY RETIREMENT FULL
Money Mustache's popular article The Shockingly Simple Math Behind Early Retirement, he even goes so far as to say that most people can retire from full time work within 10 years if they live simply and save aggressively. It is a complete reassessment of what is "enough," what to prioritize in life, and what individual happiness looks like.įIRE investors often put up with the rate race for no longer than they must. In this sense, financial independence can be thought of as more than just the freedom not to work. To save so much money, FIRE investors usually embrace a simpler lifestyle, and eschew trappings of wealth. Money Mustache advise saving at least 30-50% of one's income. In order to accomplish this, a core tenet of FIRE is aggressive saving. One who has achieved FIRE doesn't need to work again. They are passionate about minimalism, and prioritize their time above money and possessions, in the belief that time is the ultimate asset.įIRE investors aim to build enough wealth and passive income in order to retire early and achieve financial independence. FIRE followers are not afraid to go against the grain. What is True Financial Independence & Freedom?įIRE runs contrary to a world that very much still prioritizes consumerism, careerism, and materialism. Along the way, you'll see why real assets such as REITs ( VNQ) and MLPs ( AMLP) have played an important part in my investing journey and how they can be a strategic part of your FIRE portfolio. I'll then lay out five key steps for those who want to begin investing for the FIRE lifestyle. However, Dominguez and Robin's book is unique because it also details how early retirees can continue to find meaning and purpose in their lives after FIRE.īut before we get into all that, let's take a closer look at the foundational principles of FIRE.
Many investors will also be familiar with the 1996 book The Millionaire Next Door, which similarly advocates adopting a simpler life in order to grow one's wealth more quickly. This would equate to over half a million in ever-inflating 2021 dollars. The book explains how Dominguez was able to retire in his early 30s in 1969 with a rather modest sum of capital: a ~$70,000 portfolio. One of the most popular books to bring this lifestyle into the limelight is Joe Dominguez and Vicki Robin's book Your Money Or Your Life, published in 1992. Designer491/iStock via Getty Images What is FIRE?įIRE is an investing and lifestyle philosophy that stands for "Financial Independence Retire Early." Lately, the FIRE movement has become increasingly popular, even though its core principles have actually existed for a while.Įssentially, FIRE practitioners embrace a simple lifestyle and prioritize their time above their money in order to retire early in life.
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