The FIRE movement: the best way to retire early?

The FIRE movement: the best way to retire early?

What is the point of making and having money? A lot of people answer this question differently. It often revolves around buying things or saving to buy things. However, in my opinion, the real point of making and having money is to give you freedom. Freedom to do what you want, when you want, with whom you want. This is an extremely powerful thought and is one of the main drivers of the FIRE movement.

So what is the FIRE movement?

FIRE stands for Financial Independence, Retire Early. The movement started with a best-selling book in 1992: Your money or your life by Vicki Robin and Joe Dominguez. This book shows the importance of understanding that the price tag on an expense should be compared with the amount of time spent at work to pay for the expense. It then will become extremely clear how much time you “sacrifice” for the purchase.

The FIRE movement is dedicated to extreme investing and saving to be able to retire way before the “conventional retirement age”. You can do so by saving and investing a big percentage of your income. With this, the movement oftentimes names different percentages of income dedicated to investing and saving, but they generally range between 50-75%. Once retired living expenses will be covered by making small withdrawals from savings or investment accounts. 

How do they do it?

Saving or investing a large portion of your income can be quite difficult, so how do the “FIRE people” do it? Well, they start by keeping their expenses extremely low. Keeping your spending low will not only allow you to save more money, you will also need to save less money. The better you are at controlling your spending the easier it is to calculate how much money you need to invest and save to be able to stop working. Mr. Money Mustache has made a great blog post about how to do the math for early retirement. 

Besides saving, the FIRE movement also focuses on raising income. This could be through getting a pay raise, switching jobs, or working on creating different income sources. Whilst a pay raise or switching jobs is quite conventional creating different sources of income is not (yet). A different income source can be created by starting a second job, starting your own company, or any other thing that will generate income besides the income of your current job. With these different sources of income, ideally, you would create sources of passive income. This could mean that it takes some time to set-up but afterward will generate money even when you aren’t working. 

My thoughts about FIRE

There are quite some things about the FIRE movement that sound very interesting and exciting to me. The biggest benefit of it, in my opinion, is that it tries to lift the taboo of talking about finances whilst also providing (some) financial education. There are also a few things that take it a little too far in my opinion. I also think there is no one-size-fits-all solution to finances or financial independence. If you are learning about finances and saving more than before, but are not yet at the 50, 60, or 70% of your income that’s fine, as long as you keep developing and learning. Don’t be discouraged and just try to become better step-by-step. Since my opinion differs depending on the topic of FIRE I have put some pointers below.


FIRE heavily reinforces prioritizing saving and investing. According to the Atlantic, many Americans would have trouble coming up with $400 in case of an emergency. So it is safe to say that saving and investing can be difficult. Therefore, I highly applaud any movement for bringing more attention to the importance of saving and educating people on how to do so.

Start thinking about retirement early on. When starting investing at a younger age you will have the benefits of compound interest working in your favor. Being mindful about spending early on also sets you up with a great financial mindset to avoid things like lifestyle inflation. 

FIRE or financial independence does not mean quitting work and doing nothing anymore. It simply provides you with the freedom of choosing what you would like to do. If you love your job and want to keep working, great! However, if you would like to quit and start working on a hobby or do charity work you will be able to do so. The great thing about this freedom is that you can decide what you are going to spend time on, whether it generates income or not.

FIRE is based on the ability to retire early. However, to be able to accomplish this you should have a decent paying job. According to Merrill, the average amount needed in investments to be able to retire is around $1 million. Therefore, for people in the lower-income bracket, FIRE can be very discouraging. This is a shame because this also means that some of the great and applicable pointers, saving, for instance, might be passed at the idea of FIRE. It is absolutely possible to become financially independent on a lower salary, you just have to be patient and get the math right.

One thing that is often said about the FIRE movement is that people deprive themselves since they are spending so little. In the consumer society, we live in this is not the weirdest comment. However, it is not true. Oftentimes people buy something thinking it will make them happy but once they bought it the happiness is soon gone. It is so important to consider what truly makes you happy and where you are just “keeping up with the Joneses”. Consider what makes you happy and cut back on spending on things that aren’t on this list. For me, it is the fun experiences in life that make me the happiest. 

Inspirational resources:


Mr. Money Mustache
Financial Samurai
Rich & Regular
One frugal girl

Interesting documentaries:

Playing With Fire
Minimalism: a Documentary About the Important Things

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