FIRE(Financial Independence Retire Early) Movement

Who started this FIRE movement?

It all started in 1992 when a book named “Your Money or Your Life” written by Vicki Robin and Joe Dominguez was released and millennials caught unto it by 2010 and became popular through books, podcasts, online forums etc.

The authors of the book Joe Dominguez and Vicki Robin retired early by the age 30 and 20 and documented their journey of 50 years combined with the patterns in the market’s gain/loss and taught how much money you should save to achieve complete Financial Independence to leave your 9 to 5 job.

What is FIRE?


This movement is all about saving regressively and planning for retirement by the age of 30s or 40s. By retiring I don’t mean you should not to do anything and sit at home(you can if you want to!!) but achieve Financial Independence by that age so that you don’t NEED to depend on your 9-5 job to meet monthly expenses and loose time to your job. You can choose to Travel, work on your hobbies or make your passion as paycheck.

How to achieve FIRE and retire early?

To achieve Financial Independence early, you need to invest or save more than 50% of your income every month while you are earning to achieve the goal amount.

Steps to achieve this:

  • Track down your monthly expenses. Create an excel sheet or buy a fancy planner or use an app, but you should know where your money is going.

Income = Savings(50%+) + Fixed monthly expenses(Rent/Mortgage, Utilities, Groceries etc.)(30%) + Variable expenses(Travel, any hobbies etc.)(20%)

  • Build an emergency fund worth of at least 3 months. This fund will ensure that you don’t touch the invested amount for early retirement incase of emergency(after 2020 we know nothing is permanent).
  • Save 25 times your monthly expenses. I guess by now you must have heard it a Zillion times that you have to “SAVE before you spend” but FIRE concept is built on “saving more than half your income” and then spending whatever remained of it.

ex: if you currently spend $60,000/year, then you should save $60,000 * 25 = $1,500,000(1.5 Million) to retire early

  • Diversify your portfolio or invest in consistent and safe assets. Invest in safe mutual funds, Real estate(rental properties), Hedge funds(Gold, or precious commodities), savings accounts etc. Don’t put all your eggs in one basket and repent once you lost them. This will ensure your withdrawal rate does not exceed your returns after you quit working.

6% inflation rate + 4% withdrawal rate = 10% return per year(which will ensure that your principal amount is Untouched)

  • Start investing in your retirement account(Tax-advantaged): Invest in your 401K/PPF as much as you can. You can invest upto $19500 without paying tax. Take advantage of it. This will help you when you need the money most.
  • Try to grow your income through side hustle and spend less than you earn: Yes, this goes without saying. Your expenses should always be less than your income and if you want to retire early, you can plan for a side hustle or a second income like Proof reading, Content Writing or your own small business which will help you reach the target amount faster.
  • Thinking about FIRE because you don’t like the job is a big NO. It is very exhausting to work on a job you don’t like and that to if you sticking to it to achieve FIRE for 10 or 20 years of your prime age is a big mistake. If you are thinking about retiring early just because you don’t like the job, then try investing some amount in finding your passion, learn the necessary skills and move out of the current job. The exhaustion of getting stuck in a life/job you don’t want will cause for more depression.

Some of the big assumptions of FIRE?

  1. The concept by default assumes that you have a six figure salary or a very high salary where you can save more than 50% of your income. But you don’t have to have a six-figure salary to achieve this, even with a small income and right investment or a quick second income, you can reach your target amount.
  2. FIRE enthusiasts suggest investing rigorously(as much as 75% of your savings) into stock market. But if you are a beginner or afraid of taking risk, you can choose a great mutual fund that gives good returns(at least 10% every year).
  3. It assumes that you will have 4%(which is equal to your yearly expenses calculated now) withdrawal rate consistently every year which might not be the case(some emergency can quickly eat up your savings) which is why you need to maintain a separate emergency fund(keep 6 months of monthly expenses in a separate account).

Other variants of FIRE

There are also other variation of FIRE like Lean FIRE(where people restrict their lifestyle in order to stick to the budget), Barista FIRE(where people quit 9 to 5 job but still take some part time jobs to keep up with their life style) etc.

You can find more information from below resources from which I researched:

Please do let me know about your thoughts on FIRE in the comments.


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