Have you ever thought about early retirement? Does the goal of financial freedom appeal to you? If so, then you’ve likely heard of the FIRE (financial independence, retire early) movement.
Early Retirement Goals:
One of the goals of the FIRE movement is early “retirement.” The word retirement is in quotes because it takes on a different definition for the FIRE movement which we will get into later. While many workers retire in their 50’s, 60’s, and 70’s. The FIRE movement focuses on saving and paying down debt to allow for retirement much earlier. Typically, the goal is to retire in your 30’s or 40’s. There are some cases where people have even retired in their 20’s!
If you’re reading this, you’ve likely dreamed of the idea of financial independence. You are not alone. The FIRE movement takes the dream of financial independence and makes it into reality. The idea of financial independence is to have X times more saved than your yearly income. This amount is different depending upon your perspective lifestyle so it may be easier for some than others.
Is it possible to save enough to “retire” at such a young age? The answer is yes and no. The idea of retirement in the FIRE community is different than the traditional concept we’ve all come to know. In the FIRE community, retirement means that you have the financial freedom to do what you’d like to do. For many, this means traveling and sightseeing without dealing with a stressful job and a lack of vacation days. It also means that many people take on a side hustle. Sometimes this often includes blogging about your FIRE lifestyle.
Opposition to the FIRE Movement:
Suze Orman, among others, has been vocal about her opposition to the movement. She was recently interviewed by Paula Pant at Afford Anything and had some strong opinions on her distaste for FIRE.
Click the link to see Suze’s interview.
So why does she hate the idea of the FIRE movement? Let’s look at a simple example. If person A retires at 65 with $2 million dollars and person B retires at 35 with $300,000 and no debt, who is better off? In terms of retirement, person B is much better off. Why is this the case? If person A lives until they are 85 they will be able to live off of $100,000/year. If person B lives until they are 85 they will be able to live off $6000/year. Obviously, this example does not factor in things such as social security, interest from investments, or the side hustle mentioned earlier. However, by using this simple example you can see the bigger picture. While the FIRE movement may work for some it likely isn’t for everyone.
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