Personal Finance

What Is the FIRE Movement?

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Have you been hearing the term “FIRE” thrown around a lot lately in the personal finance world? That’s not surprising. It’s an exciting movement that’s changing the way people think about work, money, and retirement. Still, it may be a foreign concept to many, so let’s dig in for a full introduction.

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What Is the FIRE Movement?

FIRE stands for “Financial Independence, Retire Early.” The movement is often traced back to the 1992 book Your Money or Your Life by Vicki Robin and Joe Dominguez. By comparing expenses to the time it takes working a job to earn each purchase, the authors strive to change readers’ relationships with money and encourage them to work toward financial independence.

Over time, more books and blogs began to surface on the topic of achieving financial freedom. The Mr. Money Mustache blog, started in 2011 by Peter Adeney, is frequently credited with popularizing the movement of simple, frugal living to achieve early retirement.

The exact definition of FIRE and how to achieve it varies quite a bit based on which book, article, or personal finance authority you stumble across. However, the most commonly noted pillars of FIRE include:

  • Creating a significant gap between what you make and what you spend. This could mean increasing your income, decreasing your spending, or a combination of both.
  • Using that gap to save and invest at a higher-than-average rate.
  • Achieving financial independence at an earlier age than most—often in your 30s or 40s instead of in your 60s.
  • Mathematically, financial independence is usually defined as a net worth of 25 times your annual living expenses. For instance, someone who can comfortably live on $60K per year should strive to achieve a net worth of $1.5M.

Overall, the aim is to obtain financial freedom as soon as possible through sound personal finance principles. Most proponents of the movement will tell you that it’s not so much about retiring early as it is about freeing up time to spend as you wish, before hitting the traditional retirement age of 65. This could mean cutting down to part-time work, leaving a 9-to-5 job to start a business, or stepping away to raise your children. In fact, there are many suggested alternatives to the “RE” in FIRE, including:

  • Financial Independence, Retire Eventually: For those who could retire, but love their careers
  • Financial Independence, Recreational Employment: For those who’d rather keep a low-stress, part-time job that they enjoy
  • Financial Independence, Retire Entrepreneur: For those who would rather build a business or be self-employed

It’s often said that personal finance is personal, and FIRE is no different. The net worth number that equates to financial independence is different for every lifestyle. And the paths people choose to take after achieving financial independence vary as widely as the definitions of FIRE.

Common Misconceptions About the FIRE Movement

Naysayers offer many criticisms of the FIRE movement. Certainly, there are pitfalls to watch out for on the path to early financial independence, but many of the criticisms are rooted in misunderstanding. So, let's look at some common misconceptions about the FIRE movement.

1. You have to sacrifice all fun and enjoyment for years.

Especially frugal FIRE advocates do take extreme measures to save well over 50 percent of their income. Giving up your car, never eating out, and scrutinizing every single dollar spent may not sound like a ton of fun. However, you don’t have to end all discretionary spending to pursue FIRE. You just have to be more intentional about your spending than most.

Consider what you spend on enjoyment versus what you spend out of convenience or bad habit, and focus on cutting the bad habits. Some people decide they are totally fine with never eating out, while others will continue to eat out and find other areas in life where they can save. It’s not that you can’t spend money on some fun things; it’s just that you probably can’t do every fun thing. You have to make choices.

Furthermore, the math for achieving financial independence varies quite a bit depending on your timeline. Yes, larger spending cuts will accelerate financial independence. But there are plenty of people who choose to take a more relaxed approach. Whether you’re able to retire at 28 or 48, you’re still retiring early! The bottom line is that FIRE is about focusing on what truly makes you happy. This isn’t just the outcome of financial independence, it’s a tactic for effectively prioritizing how you spend your time and money during the journey.

Related: How Two 30-Something Twins Achieved FIRE in 5 Years on Rental Income

2. You have to be a high-income earner.

It’s true that seeking financial independence will require a higher-than-average savings rate. However, with Americans saving an average of just 6 to 8 percent of their income over the past decade, the bar isn’t set very high. [1] Theoretically, high-income earners have more room to save at higher rates—but this doesn’t mean that they are actually creating the gap in income versus spending that leads to early financial freedom. It’s not uncommon for high earners to be derailed by the comfort of their large paychecks and the lifestyle creep that can come with the social pressure of watching colleagues buy giant homes and drive fancy cars.

There are plenty of stories about average-income earners achieving financial independence! But more importantly, there are plenty of opportunities to increase income. Even very low-income earners can work their way up in their jobs, switch careers, or find side hustles to help boost their ability to save. And you don’t have to reach a six-figure income to achieve FIRE. You just have to focus on creating a comfortable gap between your income and expenses.

3. FIRE is for lazy people who want to quit working completely.

I'm going to repeat myself: FIRE is about focusing on what truly makes you happy. As you dig into the stories of those who have "retired" early, you'll find that most haven't retired at all. They've simply found the freedom to do what they want, instead of what they feel they have to do to make ends meet. Some just keep working because they enjoy their careers. Others make the leap to a less lucrative but more fulfilling career. Many follow more entrepreneurial routes—say blogging, real estate investing, or other business ventures. The word "retire" is the most confusing word associated with the FIRE movement. Achieving early financial independence is less about retiring and more about refocusing.

Close up of unstable stack of coins on world map.

4. An economic crash or extreme personal emergency could ruin an early retiree.

Cue the dramatic music and brace yourself, because naysayers love to point out all the things that could go wrong in life. The economy could crash, a loved one could fall ill, we could enter a zombie apocalypse. There are countless "what if" scenarios to scare you out of pursuing early financial independence. But first of all, these "what if" scenarios don't just magically appear because you left your 9-to-5 job earlier than your peers. Life's uncertainties apply to everyone. Who do you think is better equipped to ride out an economic downturn or a serious illness: a 50-something employee who has saved the bare minimum and relies heavily on that regular paycheck or a 30-something early retiree who already has $1 million-plus in net worth?

Second, achieving early financial independence doesn’t mean you can’t ever go back to work. Many financial independence thought leaders, such as Paula Pant of Afford Anything, suggest retiring early and often. Leave the workforce while your kids are young, and then jump back in when they’re busy high schoolers. Quit your job to start a business, and then feel free to find another job if the business fails. If the market tanks and your investments aren’t covering your expenses quite as comfortably, pick up some easy part-time work. None of these scenarios are examples of ruin or failure. At the end of the day, you still got to step away from the traditional path and do things on your own terms!

Finally, turn off “The Walking Dead” and stop worrying about a zombie apocalypse! Or maybe more appropriately, turn off the news and stop worrying about every freak accident that has happened eight times, ever. As my grandmother always said, “Worrying is like a rocking chair. It gives you something to do, but it gets you nowhere.”

Related: The 30-Something’s Guide to Financial Freedom

Is FIRE Right for You?

I don’t know you. I don’t know your life. But I don’t need to know you to tell you that FIRE is right for you. I know it’s a bold statement, but hear me out.

I say this because the core concepts of pursuing financial independence can improve anyone’s life. You don’t have to save 75 percent of your income. You don’t have to leave the workforce early to play golf every day. But you should be saving more than the 6 to 8 percent average. You should be intentional about how you spend, instead of buying things because everyone around you has those things. You should think about what makes you happy, and plan to do more of that each day and week and year of your life.

Our most precious and finite resource is time. Tomorrow isn’t guaranteed. If you spend your whole life trading your time to cover expenses that don’t truly make you happy, you’re doing it wrong. Instead, focus on building a life that you can enjoy each day. Spend your money intentionally, so you can spend your time as you wish.

Ready to Learn More?

As I’ve alluded to you throughout this article, there are a ton of great resources for learning more about achieving financial independence. Here are a handful to get you started:

  • The BiggerPockets Money Podcast: Hosted by Scott Trench and Mindy Jensen, this podcast offers a wide variety of personal finance stories, spanning the spectrum of the FIRE movement. You’ll hear financial independence stories from people who worked their way out of extreme financial hardship, from high-income earners to low-income earners, from young retirees to people who started late, from couples with kids to aspiring entrepreneurs, etc.
  • Other podcasts and blogs: There seems to be a FIRE-related podcast or blog to fit pretty much any personality! A few to start with include Mr. Money Mustache, Afford Anything, ChooseFI, and Mad Fientist.
  • Playing With FIRE: This new documentary follows one family as they change their money mindset and begin their journey to financial independence.
  • Books: Some classics to look into include Your Money or Your Life (Vicki Robin and Joe Dominguez), The Millionaire Next Door (Thomas Stanley and William Danko), The Simple Path to Wealth (JL Collins), and Set for Life (Scott Trench).




You’re reading about financial independence, so I’m assuming you’re interested! If you have yet to start your journey, what’s holding you back? Do you have any questions for me? 

Let’s talk in the comment section below. 

Megan Greathouse is a real estate investor, mom, and wife located in St. Louis. Since jumping into real estate in 2017, her primary focus has been small multifamily rentals. She currently owns 10 u...
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    Wenda Kennedy JD from Nikiski, Alaska
    Replied about 1 year ago
    I did this plan -- before it was popular. When I was young, I worked and went to school. I was frugal and deliberate. The young women around me made fun of me and told me I should "get a life." I paid my bills and paid for my education while they had a good time on their money. I met up with some of the "party girls" when I was around 40. Almost all of them had lives in ruins. Then they told me how lucky I was to have a good career and be a good solid path. They acted as though it all just fell out of the sky and into my lap. What I didn't tell them was that I was still working my plan day by day. Today a bunch of those now elderly "party girl" types are among my tenants. They pay me their rents every month and I smile all the way to the bank. And, yes, they are still belly-aching about how rough life is for them...
    Kevin McGuire Rental Property Investor from Seattle, WA
    Replied about 1 year ago
    Wenda, good for you! Megan, great article, very well put together. Truthfully though, you had me at zombie apocalypse. What I particularly like about FIRE and which I think your article does a great job of pointing to, is around a larger goal of achieving personal freedom which allows one to focus on a life of purpose. It's kind of like a support group for resisting the pressure of consumerism and the empty values it brings with it. Just like how thoughtful eating is important for physical health, thoughtful consumption is important for emotional health; that brand new car might end up being empty calories which leaves you hungry again in no time!
    Obi Alu
    Replied about 1 year ago
    Kevin, you make some really compelling points with great analogies--thanks for sharing!
    Kulin Dakwala from Piscataway, New Jersey
    Replied about 1 year ago
    Great article
    Raul Villanueva Investor from San Juan, Puerto Rico
    Replied about 1 year ago
    Great read Megan! Thank You... So accurate and true to anyone anywhere. I am so happy and grateful to attest that after grinding through the modern day slave life in the mainland US during my 20s and 30s, I am now a 48 year old FIRE(E) enjoying The Puerto Rico Life....🤙🏼😎🏝🇵🇷
    Megan Greathouse Rental Property Investor from Saint Louis, MO
    Replied about 1 year ago
    Love it, Wenda! "...thoughtful consumption is important for emotional health." What a great quote, Kevin! Congrats, Raul! Sounds amazing!
    Nathan G. Real Estate Broker from Cody, WY
    Replied about 1 year ago
    Nice summary, Megan. Too many see retirement as an opportunity to sit around and do nothing. I feel it is far healthier to remain active and productive in the workforce. Financial independence should be a method of gaining freedom to be active and productive in pursuits that bring joy while serving others.
    Megan Greathouse Rental Property Investor from Saint Louis, MO
    Replied about 1 year ago
    I completely agree! I love the quote about having three hobbies... one to keep you creative, one to keep you healthy/fit, and one to make you money. No reason you can't find hobbies to achieve all these things and stay active and engaged throughout life! Financial Independence just gives you that much more flexibility to focus on these hobbies!
    Jill L Ripley Flipper/Rehabber from Massachusetts
    Replied about 1 year ago
    Loved this article. Megan, your story inspires me. I am 51 years old and looking to jump off the hampster wheel. Real estate investing is something that really interests me and seeing that you started through BiggerPockets is an inspiration.
    Megan Greathouse Rental Property Investor from Saint Louis, MO
    Replied about 1 year ago
    Congrats! You've found an excellent resource to help get you started! Do your homework and take action. It's definitely worth it!!
    Sharon Rosendahl Investor from Stanwood, Washington
    Replied about 1 year ago
    Great overview Megan. Besides all the great resources you already mentioned, check out Optimal Living Daily podcasts. They have several different podcasts pertaining to minimalism, life balance, health, business, money, relationships etc. They read, with permission, assorted blogs. Most of the podcasts run about 10 minutes so it is easy to find time to listen to them. A lot of things in life are about finding balance and finding your enough (read Your Money or Your Life to understand enough).
    Megan Greathouse Rental Property Investor from Saint Louis, MO
    Replied about 1 year ago
    Very interesting. I'll have to check it out. Thanks for sharing!
    Bryan Lee Rental Property Investor from Downey, CA
    Replied 11 months ago
    Megan, This is awesome! I absolutely love what FIRE stands for. I loved loved loved point #3 FIRE is for lazy people who want to quit working completely! I have been in medical sales my entire career and always a TOP producer. However, this point hits home because often times I don't work as hard as my colleagues do. I am looking into REI to take all that I have learned and build a legacy for my family and to spend even more quality time with my family. I look forward to doing what you have done with Multi-Families and thank you for taking the time to write this Blog. It was very inspiring! Please keep doing what you are doing...
    Megan Greathouse Rental Property Investor from Saint Louis, MO
    Replied 11 months ago
    Glad you enjoyed it, and that some of these points hit home for you. I'm living this journey in a very real way right now, and I'm happy to share what I've learned so far. Thanks for reading.