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Freedom, Fireworks, and Fueling the FIRE (Financial Independence, Retire Early) Movement

By Sarah Carlson, CFP®, CLU®, ChFC®

Freedom, Fireworks, and Fueling the FIRE (Financial Independence, Retire Early) Movement

Freedom is not won by sitting idly and hoping for a miracle. Financial freedom requires vision, courage, and sacrifice for a higher goal. The Financial Independence, Retire Early (FIRE) movement is a part of that vision.

What Is the FIRE Movement?

The FIRE movement, inspired by the 1992 book "Your Money or Your Life," includes people who want to be financially independent at a young age. They may be able to quit work decades early. The earliest members of this movement saved and invested 70% of their income.1 However, the percentage of savings now varies between individual members.2 The main idea is to save enough to live off small withdrawals from your portfolio long before the regular retirement age of 65.

How Much Is Enough?

Your FIRE number is what you need to have invested to retire and live off the returns.3  A general rule of thumb is that you might retire when your investments equal about 30 times your annual expenses; however, this varies significantly depending on your situation.

Your FIRE Number Goal

Saving a large percentage of your income helps move toward the goal of your FIRE number, but so might be shrewd investing. The more you save and the better your returns on your investment, the sooner you can retire.

Fueling the FIRE Without Extreme Savings

Extreme savings and minimalist living may move you toward your goal faster. However, even those who do not want to adopt a stringent lifestyle have ways to fuel their FIRE. 

FIRE acolytes embrace one of three primary approaches.4 


Individuals or families adopting the Fat FIRE approach live a primarily traditional lifestyle and aim to save substantially more without drastically reducing their current standard of living. Fat FIRE usually requires a high income and aggressive saving and investment strategies to work.4


Lean FIRE adoptees live a minimalist existence both before and after retirement. Some have a lifestyle that only needs $25,000 a year or less.

Barista FIRE

Barista FIRE adoptees exist between the two choices. They save and invest enough to retire from their day jobs but use gigs or part-time work to increase their income during retirement.

Lessons From the Flames

FIRE is not for everyone, but everyone may learn from the movement. The principle of consuming less and living better offers benefits. You may gain considerable freedom by determining values and priorities as a family, disciplining yourself to spend only on those items that align with those values, and investing the rest. 

Even if you cannot retire fully by age 40, you may still retire early and have a fuller life than someone who spends all their income on accumulating possessions that may fail to give them joy.


1Financial Independence, Retire Early, Investopedia, https://www.investopedia.com/terms/f/financial-independence-retire-early-fire.asp

2The FIRE Movement is Alive and Well, Kiplinger, https://www.kiplinger.com/retirement/604262/the-fire-movement-is-alive-and-well

3How To Calculate Your FIRE Number, Time,  https://time.com/nextadvisor/financial-independence/how-to-find-your-fire-number/

4FIRE: Financial Independence, Retire Early, Forbes, https://www.forbes.com/advisor/retirement/the-forbes-guide-to-fire/

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Important Disclosures
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by WriterAccess.
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