FIRE - A Brief History of the Financial Independence Retire Early Movement

The Financial Independence Retire Early movement, or FIRE, gained momentum in the early 2000s as more and more people started to wake up to the realization that they don’t have to work until they are 65 and be miserable if they don’t want to. It all began with JL Collins’ seminal book The Simple Path to Wealth, which outlined a three-step plan for building passive income and retiring early.

What is Financial Independence?

Financial independence is when an individual has saved up enough money to live off their investments without having to work. This is typically achieved by saving a percentage of your income and then investing it. The goal should be to have at least 25 times your annual expenses in savings, which will provide you with a stable cash flow to retire early. Financial planning will differ depending on whether you have debt or not and how much you earn each year.

What is financial independence retire early (FIRE)?

Financial independence retire early or FIRE is a movement that has been around since at least 2001, when it was coined by Jacob Lund Fisker in his book Early Retirement Extreme. Financial independence is achieved when your passive income exceeds your expenses. Retirement can be achieved by age thirty-five if you have enough money to live on. Financial planning should include financial goals, investment strategies, insurance policies, debt management and taxes.

What Type of Investments Should I Have in My FIRE Fund?

There are many different types of investments you can have in your FIRE fund (a.k.a. Financial Independence Retire Early). The most common investments are stocks, bonds, and real estate; however, there are other investment options such as gold or cryptocurrency that could be worth exploring depending on your strategy.

I cover off Investments and Portfolios extensively here. In this section of the blog I will go deeper into the main aspects of FIRE and Financial independence