Camp FIRE Finance
The FIRE Movement is a lifestyle choice with the end goal of financial independence and an optional early retirement. FIRE, an acronym standing for Financially Independent Retired Early, is based on two financial rules of thumb: The Rule of 25 and The 4% Rule.
Often called FI (rhymes with hi), Financial Independence is achieved with your living expenses can be met by income generated from your investments. Basically, one if financially free when working for a paycheck is optional.
Not everyone should pursue an early retirement, but everyone should pursue financial independence. Many in the FIRE movement have no intention of giving up work once they are FI.
Building long term wealth is the cornerstone of the FIRE movement, but it takes more than cutting back how much you spend on groceries to get there. While watching your budget and keeping your expenses down help, you need lasting wealth if you hope to achieve financial independence.
So, what’s the secret to lasting wealth? Unfortunately, if you’re searching for the mystic yellow brick road leading to success, you’ll be disappointed.
Is FIRE worth the effort? Sometimes I wonder if chasing after FIRE (Financial Independence, Retire Early) is really what I want and whether it’s a movement I should enthusiastically encourage. I ask myself if maybe I’ve just been sucked into the hype, running after something I don’t really understand or appreciate?
Don’t get me wrong – it would be great to have the freedom to decide how I live my life and how I choose to spend my time and money. But is it worth the effort to chase after FIRE if I don’t have plans to retire early? More importantly, is it worth pursuing if I’ve joined the FIRE movement too late to retire early?
As a 30-something year old, I understand that time may still be on my side. I’m no spring chicken, but I’m also not staring retirement in the face. I’m in that awkward in-between phase. And this possibly makes me one of the lucky ones.
But what about my family, friends and colleagues who don’t have the same luxury? Should they be discouraged from chasing after FIRE, simply because the movement was birthed too late for them?
A Mini FIRE break could be just the thing you need on your journey to financial independence and early retirement.
When we talk about FIRE, it can be easy to focus almost exclusively on the portfolio size needed to reach your FIRE number. But when you have years left before you reach the barebones “Lean FIRE,” you may need some periodic motivation to keep saving for early retirement.
“Mini FIRE” is one way to find that breath of fresh air you need. This is a time to pause on your journey to enjoy life, like a sabbatical. Early retirement is still your end goal. But if you’re on the edge of burnout or dealing with major life events, FIRE may be the last thing on your mind.
Taking the time to enjoy the fruits of your labor (so far) can mean you stay the course.
These outdated financial rules were created by previous generations, but no longer hold true in today’s world.If you’re interested in achieving financial independence and early retirement then you need to consider breaking these 5 outdated financial rules.
You may have heard that FIRE is only for the wealthy. Unfortunately that narrative seems to be gaining a bit of steam and that’s too bad, because it’s a load of crap.
Sure the wealthy will be able to achieve financial Independence faster than everyone else, but the speed at which someone else achieves their financial goals has zero impact on what you’re trying to accomplish.
FIRE might be easier to reach for the well-to-do, but it offers something for everyone, regardless of their income, and anyone that says otherwise doesn’t fully understand The FIRE Movement.