FIRE movement (Finanical Independent Retire Early)

What is FIRE?

FIRE stands for Financial Independence, Retire Early. The basic principle is maintaining a high savings rate, typically around 50%, although some people save up to 70% of their income. Their objective is to retire much earlier than the traditional age—often at 30, 35, or 40.

FIRE as a Lifestyle Choice

From my perspective, FIRE is a lifestyle choice. It involves spending as little as possible, investing the surplus, and allowing compounding to do the rest. Like all great strategies, it is simple in concept but difficult to execute. It requires careful planning and discipline.

When I first heard about FIRE, I felt discouraged (depressed). I saw people retiring at 30 while I was a broke university student with years of study left. However, as I continued consuming FIRE-related content, my mindset shifted. Instead of focusing solely on "Retire Early," I started embracing the Financial Independence aspect.

Start with Your Savings Rate

Achieving financial independence begins with having 3, 6, and eventually 12 months' worth of expenses saved up. This provides financial security and FREEDOM, allowing for better decision-making.

I would start asking myself key questions about money:

Is this purchase necessary? Is there a cheaper alternative,while maintaining the same quality?
Am I moving towards financial independence or away from it?

That being said, don't stress over small expenses like a $2 or $5 decision. It won’t make a huge difference in the long run. However, be mindful of recurring expenses—don’t buy a coffee every day, but enjoy one occasionally with colleagues or friends. (Of course, while traveling, $5 might be more significant if you're in a country like Thailand or Mexico.)

Instead, focus on big expenses like:

Taxes
Mortgage repayments
Rent
Car purchases
Travel

Your goal is to optimize these major costs to accelerate your financial independence.

Types of FIRE

Now, let’s talk about the "Retire Early" aspect. Don’t stress too much about it—just keep it in the back of your mind. The different types of FIRE include:

Lean FIRE – Living a minimalist lifestyle to require a lower retirement savings goal.
Fat FIRE – Saving enough to maintain a higher standard of living in retirement.
Barista FIRE – Achieving partial financial independence while working part-time for extra income and benefits.
Coast FIRE – Saving enough early so that investments grow on their own without needing further contributions.

The key question is: How do you want to structure your lifestyle after retirement? How much money do you need to sustain it?

The Best FIRE Approach (In My Perspective)

Personally, I believe Barista FIRE is a great option. You could have an investment portfolio generating passive income and a fully paid-off house. The money earned from part-time work is for your daily expenses, while your passive income is reinvested to grow your portfolio further.

This approach moves you closer to Coast FIRE while still allowing you to enjoy the benefits of financial independence.

Why is Barista FIRE appealing?

You can say goodbye to jobs you hate or those with long commutes.
You still get to do meaningful work that provides income, satisfaction, and purpose.
It offers social and mental benefits—keeping your mind and body engaged while maintaining relationships.

Your job could be something enjoyable, such as:

Teaching part-time
Running an online business
Becoming a yoga instructor

How Much Do You Need?

To determine this, track your expenses. This will give you insight into your current spending and whether it’s sustainable. Also, consider future expenses, such as having children.

Tracking expenses indefinitely is useful, but at a minimum, aim to track for 12 months. This will account for irregular transactions like taxes and car registration.

Coast FIRE vs. Lean FIRE

The main difference is the amount of passive income you have.

For high-income earners, Coast FIRE is easier to acheive since they can save at a higher percentage.
Lean FIRE is easier to achieve but requires accepting a lower standard of living. It doesn’t mean living on the streets, but it might mean rarely eating out or cutting back on luxuries.

Consider your current lifestyle—do you want to maintain or improve it? Are you willing to sacrifice certain things to achieve financial independence sooner?

Investing for FIRE

The most common way to build wealth in the FIRE community is through investing in index funds and ETFs using dollar-cost averaging. This approach provides diversification and long-term growth.

Another popular method is property investment, where people buy rental properties and increase their value through renovations. Rentvesting—where you rent in one location but own an investment property elsewhere—is another strategy.

Regardless of the path you choose, FIRE requires a long-term investment mindset. Unless you're flipping houses or a professional trader, patience is key. You will need to let compounding do it's thing and do not interrupt it.

Conclusion

Ultimately, focusing on Financial Independence (FI) is more important than fixating on the "Retire Early" aspect. If I had to pick one approach, Barista FIRE would be a great option for most people.

The key is deciding what kind of lifestyle you want and how much money you need to maintain it. You should also consider what you're willing to give up—like daily café coffees—to reach your goal faster.