How the FIRE strategy could allow you to retire earlier
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When it comes to making or saving money, we generally all have a goal we are working towards. These are often clear and carefully planned, like saving for a new home or paying off your car loan.
Other times they are a little more vague; like aiming to reach a certain level of savings somewhere we feel safe, or putting money aside for a holiday even if you haven’t decided where you’re going or how much it will cost you.
An extreme savings strategy may allow you to retire earlier than expected.Credit: Michael Howard
Regardless, there are very few of us who sit at the lower end of the spectrum and never think about how we spend or save our money. Likewise, there aren’t many of us at the opposite extreme, where every dollar is saved and every decision is determinedly planned in pursuit of a single goal. But if so to do If that sounds like something you might be interested in, you better act like a caveman because it’s time to discover FIRE.
What’s the problem?
Advocating Financial Independence, Retire Early, FIRE is not a new movement, it first emerged in the 90s. However, it came to prominence around 2010, thanks to many online money bloggers who popularized it, and has since gained a number of devout followers around the world, mostly millennials.
At its core, FIRE focuses on extreme savings (up to 50-75 percent of your income); These savings are then invested in order to get a return on your investments and retire early; There is a nice retirement age of 40 that is often mentioned by many FIRE fans.
What can you do about this?
So what is the purpose of this movement? And is it realistic at all?
