Thinking of retiring early? FIRE away!
If you are a devotee of early retirement strategies, then no doubt you’re acquainted with the FIRE movement. FIRE stands for financial independence, retire early and is an emerging trend among those in their 30s and 40s. Rather than slog away in stressful, high pressure careers well into their 60s, many younger employees are checking out early once they have amassed a comfortable nest egg, then living frugally – extremely frugally in some cases – off annual investment earnings.
Given the number of bloggers on the topic, FIRE is a thing. But honestly, it’s not a new thing. If you’ve been around a while you may remember the book “Your Money or Your Life,” authored by Vicki Robin and Joe Dominguez back in the early 1990s, which promoted techniques for simple living and taught readers how to determine the number of wage-paying hours were needed to pay for stuff. Since the dawn of man (or at least since the dawn of the retirement industrial complex) people have been looking for a way to escape the grind of soul-crushing jobs and find a new inner peace. FIRE continues the tradition.
If FIRE has piqued your interest, then I direct you to a recent New York Times article How to Retire in Your 30s With $1 Million in the Bank for a pithy primer on the subject and to get acquainted with its lexicon.
One doesn’t jump from a high-stress, high-paying IT job in the city without a parachute or a plan. I was impressed by how much planning the millennials featured in the article put into executing their retreat to the simple life. They pay careful attention to every financial decision and they scrutinize even the most mundane expenditure … and then, apparently, they blog about it. I was also interested to learn that many in the FIRE movement follow the 4% spending rule, which proscribes a method for safely withdrawing funds from your savings without endangering the portfolio’s durability.
Most importantly, followers of the FIRE movement demonstrate old fashioned ingenuity and perseverance. Fundamentally, they set goals for themselves and set out to achieve them. And that’s a timeless lesson for us all.
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