FIRE movement (Ofer Abarbanel online library)

The FIRE (Financial Independence, Retire Earlymovement is a lifestyle movement whose goal is financial independence and retiring early. The model became particularly popular among millennials in the 2010s, gaining traction through online communities via information shared in blogs, podcasts, and online discussion forums.[1][2][3][4][5][6]

Those seeking to attain FIRE intentionally maximize their savings rate by finding ways to increase income or decrease expenses. The objective is to accumulate assets until the resulting passive income provides enough money for living expenses in perpetuity. Many proponents of the FIRE movement suggest the 4% rule as a guide, thus setting a goal of at least 25 times estimated annual living expenses. Upon reaching financial independence, paid work becomes optional, allowing for retirement from traditional work decades earlier than the standard retirement age.


FIRE is achieved through aggressive saving, far more than the standard 10–15% typically recommended by financial planners.[7] Assuming constant income and expenses, and neglecting investment returns, observe that:

  • At a savings rate of 10%, it takes (1-0.1)/0.1 = 9 years of work to save for 1 year of living expenses.
  • At a savings rate of 25%, it takes (1-0.25)/0.25 = 3 years of work to save for 1 year of living expenses.
  • At a savings rate of 50%, it takes (1-0.5)/0.5 = 1 year of work to save for 1 year of living expenses.
  • At a savings rate of 75%, it takes (1-0.75)/0.75 = 0.33 years of work to save for 1 year of living expenses.

From this example, it can be concluded that the time to retirement decreases significantly as savings rate is increased. For this reason, those pursuing FIRE attempt to save 50% or more of their income.[8] At a 75% savings rate, it would take less than 10 years of work to accumulate 25 times the average annual living expenses suggested by ‘the 4% safe withdrawal’ rule.


The main ideas behind the FIRE movement originate in the 1992 best-selling book Your Money or Your Life written by Vicki Robin and Joe Dominguez,[9][10] as well as the 2010 book Early Retirement Extreme by Jacob Lund Fisker.[11] These works provide the basic template of combining simple living with income from investments to achieve financial independence. In particular, the latter book published the relationship between savings rate and time to retirement which allowed individuals to quickly project their retirement date given an assumed level of income and expenses.

Started in 2011, the Mr. Money Mustache blog is an influential voice that generated interest in the idea of achieving early retirement through frugality and helped popularize the movement.[12][13] Other books, blogs, and podcasts continue to refine and promote the FIRE concept, including Financial Freedom author Grant Sabatier, who works closely with Vicki Robin and popularized the idea of side hustling as a path to accelerate financial independence[14][15][16]. In 2018, the FIRE movement received significant coverage by traditional mainstream media outlets.[8][9][10][12] According to a survey conducted by the Harris Poll later that year, 11% of wealthier Americans aged 45 and older have heard of the FIRE movement by name while another 26% are aware of the concept.[17]


Some critics allege that the FIRE movement “is only for the rich”[18], pointing to the difficulties of achieving the high savings rates needed for FIRE on a low income.[12] Another common criticism is the FIRE movement’s early retirees have not adequately saved for retirement. Because the retirement phase of FIRE could potentially last 70 years, critics say that it is inappropriate to apply the 4% rule, which was developed for a traditional retirement timeframe of 30 years; this criticism is based on the lack of empirical evidence supporting the 4% rule over a much larger time horizon.[8]


  1. ^Brenoff, Ann (2018-04-24). “7 Things You Can Learn From The FIRE Movement”. Huffington Post. Retrieved 2018-07-07.
  2. ^Wong, Kristin. “The Basics of FIRE (Financial Independence and Early Retirement)”. Two Cents. Retrieved 2018-07-07.
  3. ^“Young People Say Screw It, Retire in Their 30s”. Free. 2018-06-05. Retrieved 2018-07-07.
  4. ^Avenue, Next. “What 30-Year-Old Retirees Can Teach The Rest Of Us”. Forbes. Retrieved 2018-10-22.
  5. ^“A Growing Cult of Millennials Is Obsessed With Early Retirement. This 72-Year-Old Is Their Unlikely Inspiration”. Money. Retrieved 2018-10-22.
  6. ^“How To Get Rich: The 5 Laws of Gold That Made Warren Buffett Rich”. What They Never Taught You In School. Retrieved 10 December 2019.
  7. ^“When should I start saving for retirement?”. Money. Retrieved 2018-12-18.
  8. ^ Jump up to:ab c Stokel-Walker, Chris. “FIRE: The movement to live frugally and retire decades early”. Retrieved 2018-12-18.
  9. ^ Jump up to:ab Tergesen, Anne; Dagher, Veronica (2018-11-03). “The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing”. Wall Street Journal. ISSN 0099-9660. Retrieved 2019-01-28.
  10. ^ Jump up to:ab Kurutz, Steven (2018-09-01). “How to Retire in Your 30s With $1 Million in the Bank”. The New York Times. ISSN 0362-4331. Retrieved 2019-01-28.
  11. ^Bejder, Eva (2018-12-15). Stå af hamsterhjulet – med penge nok til resten af livet [Get off the hamster wheel – with enough money for the rest of your life] (Television production) (in Danish). Denmark: DR2. Event occurs at 6:16. Retrieved 2019-01-29.
  12. ^ Jump up to:ab c Moss, Stephen (2018-11-20). “Can anyone retire in their 30s? Meet the people who say yes”. The Guardian. ISSN 0261-3077. Retrieved 2018-12-18.
  13. ^Pennington, Sylvia (2018-02-23). “FIRE followers Down Under seek early retirement”. The Sydney Morning Herald. Retrieved 2019-01-29.
  14. ^León, Concepción de (2018-02-08). “How One Book Changed My Relationship With Money”. The New York Times. ISSN 0362-4331. Retrieved 2019-10-01.
  15. ^Marte, Jonnelle. “How this millennial saved $1 million by age 30”. Washington Post. Retrieved 2019-10-01.
  16. ^“I’m a Millennial Millionaire. Here’s How I Got So Rich”. Money. Retrieved 2019-10-01.
  17. ^The Harris Poll (2018-11-27). The FIRE Movement Survey (PDF). TD Ameritrade. Retrieved 2019-01-29.
  18. ^Howard, Miles. “Being frugal is for the rich”. The Outline. Retrieved 2018-12-18.

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Ofer Abarbanel online library

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Ofer Abarbanel online library