More and more people hear about the FIRE movement, but what is it, and how can you be part of it? In this article, we will cover all the essential information about this unusual movement, and we will give you helpful tips on how to FIRE on your own!
What is the FIRE movement?
The word FIRE has nothing to do with the element; it is actually about “Financial Independence” (FI) and “retiring early” (RE). This movement is built up by like-minded people who are interested in retiring early and achieving financial independence. Therefore, within this movement, you can find many tips and tricks around smart investments, tips on being frugal and exciting information, and stories about people who have already achieved FIRE.
This is what the FIRE movement is all about!
Are you interested in the FIRE movement and want to know more about it? If so, this is the right article for you! Here you can find interesting details and more information!
Investing and trading
FIRE is impossible if you don’t trade and invest. The idea behind FIRE is to build up your wealth and live off the returns that you receive each year. Usually, people count with 4% of recovery through the stock market; therefore, they only sell 4% of their investments, which results in never running out of money. You should be aware of how much money you need in one year and how much money you need to have in your brokerage. If you haven’t even started investing, you should have a look at some possible brokerages. Look at their reviews to determine how good or bad a broker is.
Focusing on saving money
It is not only about earning money, but rather about how much money you can save. It doesn’t matter if you earn 150K a year. If you can barely save any money, because of your high expenses, it will be difficult for you to reach FIRE. It is more important to have a fixed amount of money in your brokerage each month. We recommend that you automate this process as soon as you get your salary; therefore, you are not tempted to spend the money.
Different FIRE options
Do you feel like reaching financial freedom is impossible for you? Don’t worry; other FIRE options might work better for you. The truth is, not everyone dreams of retiring early, but having enough money in your bank account for your retirement should be on the bucket list. For example, there is another option called COAST-FIRE, which means that you have enough money to retire at a certain age, such as 60, but you are currently 40. The goal is now not to make and save as much money as possible, but only to make enough money each month to cover your expenses. This means for a lot of people to start working part-time or changing to a less stressful job. Since you don’t have to worry about earning enough money for your retirement anymore, you can switch to a lower-income job that is less stressful and more fun. Another option would be the so-called LEAN-FIRE. This option is excellent for people who want to retire but don’t have enough money to cover the yearly expenses. Rather than continue working and earning more money, these people retire early but cut out all the excess costs. They lower their early expenses, so the money that they saved up is enough to retire.
Interesting Related Article: “Ways You Can Boost Your Retirement Savings“