How the FIRE strategy could allow you to retire earlier

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When it comes to making or saving money, by and large we all have a goal we’re working towards. Often these are explicit and carefully mapped out, like saving for a new house or paying off your car loan.

Other times they’re a bit more nebulous, like aiming to reach a certain level of savings where we feel secure, or putting money aside for a holiday, even if you haven’t decided where you’ll go or how much it’ll cost you.

Regardless, there are very few of us who sit at the lower end of the spectrum, not thinking about how we spend or save our money at all. And similarly, there’s not many of us at the opposite end, where every dollar is saved, and every decision meticulously planned out in dogged pursuit of a singular goal. But if that does sound like something you’d be interested in, you best make like a caveman, because it’s time to discover FIRE.

What’s the problem?

Standing for Financial Independence, Retire Early, FIRE isn’t a new movement, having first sprung up in the ’90s. However, it came to prominence around 2010 thanks to many online money bloggers who popularised it, and since then, has gained a range of devout followers across the globe, most of them Millennials.

At its core, FIRE focuses on extreme savings – up to 50-75 per cent of your income – which is then invested with the goal of being able to live off your investments and retire early, with the idyllic retirement age of 40 often touted by many FIRE fans.

What you can do about it

So what’s this movement all about? And is it at all realistic?