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Camp Fire

What is F.I.R.E.

F.I.R.E. stands for Financial Independence, Retire Early. It's a financial movement devoted to significantly saving and investing with the goal of retiring early. While every person's financial numbers and lifestyles will look different, typically the F.I.R.E. number that one aims for will allow them to annually withdraw 4% of their savings to live. For example, if I save $1,000,000, I can safely withdraw $40,000 (25% of one million) annually.

 

Components of F.I.R.E.

Everyone's path to F.I.R.E. is quite unique, but there are some common factors that people of the F.I.R.E. movement follow:

  • Detailed planning for the short-term and long-term future

  • Economic discipline (aka spending within your means, not keeping up with the Joneses)

  • Investing wisely

  • Creating multiple streams of income, savings, and/or investments (aka keeping your eggs across many baskets in case one drops)

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Why Choose F.I.R.E.

The F.I.R.E. movement is embraced by those who do not wish to live the conventional way of working 9-to-5 for more than four decades, to then retire at the age of 65. While there is nothing wrong with choosing this path, some have identified various reasons why it isn't for them:

  • Wanting to have more time for themselves.

  • Wanting to have more time at home with loved ones.

  • Wanting to travel, pursue personal projects, or things they enjoy while they have the time and energy to do so.

  • Wanting to be free of corporate life or work burnout.

  • Wanting to have more funds to donate to charity or create foundations for change.

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Levels of F.I.R.E.

  • Fat F.I.R.E. - Keeping your current standard of living with extra cushion for other things; often a more relaxed approach.

  • Lean F.I.R.E. - Requires a more restricted, minimalist lifestyle. (Think: living on about $25,000 per year.)

  • Barista F.I.R.E. - The hybrid approach between a bare-bones budget and Fat F.I.R.E., this involves using part-time work just to cover things like healthcare.

 

Interested? Or feeling unsure if F.I.R.E. is for you?

I invite you to check out this list of resources.

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