FIRE for the moon but be content to fall amongst the FI stars

FIRE cartoon

There’s a movement that’s be brewing within the finance world for a number of years, knocking on the door of the mainstream and threatening to overturn convention.

It’s a concept that subverts the accepted, and perceived inevitable, norm around how you should live and spend your way through life.

I’m talking about the FIRE movement: Financial independence, retire early.


“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.” (Wikipedia: 2019).


Its ideas originate from books such as, Your Money or Your Life and blogs like Early Retirement Extreme and Financial Samurai. Following these, articles such as, Mr Money Mustache’s eye opening post The Shockingly Simple Math Behind Retiring Early popularised the concept and detailed the power of optimising your spending along with the incredible power of compound interest over time.

Of course, a lot of what underpins the FIRE movement can be quite off-putting to a lot of people from the get go before they’ve even considered the additional benefits its concepts can bring.

In theory, a 50% savings rate allows an individual to retire in just 17 years and a 65% rate reduces that to just 10.5, allowing that person to escape the need to work; the no longer work to live, they live to work…working has become a choice not a necessity. This is seemingly unachievable for many families and individuals with expensive responsibilities and those on low wages and unavoidable high costs such as rent.

But it’s the lifestyle lessons that allow this to be more than just a ‘rich man’s game’. Many that practise what this concept teaches are not on six figure salaries or lucky enough to be born into rich families with trust funds.

In an age where debt is becoming normalised and adverts are constantly being pushed on you at every turn to buy the next latest and greatest, FIRE teaches us to take a step back from this rabid consumerism and take a financial breather.

FIRE requires you to build a solid, long-term budget and spend less than you earn. This enables the individual to take back control of their spending, value experiences over things and focus on savings rate and percentages rather than numerical amounts.

While this may be out of reach for many, you can still apply the principles to your everyday life.

Do I really need that next iPhone? Am I really squeezing the best deal out of my insurance company? Are my savings working for ME and not further lining the CEO of insert bank here’s pockets?

Even if you don’t manage to retire before the age you can withdraw your private pension, you can still reap the benefits of maintaining a budget, regular savings/ investments and realising the real value in the things you buy (some of the key principles of FIRE).

The FI part of FIRE really highlights its applicability at any level of income. But what’s the harm in aiming for a 50% savings rate. Try it out for one month.

Take an afternoon to shop around for the best energy and insurance deals; make a meal plan for the whole month to reduce wasted money on food that goes uneaten, then with this excess money, throw it at a low cost index fund (see this link for more info).

If you don’t hit the 50% rate…so what? No bother…reset and try again, but this time with a 40% savings rate target. Keep doing this until you find a rate you’re comfortable with that you can realistically stick to – remember this is all about consistency and perseverance, getting yourself into a routine of tucking money away and thinking about money as a tool rather than just numbers on a screen). Furthermore, don’t beat yourself up about having a duff month where you end up spending your wages on something like a big holiday…that’s also ok. Just reset the next month and go again. Here you’re showing good financial intentions and you’re aiming for the FIRE moon, not being afraid to fall amongst the FI stars…most of us will end up there anyway. FIRE isn’t about depriving yourself of fun…again it’s about being intentional.

The same applies to your pension. If your company matches any contributions you make to your private pension…DO IT! This is free money both from your employer and from the tax relief you get from the money coming out of your pre-tax pay cheque.

Learn to live off of less money. Any excess windfalls you receive: bonuses or inheritance. Pretend it never happened. Tuck it away into a high interest account or invest it again into a low cost index fund (link again to show how much you can benefit from these). Your future self will thank you.

Likewise, if you have recently managed to clear some debt, use this to your advantage. Up until this point you have been used to budgeting a certain amount each month to go towards paying down the aforementioned debt and then living off of the rest. So why not continue to do this? Hear me out…

This time, however, instead of putting that set amount towards the debt, because it’s now clear, redirect this money into a savings/ investment account and continue to live on the money you have been used to living off of when you had debt. This avoids lifestyle inflation and gives you a nice little pot you wouldn’t otherwise have had.

Overall, the FIRE movement teaches us, at all levels of income and stages of life, to be purposeful with our money, to be patient with it and allow it to grow and work on behalf of us. Even if we don’t end up retiring much earlier than the standard retirement age, at least you’ve given yourself the independence and security to weather any financial storms that come your way. Say no to living pay cheque to pay cheque and resigning yourself to a life of financial struggles. There are so many options open to you if you look for them. You CAN change your behaviour towards money if you really want it.



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