What Is FIRE?

FIRE is financial independence and early retirement.  ERE is the other acronym commonly used, which stands for early retirement extreme.  I knew nothing of these concepts a year ago.  Now, I feel enlightened and driven by these ambitious and rebellious lifestyle designs.

To add some perspective, let’s ask the question: when is “normal” retirement?  The Social Security Administration defines normal retirement age as 65 to 67 years old (depending on the year that you were born).  Currently, reduced benefits are available from the SSA for retirees who are 62 years old.   So, I’m expected to work for at least the next 30 years?  NO THANK YOU!

Financial independence is freedom.  It is accomplished when money works for you instead of controlling you.  You’re free to enjoy your life, without stress from a job that you hate or bills that you can’t pay.  While I’m still working out the details for our strategy to achieve this goal, there seem to be three main steps:

  1. Live a frugal life, well below your means.  You need to earn more and save as much of your income as possible.
  2. Use the surplus to pay off all of your debt and invest in some type of independence-enabling mechanism (ex. rental property, stocks).
  3. Enjoy independence from the tyranny of working full-time until 65, or later – while maintaining your anti-consumerist lifestyle – funded by the return on your investments and/or miscellaneous income.

Note:  Increased surplus (by earning and/or saving more) will allow you to reach independence sooner.

The steps are basic enough, but many question whether the process can work in real life . . .

Two examples and my role models:

Mr. Money Mustache: 

He and his wife were able to retire at 30 years old.  They did not accumulate debt and he was able to save 66% of his income.  The surplus funds were used to purchase rental property and investment funds.

He sums up how to cut your living expenses like this, “Here’s how to cut your life costs in half. Start by getting rid of your Debt Emergency if you have one. Live close to work. Move to another city if you enjoy adventure. Don’t borrow money for cars, and don’t buy stupid ones. Ride a bike wherever you can. Cancel your TV service. Stop wasting money on groceries. Give your kids the opportunity to achieve greatness without being pampered. Lose the overpriced cell phones. Learn to appreciate the life-boosting joy of using your own body to get things done. Learn to mock convenience. Practice optimism.”  http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-hero-in-one-blog-post/

The Frugalwoods:

In 2014, this couple saved 71.4% of their income . . . after maxing out their 401k’s!  They plan to achieve financial independence by 2017 (at the age of 33).  At that point, they will quit their jobs and move to a homestead in the woods with their adorable greyhound.  They explain their anticipated future financial position as, “We don’t plan on going entirely sans income after quitting our 9-5’s–we’ll be pulling down rental income from our current Cambridge, MA home, growing our own veggies, planting fruit trees, building a few cabins to rent out on Airbnb, freelance writing and editing (Mrs. Frugalwoods), welding-for-hire (Mr. Frugalwoods), and whatever else comes our way.”    http://www.frugalwoods.com/2014/07/16/more-than-you-ever-wanted-to-know-about-the-frugalwoods-family/

Ultimately, financial independence and early retirement are individually-tailored goals.  An essential part of the process is to focus on your actual needs, as opposed to the expectations of society.  Don’t buy brand-name clothing, a new car on credit, and a huge house in the suburbs, with the excuse that you’re entitled because you work hard.  Don’t spend money just because you believe it’s important to your status level, the perception of others, or advancing in a career that you don’t particularly enjoy. 

Right now, I’m working for every dollar that I earn.  I am trading my time, my freedom, my life . . . for money.  My car is from 2007 and we paid off the loan last year.  The average consumer probably would start thinking about buying a new car by now, because, why not?  They “deserve” it.  But, assume that the new vehicle cost $25,000 (plus interest on the loan).  We could live off of that amount of money for a year – or more, if it were invested.  Is a new car worth trading away another year of my life to working?  ABSOLUTELY NOT.

Unlike the couples mentioned above, we have a significant amount of debt to tackle before we can taste freedom.  That being said, I fully expect to continue earning money after reaching the independence road mark, just on my own terms.  The key for us is implementing and maintaining a frugal lifestyle.  This will allow us to escape from debt, so we can build up our assets.  Then, we will have options and can design the optimum life for our family – oblivious to the status quo.


  1. Lovely role models to have! I love the Frugalwoods and the journey they’re on. I still have to pay off my student loan debt, but after that I hope to place the focus on funding my retirement, with the goal of becoming financially independent in about 20-25 years. Completely agree that a new car isn’t worth an extra year of working!

    1. Harmony

      THANK YOU! We still have a long way to go and are figuring out the best strategy for us. Luckily, we have the two of you to provide continued inspiration and great tips 🙂

  2. This is quite a “coincidence” that I found this today! My husband and I have been talking about all the aforementioned “why and what are we working for and toward?” We are in the last “career” pursuit- inflate 50’s and early 60’s. I have one student loan left, and we have one credit card to get rid of this year. We’ve downsized from 2500sf 3-4 bedroom homes, over the last 11 years to our now quaint 780sf one BR&1BA apartment. Which we filled with Craig’s List, Goodwiil, yard sales and my newest find,our local Buynothing clubs! Check them out! A great way to share goods, furnishings, services, clothes and skills! Building and sharing community. Anyway. our apartment is cute, cozy and very inexpensive! We have half the salary we had from last year, but we still have money in savings and are paying down our debt. Our goal is to. E full-time RV-ers and do work camping and mobile ministry. That is part of our debt too. Pay it down enough to where we can easily sustain with our retirements and savings in case Social Security goes bankrupt in 5-6 years – we’ll be set. We LOVE DOING LESS WITH MORE! We don’t have a TV either- over a year and haven’t missed a thing! We play games, walk, hike and even talk to each other! Looking forward to hearing more about your process and transition.

    1. Welcome Tammy! I’m so happy you found your way to this site. It sounds like you and your husband are definitely on the right track. I promise to do my part in keeping everyone updated on our progress, but I hope that you share as your status changes as well. Maybe we’ll cross paths with you on our road trip 🙂

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