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What is FIRE?

The FIRE movement has its roots in the early 2000s, when home prices rocketed and showed no sign of slowing. Young people who were scared of having to work well into retirement just to pay their bills looked for another way to live. Books about investment and the financial habits of the super-rich became popular, and the stock market crash of 2008 meant that some were able to invest at the bottom of the dip and make impressive returns. The FIRE community grew out of this money-conscious environment and a genuine desire to achieve financial freedom as early as possible.

Today, the FIRE community represents several hundred thousand people – many of whom are young Americans in their mid-twenties to mid-thirties, mostly without children, and working in STEM industries. They start working – often as students – and constantly invest to retire earlier than their classmates. The movement members themselves confirm that this strategy is not for everyone – it suits people with a relatively high income, financial knowledge, and self-discipline.

The 4 FIRE principles

1. The conscious decrease in consuming

FIRE brings together an intense drop in consumption – this means limited travel, very little leisure spending, no unnecessary shopping – with an increase in investment. It may even include developing more income streams to maximise earnings potential.

2. Investing 50% to 70% of income

FIRE activists believe that the investment of their income to achieve an amount that represents 30-35 times their annual earnings is the best way to achieve a comfortable post-work life. There are different forms of FIRE, with more or less extreme approaches, but they are all about saving more and spending less.

​3. The 4% rule

In order to ensure saved capital doesn’t run out, FIRE proponents suggest that you should never withdraw more than 4% of the amount you have saved. This method is based on research by William Benning in 1994, and takes into account market cycle changes, world crises, and global economic issues.

4. Invest in high tech and small funds

FIREsts often focus on investments and small funds based around technology and future industries. They follow proper investment advice to create a balanced portfolio, with many choosing to diversify across industries and geographies.

The FIRE movement is often criticised. Why bank everything on an uncertain future? And what if you face an unexpected crisis– on a personal or global level? Some want to try but don’t have a large enough income to make it work – is that fair? Do FIRE values resonate with your way of life? Why not explore open positions over on the Kelly website– some of them may be hot enough for you to handle…