FIRE stands for Financial Independence; Retire Early

Independence and Freedom are the core principles by which most of us want to live our life. In many ways though, there are invisible chains that bind us and restrict our freedom. Some of these chains are of our own creation. There are the basic necessities that you need to spend for: you need a shelter for you and your family, you need to put food on the table, pay for your kids education, healthcare etc. And then there is the consumption: weekend binges with your buddies, the latest iPhones, brand new cars every 3-4 years, a dream house with more room than you will ever need, etc. All of these do not come for free. You need a job where you trade your time and effort for money which you then trade for goods and conveniences. Many people in the modern workforce would be unable to quit their soul crushing corporate job because then they would not be able to afford the bills for their living expenses.

Businessman breaking chain for freedom and spirit in business concept scaled

Financial Independence (FI) is that stage of your life when you no longer rely on a steady paycheck. You have saved diligently and your investments are now generating income annually. Enough income, in fact, to take care of all your reasonable living expenses. This then frees you up to go explore your passions and hobbies instead.

You can of course Retire Early (RE): quit your job and sip coconuts on a beach if that’s what you really feel like. But more likely, FIRE opens up the world to you to follow your dreams without constantly worrying about whether it is too risky. Perhaps you want to try your hand at a startup but were worried before that if it failed, your family would not have enough to live on. Perhaps you prefer to work at a non-profit (even if it is a much reduced salary) to make real impact on society. Perhaps you want to pick up an alternative career, music or arts or motorcycle maintenance. rather than your soul-crushing corporate job. If you enjoy your work, you might even be able to negotiate reduced hours at your work. Work for a couple of days and spend the rest of the time with your near and dear ones.

Even if you don’t know what you really want to do, FIRE allows you to take a break, recharge and figure it out. It can pay for that unpaid sabbatical or a long slow traveling vacation around the world! You can come back refreshed and feel like a brand new person.

Whatever it is, FIRE gives you a framework to think through what is really important to you and a means to achieve it!