FIRE is not for only the high earners!

When you look on typical FIRE forums like on reddit etc, it’s easy to see a large proportion of doctors and engineers with high 6 figure salaries all shooting for FIRE.

Many newcomers to Financial Independence get discouraged because they think this is feasible only for the high income earning engineers, doctors and lawyers who can afford to save a lot without even breaking a sweat.

To be fair, it is certainly easier if you have a large disposable income, but an important thing to keep in mind is this:

How much you save is more important than how much you earn!

Take an example of 2 people, who are both starting out in their FIRE journey. Alice has a less than median household income of $50K but she is careful to control her expenses and save aggressively. Let’s say she lives on half her take home and invests the other 50% on index funds. Bob who makes $300K – nearly 5 times the median salary – has a larger lifestyle with fancy houses, boats and cars. Bob saves only 10% and needs the rest for his lifestyle.

Alice saves $25K per year and Bob saves $30K per year. One would expect Bob to beat Alice to the finish line because he is saving more. However when we look at the actual time they take to reach financial independence, Alice can afford to retire in just 17 years while Bob needs to work for 51 years before he can afford to retire!

Here is the take away: The bigger your savings rate, the faster you can achieve FIRE, regardless of your income!