Jake writes about the FIRE Movement

A large part of the FIRE movement and smart finances in general is living within your means. What this means is to simply spend less money than you make. Even though this rule is simple, there are people with relatively high incomes who are still living paycheck to paycheck. this is due to unnecessary luxuries that cost more than they are worth. By cutting costs, people could still live with relatively the same comfort, but also have more financial freedom.

Debt should be avoided at all costs except for a house mortgage or student loans. These should be payed off as soon as possible in order for savings and profit to be maximized. Debt should also be the number one priority when it is present. It is far better to go without a few luxuries while you get rid of debt, than it is to be enjoying those luxuries with debt looming over you. As well as being more financially free when debt free, there is an emotional burden that is lifted.

The start of the FIRE movement is generally viewed as the release of the book “Your Money or Your Life” by Joe Dominguez and Vicky Robin. It is the story of, and the steps that were taken, for Dominguez to go from humble beginnings to a successful stock analyst that retired at the age of 31. The FIRE movement was furthered by a blog (2007) and a book (2010) by the name of Early Retirement Extreme. The most recent sources of FIRE content are two blogs by the names of The Mad Fientist, and Mr. Money Mustache. The authors of both of these blogs retired in their 30’s, and blog about how they retired early and how they maintain their retirement.

The simplest answer is that in general, they are not educated on retirement and finances. Many people believe that Social Security will cover a majority of their retirement expenses, so they save less of their personal income. The reality is that Social Security is only intended to account for roughly 40% of your income. As well as not being well educated about retirement economics, Americans also tend to live less than frugal lives. Whether they are living paycheck to paycheck, or taking on unnecessary debt, there is plenty of room to improve.

The topic that I have chosen to research this semester is the Financial Independence/Retire Early (FIRE) movement. The FIRE movement is, as the name implies, about being able to retire earlier than the standard 65. The main examples of the FIRE movement working have managed to retire in their early 30’s.