What Is The FIRE Lifestyle?
The Financial Independence, Retire Early movement (a.k.a. the FIRE lifestyle) is a way of living to become financially independent and retire early by investing and saving money. Sometimes, this method can let you retire decades before your traditional retirement age by living frugally, saving 75% of your annual income, and investing as much as possible.
While the FIRE lifestyle can help many people retire early, this level of strictness isn't right for everybody. Use this brief guide to decide whether the FIRE lifestyle is a good fit for your finances. Also, learn how to handle urgent expenses with emergency cash loans like online title loans.
Understanding The FIRE Lifestyle
Many of the concepts of the FIRE lifestyle movement were inspired by Vicki Robin and Joe Dominguez's book Your Money or Your Life. The authors encouraged people to think differently about money—both spending and saving it.
FIRE followers plan to retire before the common retirement age of 65. Reaching this goal often requires extreme sacrifices and dedication. They slash expenses to boost the sum they can save or invest.
While every person's debt, income, and dream retirement age are different, FIRE followers tend to save three-quarters of their earnings. Alternatively, they boost their income with passive income streams or side hustles. As such, they can invest enough money to live off withdrawals during retirement.
What Are Three Common FIRE Strategies?
Early retirement is the main focus of the FIRE movement. However, many people have adapted the FIRE lifestyle to fit their specific needs. There are many different iterations of the FIRE lifestyle that can lead to greater savings by spending less money.
The following are three common examples of the FIRE lifestyle:
1. Lean FIRE
People following the Lean FIRE method tend to live minimally and plan a fairly modest lifestyle throughout their twilight years. It's a type of financial independence that covers basic needs only, with those following it saving much more than the conventional FIRE lifestyle.
The design of the Lean FIRE method is to live on 45K to 25K during retirement. It’s a lifestyle based on eliminating unnecessary spending and avoiding living a luxurious life of consumption. For many, these different FIRE lifestyles have as much to do with their value system and the ways they wish to live as it does with saving money,
Those following the Lean FIRE lifestyle do not believe that happiness comes from heavy consumption or spending, so they plan to live a modest lifestyle through retirement.
2. Fat FIRE
The Fat FIRE lifestyle is on the other end of the spectrum of the Lean FIRE lifestyle. Individuals taking this route don't want a limited budget to restrict their retirement; they want extra income for traveling, shopping, and more during their final stage of life.
To reach Fat FIRE goals, you need to save more aggressively than the Lean method. Most who follow this more aggressive saving route have higher-paying jobs or side hustles to augment their income. This allows them to save more than the average person and have much more money to spend luxuriously during retirement.
3. Barista FIRE
This method aims to save enough to retire from full-time jobs, letting those living this lifestyle enjoy an excellent work-life balance. Those following this model will save enough to partially cover living expenses and keep a part-time job to supplement their savings.
With that in mind, you don't necessarily need to make the same strict sacrifices as those alluded to in the Lean and Fat methods. You're just looking to save enough that your nest egg, along with a part-time job, can afford a modest lifestyle.
What Are The Benefits And Limitations Of The FIRE Lifestyle?
As with every method of saving money for the future, the FIRE lifestyle has advantages and drawbacks. Deciding to live one of the above three lifestyles depends on what your goals are for your life. Consider what type of lifestyle you want to live now and during retirement while considering the pros and cons of the FIRE lifestyle.
Before deciding whether this method of saving money is right for you, consider the benefits and limitations:
Benefits Of The FIRE Lifestyle
The FIRE lifestyle is all about control of your time and money. Those who follow this lifestyle can afford to take their life down many different paths later in life because they don’t have to worry about working.
They can travel, follow their ambitions, and enjoy their hobbies without worrying about a stressful job. As long as they save enough money, they can relieve financial pressure and avoid the stress of needing income to sustain their lifestyle.
Limitations Of The FIRE Lifestyle
The FIRE lifestyle is not for everyone; you will have to live a strict, disciplined life in your 20s and 30s to afford this lifestyle. While other people your age may spend their money on luxuries like trips, new outfits, and expensive cars, you will save money for the future. While that can pay off down the line, not everyone wants to put strict limits on their spending when they’re younger.
The roadblocks people face in their lives can also make this lifestyle unsustainable. When facing significant expenses, it can be hard to afford to save 75% of one's income. Financial emergencies can also derail savings.
Getting An Emergency Loan To Cover Unexpected Expenses
Whether you follow the FIRE lifestyle or not, you may need emergency money to cover home repairs, medical bills, veterinary fees, and more. Utah Title Loans, Inc. can help you with emergency loans, including car title loans, payday loans, and signature installment loans.
Unlike traditional loans from banks, you don't need a good credit score. Instead, we use different metrics to determine whether you can qualify for a loan from us. For a title loan, for example, we use the value of your vehicle to decide how much you can borrow. We use your most recent pay stub for a payday loan to get an accurate picture of your current financial state.
Regardless of the specific loan, you can kickstart the process by completing our online inquiry form. We'll be in touch to discuss the process, answer your questions, and ensure you meet the requirements to qualify. You can receive your emergency money as soon as the same day or the next business day.
Get An Emergency Loan From Utah Title Loans, Inc. Right Now!
The FIRE lifestyle is a way of saving money to retire early and achieve financial freedom, but it isn't suitable for everyone. Unexpected situations can happen at any time, and people may need a bit of extra cash, foiling FIRE plans.
If you need urgent cash right now, contact Utah Title Loans, Inc. now! Fill out our online inquiry form, and one of our helpful loan associates will call you to guide you through the loan approval process.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.