Playing with FIRE

If you are interested in personal finance then you may already know what FIRE is. If you aren’t someone that has heard of the FIRE movement then let me break down – what it’s about & why it may interest you to learn about it.

FIRE stands for Financial Independence Retire Early. It may sound a little “out there” and pyramid-schemy but it’s not. The FIRE movement is not a magic pill for getting rich and how you’ll get to sit on a beach somewhere and drink margaritas all day, well at least not for a majority of the people that take this journey. 

The FIRE movement is an idea that by considerably lowering your monthly expenses and saving and investing a large chunk of your after-tax income (often between 60-90%), you may one day be able to cover all your monthly expenses without having to work a job you don’t like or are tired of doing. It’s not about not working but about spending your time on projects that you really want to work on – whether or not there is a financial incentive or not. There are a large number of people who have achieved FIRE and have written about their journey all over the internet. And most of them share their journey through their blogs or YouTube videos which also ends up being a source of income for them after they have “quit the rat race”.

The idea behind FIRE is to live extremely frugally for a couple of years and then spend the rest of your life doing “what you love”. But there are a lot of factors that go into achieving FIRE and it’s definitely not something the majority of people can pursue for a number of reasons.

The kind of job you have and the income you make has a big impact on how much you are able to save and invest. At the start, FIRE was something only for highly paid tech or engineering workers in the United States to aspire to. They would work very hard for a couple of years to reach their FIRE number* and then quit their jobs and do whatever they wanted to after that.

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The FIRE movement in a nutshell

FIRE is hard work. It gets even harder if you have kids because everyone knows that the cost of raising kids is enormous. Now this financial impact can be mitigated if you live in a country that provides a good quality education for free but in some countries including Kenya, if you want your kids to have a good education, that means shelling out a pretty penny for private school.

I’m not trying to discourage anyone from thinking about pursuing FIRE. I think it’s an amazing concept and I’m certainly intrigued by it. I try to use some of that tips in my daily life to be able to save and invest better and find ways to lead a better and sustainable life. FIRE has a lot of parallels with living a minimalist life – appreciating the simple things in life and not getting caught up in all the materialism. 

I hope I’ve left you with questions about FIRE and how long it would take you to FI yourselves. If you want to learn more about FIRE, I would recommend two sources that I absolutely love and I think are a great starting point for anyone who wants to learn more. The first is Mr. Money Mustache, a blog run by Peter Adeney who is like the godfather for FIRE. The second is the FIRE Reddit page where you can see a lot of people posting what FIRE means to them and how they are trying to achieve it. It’s a great community to read about, learn from and they are extremely supportive – unlike most of the internet.

 

Check it out and let me know what caught your eye about the FIRE movement.

 

P.S. I came across this website (Stepping Stones to FI) and I would highly recommend it!

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