“The most precious resource we have is time.”
❓ What You’ll Learn
- What is the FIRE movement?
- What is the 4% rule?
- Who reached a six-figure net worth by 25 years old?
- How to simplify saving and investing?
- What is Fat FIRE?
- Why does an inner scorecard matter?
- Who retired at 39 years old with $660,000 in investments?
- Where does the 4% rule come from?
- What’s the gap?
💎 Why It Matters
Time is your most valuable resource.
🔍 Problem
We spend most of our lives working with hopes to reach financial independence in our 60s.
We may be financially wealthy but time poor by then.
💡 Solution
FIRE (Financial Independence Retire Early) is about living intentionally.
Financial independence helps you focus on non-financial forms of wealth.
Such as time, health and relationships.
To reach FIRE:
- Find out how much you need to live
- Multiply your projected annual expenses by 25
- This is your financial independence number
- Set your savings rate
- Automate investing
The “25x rule” (or 4% rule) is based on the Trinity Study. Focused on a mix of stocks and bonds.
🏁 Players
Examples
- Roshida • A lawyer took time off to travel with $660,000 in investments. Then retired to Mexico City at 39 years old.
- Amy • She went from waitressing to becoming a social media manager. She reached a six-figure net worth by 25. Amy is aiming for 7 figures by 36.
- Lynn • A nurse reached financial independence and describes her state as “work optional.” She decided to continue working.
- Amon and Christina • This couple had a combined income of less than $100,000/year. They retired at 39 and 41. They now live in Portugal with two kids.
- Bianca • This flight attendant made less than six-figures a year with children and reached financial independence.
Notable Figures
- Scott Rieckens • Author of Playing with FIRE
- Brad Barrett • Co-founder of ChooseFI
- Rich & Regular • Financial independence lessons for the Black community
- Vicki Robin • Co-author of Your Money or Your Life
- Paula Pant • Founder of Afford Anything
🔮 Predictions
- Remote work will help some reach FI sooner by separating where we work from where we live. You can boost your quality of life while lowering expenses. Work in New York City and live in Mexico City. Until wages globally normalize. Arbitrages eventually fade.
- Active investing will become more popular as passive investing gains traction. Index investing and robo-advisors such as Wealthfront are well-known. The more people zig, the more profitable it becomes to zag. With real estate, micro private equity and more.
☁️ Opportunities
- Know your why. This group shared their “whys” at CampFI. Grant found his “why” post-FI. A northstar helps you through tough times and sacrifices.
- Trial your post-FI life. The sharing economy (Airbnb and Turo) makes this easier. Planning a life of travel, jiu-jitsu or surfing post-FI? Why wait to try these experiences?
- Set an aggressive savings rate. Saving 10% of your income lets you take 1 day off for every 9 days that you work. Saving 50% lets you take 1 day off for each day that you work. This is before compound interest accelerates this.
- Set milestones to stay motivated. An emergency fund reduces stress. So does a mini-retirement fund. FIRE has levels. See LeanFIRE, FIRE and FatFIRE.
🏔️ Risks
- Status Games • Keeping up with the Joneses’. Have an inner scorecard to reach FI. Status games are a race to the bottom.
- High-Interest Debt • Debt can work for you or against you. High-interest debt may lead to net losses in wealth even if you invest.
🔑 Key Lessons
- Time is our most valuable resource. It’s nonrenewable.
- Simplify savings to make the journey sustainable. Don’t enjoy budgeting? Set an aggressive savings rate, automate investments and spend the rest.
😠 Haters
“This takes too long.”
Time will pass whether or not you’re financially independent. Or stressing about money. You can cut years or decades off your FI journey by making more, saving more and cutting expenses.
“I don’t want to cut expenses.”
You don’t have to. Focus on making more, saving more and setting an aggressive savings rate. There’s FatFIRE. Which focuses on making and saving more. Instead of only cutting expenses. There’s no wrong FI number. Your number is your number.
“This is only for people who make lots of money.”
There are examples of those who reached FI with modest incomes. A high income can help. Making more is in your control. Earn more if you prefer to hold this belief.
“Money isn’t everything.”
There are other forms of wealth. These types of wealth are easier to optimize for once you reach financial independence.
“I don’t want to retire.”
Most who reach FI (financial independence) don’t RE (retire early). They have optionality. They can take breaks. Or quit. They can do what they want to do. Not what they have to do.
🔗 Links
- Who should I talk to about the FIRE movement? • The tweet behind this report.
- Playing with FIRE • A narrative-driven book on the FIRE movement and those behind it.
- Welcome to the FI Community • On the 4% rule of thumb, saving rates and “the gap.”
📁 Related Reports
- Remote Work • Separating where we work from where we live can make FI more feasible.
- Million-Dollar, One-Person Businesses • High-skill individuals can save aggressively without compromising quality of life.
- Micro Private Equity • An active form of investing.
- DeFi • Crypto affects return expectations of younger generations.
- Alternative Assets • A look beyond traditional asset classes and the 4% rule.
🙏 Thanks
Thanks to Stewart Townsend (Podcast Hawk), Jeremy Abraham (Spiffy), Brad Barrett (ChooseFI), Scott Rieckens (Playing with FIRE), Miles Beckler, Ashwin (Trends.vc), Yarty Kim (A4E), Michael Pearson-Adams (MPA Fine Art), Sean Hua, Shayla Price (PrimoStats), Mike Privette (Return on Security), Edward Mcenrue, Evangeline Gersich (Bungalow), Christophe Williams (Cedar Labs), Mark Podolsky (The Land Geek), Robbe Richman (The Culture Blueprint), Domen Kert (500 Startups) and Roald Larsen (Untaylored). We had a great time jamming on this report.
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📈 What else?
Trends PRO #0075 — The FIRE Movement has more insights.
What you’ll get:
- 15 Examples (200% More)
- 12 Notable Figures (140% More)
- 4 Predictions (100% More)
- 8 Opportunities (100% More)
- 5 Risks (150% More)
- 4 Key Lessons (100% More)
- 11 Links (266% More)
With Trends Pro you’ll learn:
- (📈 Pro) Which engineer retired at 33?
- (📈 Pro) Who reached FIRE with 5 kids?
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- (📈 Pro) Which single mother reached FIRE by 46?
- (📈 Pro) Why do some question the 4% rule?
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- and much more…
