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Have you ever wondered, “Does the FIRE Movement work?” If you’ve ever asked yourself this question, you’re in the right place!

Perhaps you’ve recently heard about the FIRE movement, or maybe you’ve heard bits and pieces about it over the years. Maybe you’ve even heard about it numerous times, but you’re incredibly skeptical about it.

I was skeptical when I first heard about the FIRE movement too, and it’s nothing to be ashamed of. If this is you, then I applaud you for wanting to learn more.

Regardless of your level of awareness or belief in the FIRE movement, this article will help you answer the question, “Does the FIRE movement work?” once and for all.

Spoiler alert: yes, the FIRE movement does, in fact, work. However, it takes an immense level of discipline and dedication.

Financial freedom doesn’t come easy, but it is worth the pursuit.

By the way, if you’re new to FIRE, you might want to check out this handy intro article:

What Is the FIRE Movement?

So, “Does the FIRE movement work?” A brief overview

The FIRE movement (Financial Independence, Retire Early) is a popular financial movement that helps people achieve financial freedom and retire early.

Yes, the FIRE movement can actually work for anyone. 

It’s about living below your means. It’s also about saving and investing as much of your income as possible. 

By following FIRE, you can eventually reach a point where your investments generate enough income to cover your living expenses. When you reach this point, you can retire early or pursue other passions (if you so choose).

Sound too good to be true? It’s not, but it doesn’t come easy either. More on that in a bit, but first, I’m going to explain some of the simple ways FIRE can help you achieve your financial goals.

So the FIRE Movement Works… But How?

Here are some specific ways the FIRE movement can benefit you and help you achieve financial freedom:

Benefit #1: Pay off debt

Debt is a wealth destroyer. Have you ever considered how much money can be wasted on things like interest? The FIRE movement can help you outline a framework to pay off your debt.

Now, I’m not saying all debt is bad. There’s good debt and there’s bad debt. Even the wealthy acquire some kind of debt, but they know how to avoid the bad debt.

To have extra money to save each month, you’ll want to pay off any so-called “bad debt.” Debt can be a major obstacle to financial freedom, so it’s important to pay it off as quickly as possible.

For example, let’s say you have $10,000 in credit card debt with a 17% interest rate. If you make minimum payments of $150 per month, it will take you over 17 years to pay off your debt and you’ll pay over $20,000 in interest. YIKES.

However, if you can make extra payments, you can pay off your debt much faster and save money on interest. Even better, you can put that $20,000 toward investments and make your money work for you instead.

Benefit #2: Increase your income

One of the best ways to accelerate your path to FIRE is to increase your income. When you follow career and FIRE best practices, you can expand your income and achieve financial freedom sooner.

You may find a way to get a raise at your current job, start a side hustle, or find a new job that pays more than your current job.

For example, let’s say you’re currently earning $50,000 per year. If you increase your income by 10%, you’ll earn an extra $5,000 per year. This extra money can be used to pay off debt, save for retirement, or invest.

Benefit #3: Invest your money

When you put your money into wise investments, your money can grow over time, helping you reach your FIRE goals even faster.

It’s always a good idea to ensure you have a solid savings cushion first, but once you do, find some solid investments that will help you reach your financial goals.

There are a variety of investment options available, such as stocks, bonds, and mutual funds. It’s important to do your research and choose investments that are right for you.

The Challenge: Live Below Your Means

Have you heard the stories of people who went broke shortly after winning the lottery? Or celebrities that made a fortune, only to lose it all in a matter of a few years?

Ultimately, how much money you have doesn’t matter when it comes to FIRE, especially when you’re first starting. But for those who are bad at managing their money, financial freedom will remain elusive.

How Does the FIRE Movement Work When it Comes to Habits?

What matters is developing refined and disciplined financial habits. This means spending less money than you earn. With the FIRE method, these habits should naturally support your efforts to pay off debt, increase your income, invest your money, and achieve your financial goals. 

Those habits are what will allow you to achieve financial freedom. With discipline and determination, it is possible to achieve FIRE.

It may mean making compromises on the things you want, like forgoing your monthly clothes shopping trip or eating out one less day per week.

There are many different ways to live below your means, such as cooking at home instead of eating out, shopping around for the best deals, and avoiding impulse purchases.

You don’t need to cut out anything and everything, but ultimately, you’ll need to decide where to splurge vs. save. 

Your financial freedom depends on you making wise decisions for your financial future.

For example, let’s say you’re currently spending $3,000 per month on living expenses. If you can find a way to cut your expenses to $2,500 per month, you can save $500 per month. This extra money can be used to pay off debt, save for retirement, or invest.

So How Does the FIRE Movement Work? A Case Study

How does the FIRE movement help you achieve your goals? Let’s look at a couple of hypothetical examples:

John

Problem

John is a 30-year-old man with $50,000 in student loan debt and a $20,000 car loan. He is making $50,000 per year at his job, but he is struggling to pay his bills and save money.

Solution

John decides to follow the FIRE movement to achieve financial freedom. He starts by creating a budget and tracking his expenses. He then makes a plan to pay off his debt as quickly as possible. He also starts investing his money in index funds.

Results

After five years of following the FIRE movement, John has paid off all of his debt and has saved $100,000. He also has a job that he loves and that pays him $75,000 per year. John continues to invest his money, and after ten years of following the FIRE movement, he has saved $500,000.

Sarah

Problem

Sarah is a 25-year-old woman who is deep in debt. She has $20,000 in student loans and $5,000 in credit card debt. She is working a part-time job that pays her $25 per hour.

Solution

Sarah decides to start following the FIRE movement. She creates a budget and commits to saving 50% of her income each month. She also starts looking for ways to increase her income. 

After some time, she finds a full-time job that pays her $50 per hour. Then she starts a side hustle as a freelance writer.

Results

Within two years, Sarah has paid off all of her debt. She has also saved $20,000. She decides to invest her savings in a low-cost index fund.

Sarah continues to work her full-time job and freelance writing side hustle. She also continues to live below her means. After five years, Sarah has saved $100,000. By now, Sarah’s investments are generating enough income to cover her living expenses.

Benefits

At the age of 30, Sarah decides to quit her job and live off of her investments. She now has the freedom to do the things she loves, such as traveling and writing.

Conclusion

Now you have an answer to the question, “Does the FIRE movement work?”

As you learned, yes, the FIRE movement can help you or anyone else achieve financial freedom. 

By living below your means, saving a high percentage of your income, and investing your money wisely, you can reach a point where you can retire early or pursue other passions.

FIRE doesn’t come easy, but financial freedom is almost always worth it.

Curious and want to learn more? Check out the posts page for the latest ways you can follow the FIRE movement to achieve financial freedom. And feel free to comment with your questions below! I’d be happy to provide input to support your current circumstances.

Best of luck to you on your journey to FIRE.

Now that you’ve answered the question, “Does the FIRE movement work?” you might be wondering what other methods you can use to FIRE Your Career. Check out the posts page for more ways you can FIRE Your Career and achieve financial freedom.

FIRE Your Career: Achieve Financial Freedom Through Your Career & Spend MORE Time Doing What You Love.

Tools I frequently recommend:

Strengths Finder (book to help you uncover your innate strengths, includes a free personality quiz)

ClickUp (my recommended goal-tracking and project-management tool)