5 Things I Learned from the FIRE Community

Many people dream of becoming financially independent and retiring early, but it’s something that only a small percentage ever achieve. For most, work continues well into their sixties (and sometimes beyond), leaving little time to enjoy the fruits of their labor.

The idea behind FIRE (which stands for financial independence, retire early) is to provide the intellectual tools, resources, and support that people need to make early retirement a genuine possibility.

That is what’s so interesting about the FIRE movement. It’s all about the practical realities of making financial independence happen. You can see the math for yourself and use it to figure out how much money you need to accumulate to live the lifestyle that you want. As long as you understand what you need to do, FIRE is an achievable and fulfilling goal.

Many methods can contribute to furthering your journey. High savings rates, decreasing expenses, investing, real estate, and building a business are only some of the techniques that people utilize.

One of my favorite methods is taking the knowledge I’ve learned from the FIRE community and applying it to my everyday life.

Learning, Experiences, and Relationships: 5 Things I’ve Learned from the FIRE Community

Here are five things that I’ve learned from the FIRE Community. Some are acquired through my learning and experiences, while others are through the relationships we have built. Nevertheless, it’s been an eye-opening and fulfilling way of life thus far.

1. FIRE is All About Making the Math Add Up

People in the FIRE community are keen on the concept of the 4 percent rule. Essentially, this is a concept that shows you how much of your retirement pot you can afford to spend each year without it ever running out.

Let’s say, for instance, that you’ve done well and managed to save $1 million over twenty years (with a little help from the appreciation of the stock market and compound interest). The 4 percent rule states that you can use 4 percent of your total savings each year and NEVER run out of money. So, in the present example, you can afford to spend $40,000 per year forever. Remarkable!

At first glance, the 4 percent rule doesn’t seem all that logical: if you’re spending $40,000 per year, won’t the money eventually run out?

It turns out that the FIRE community has a trick up its sleeve: investing money in productive assets that generate a return. So long as you can, on average, accumulate more than 4 percent return per year on your investments, then you can live off the interest income. Some years, stocks will fall; in other years, they will rise. But overall, your total pot of money should never dwindle to zero.

See how retiring early is possible by using this fire calculator. By plugging in your numbers, it will become apparent to you how much money you need to retire early and maintain your lifestyle.

2. FIRE Followers Value their Time AND Money

Before I began with FIRE, I didn’t have a clear understanding of the value of time in my life. I saw money as the ultimate goal and not something that was just a means to an end. FIRE, however, has taught me differently. What it has made me realize is that free time itself is a valuable commodity. You need to weigh it against the time that you spend earning money.

At the start of the FIRE process, many people dedicate as much time as possible, trying to earn more money. However, as their wealth rises, they begin to see that it doesn’t make sense to work every hour of the day in pursuit of income. It’s far more rational to step back and consider what you truly value in life.

Of course, there are some people for whom working is a pleasure, and they want to spend their weeks and evenings in pursuit of income. That’s completely fine. If they love their work, they probably aren’t pursuing early retirement. They’re more interested in the financial independence part.

For most people, however, work takes away from time that they’d prefer to spend doing other things. Many much prefer spending time with loved ones, traveling, or volunteering for a cause. FIRE teaches you that as you build wealth, you can gradually transition yourself away from the relentless need to make an income towards freeing up more of your time.

Again, going back to the math, you can see how this reasoning makes sense. If you’re earning four percent interest on a million dollars, that’s $40,000 just from savings alone. Suddenly, a $40,000-a-year career becomes far less attractive. It’s no longer money that’s the limiting factor in your life, but time.

3. Your Happiness is Worth More than Money

While our society says that you need a career to have a fulfilling life, that’s not always the case. In fact, for some, going to work is a miserable and degrading experience.

The FIRE community taught me something precious: at the root of all economic decisions should be the desire for happiness. While having a lot of money in the bank is beneficial, the whole purpose of accumulating wealth is to achieve a sense of wellbeing. If work is taking that away from you, then there comes a point when it’s simply not worth it anymore.

Your job, of course, is necessary for providing a roof over your head. But for those seeking FIRE, there’s no minimum amount that you have to save to be happy. Remember, financial independence is all about living within your means. If you’re able to live off $15,000 per year without issue, then the FIRE community would say go for it. Don’t spend time slaving away at a job that makes you miserable.

4. Income Is Your Most Powerful FIRE Tool

There are many websites out there dedicated to helping people save money. Don’t get me wrong: saving money is vital to the FIRE community. You need to have a large surplus each month to put into savings. But when it comes to achieving genuine financial independence, income is the pivotal factor.

The reason for this is that we all need a basic level of income to make life livable. You can’t go without food, shelter, utilities, and the occasional indulgence. It’s just the way that we’re wired. If your income doesn’t allow you to save, you will never generate the surplus you need for financial independence. In this case, all of your money goes to covering the necessities. Merely cutting back won’t work.

The FIRE community taught me that it was within my power to make changes to my life that would enable me to boost my income. The modern economy, as it turns out, is full of opportunities for those who want them. It’s just a matter of seeking them out and making use of them. By adding even small amounts to your income, you can achieve enormous savings over the long-term.

5. You Need Support from the FIRE Community

The reason so few people reach the FIRE dream is that it’s a big challenge. You have to be consistent and deliberate in your efforts over many years. It’s a life-long commitment that can yield fabulous rewards, but, like anything worthwhile, it takes effort, motivation, and intentionality.

People in the FIRE community, therefore, don’t try to go at this challenge alone. Instead, they integrate themselves into the community as a whole and get involved with groups wherever possible. Having other people around allows you to receive guidance, advice, support, and information about how to approach the topics of financial independence.

Some of it makes sense, such as spending less than you earn. But, some of it is counterintuitive, like how to practically go about buying life insurance and which kind to buy. That’s where your support system can come in to help you make a decision.

Reach Out To Your Local Community Today

Once people plug into the FIRE community, they’re able to make substantial progress. I know that I certainly was. The beautiful thing about it is that you’ll learn that being genuinely financially independent is something that practically anyone can achieve.

For many, it’s a godsend. With it, they can finally use their time for the things that they want, instead of being forever on the treadmill of going to work to pay the bills. It gives people an exciting new lease of life and shows them what’s possible.

I learned all of this by immersing myself in the FIRE community. It’s changed my life. Reach out to your local community today and see what I mean.


Sam is the co-owner of How To FIRE, a blog that discusses financial independence and early retirement. She uses her BS in Finance and her MBA to help others get control of their finances through budgeting, saving, investing, side hustles and travel hacking. Due to following the FIRE Movement’s principles, she was able to quit her high-stress job in the financial industry in July 2019 to pursue her side hustles full-time. When not working, she enjoys spending time with her dog “Simba” and traveling with her husband, John.