FIRE - the acronym - Financial Independence, Retire Early. It is an investment approach that is focused on extreme saving and aggressive investing. It is a popular approach used by young people. It has a few principles - the 25x rule - you need to save 25 times your annual living expenses for your retirement income. Then the passive investment approach of targeting low-cost index funds, and accumulation maximizing contributes to TFSAs, RRSPs and so on. It is considered a frugal style of minimizing expenses and maximizing savings rate. There seems to be a desire at the end of all this to "get out" of the work world and "retire".
There are different styles with cute names:
Traditional FIRE - Standard path to early retirement saving 50 - 70% of your income.
Lean FIRE - minimizing living expenses to the absolute essentials - tiny homes, second-hand everything.
Coast FIRE - build up a nest egg sufficient enugh to fully finance your conventional 65+ retirement years.
Fat FIRE - building a larger, more luxurious nest egg while maintaining a higher standard of living.
Barista FIRE - Saving a solid chunk of your nest egg, then leaving a traditional high-stress corporate job. Then work part-time jobs to cover current costs while investments grow.
Baby FIRE - slower, steadier approach with moderate frugality and gradual wealth-building still aiming for early retirement with fewer sacrifices.
This seems to mirror my parents' generation and their approach to financial stability. My parents saved aggressively for their first investment - buying a house. We lived very frugally as a family. I thought we were a poor family. All my clothes came from my older sister or other children. Our cars were second-hand. "Eating out" and restaurants were for rich people. Our vacations were to my grandparents and father's siblings homes in California and Manitoba, and vice versa. It all worked. They retired with excellent savings to take care of themselves. But then they were motivated by the survival instinct of having lived through the Great Depression (they went hungry) and then WWII (everything rationed). These were times of not enough food and having to leave school to work to support their families.
It makes me wonder what "depression" the current generation has grown up in. I think of today's younger adults being in a "slow burn" of oppressive conditions. Jobs come and go just like that - with long hours and poor working conditions for many. There are many more expenses for essential things like the most recent smart phone. Look at what cars and homes cost now.
Take the circumstances of children's expenses. My parents sent me out to neighbourhood park - we might play baseball. Today a family escorts their children all over the province to play in baseball leagues at membership fees that start at $150 a season and go up over $1,000 depending on the league, plus having equipment and travel costs.
So I guess the FIRE response is to be expected. Every generation "hunkers down" under the pressures of the day. Doesn't it seem an apt expression given our Climate Change impact of wildfires.
I went looking for this fire picture. It projects the opposite of frugality. It is a Floyd Elzinger sculpture that is a fire pit. That's an expensive way to roast marshmallows.
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