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March 23, 2020

FIRE Movement: Pros and Cons of Pursuing Financial Independence


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There's more to life than working and paying bills. If you're like most people, you dream of a week filled with more time and more freedom. That's why a growing number of people are joining the FIRE movement.

Here's a crash course on the pros and cons of financial independence, as well as some insight into how our family is pursuing FIRE.

What is FIRE?

FIRE is a financial movement that stands for “financial independence retire early”.

Financial independence is when you no longer have to work. Your passive income covers your annual living expenses. The retire early portion of the FIRE movement is when you leave traditional employment to pursue other avenues. 

Puritans in the movement believe that FIRE involves both achieving financial independence and retiring early from the workforce. However, there are many more people who argue for variations, suggesting that people continue to work if they enjoy it. Rather than having to retire, they view FIRE as a way to make work optional.

Why Do People Pursue FIRE?

People are drawn to the FIRE movement because of the freedom it affords them. Wanting more time resonates with everyone. If you are spending 40, 60, or even 80 hours a week working at a job, you might start to feel like there isn’t enough time left over to do the things you really want to be doing.

Being drawn to the FIRE movement doesn’t mean that you hate your job; it simply means you are on a quest for more freedom and more control over your time. For some people, it isn't even working that pushes them toward FIRE. They tire of office politics or they realize commuting for 1-2 hours a day is not ideal.

Daily Grind Makes People Pursue Financial Independence

People in the FIRE community are big on asking questions like, “What are my other options?” and “How can I optimize my day?” The FIRE movement is a way to live life on your own terms, whatever those terms may be.  

Different Levels of FIRE

The FIRE movement is based on the concept of financial independence. However, what financial independence means might depend on who you ask.

FIRE–like all aspects of personal finance–is deeply personal. How someone defines financial freedom might also depend on which camp within the FIRE movement someone falls into.

Take a look at some of the more popular ones to see which FIRE size might fit you:

Different Levels of FIRE and the FIRE Movement

Traditional FIRE 

Traditionally, FIRE is based on having 25x your annual expenses saved. Essentially, you use some type of passive income to cover about $60,000 of living expenses each year.

To reach FIRE using the 4% withdrawal rule, you need to have $1,500,000 saved. However, there are many people who argue that the 4% rule is not conservative enough for early retirees. Calculations surrounding the 4% rule are based on someone of the traditional retirement age. Therefore, many people pursuing FIRE base their calculations on a 3.5% or 3% withdrawal rate.


There are some people who don’t need or want to live on $60,000 a year. These people might live in low cost-of-living areas. They may have embraced frugality. Or they may simply intend to pull in small amounts of income to cover some of their expenses. 

These people estimate their living expenses to come in around $40,000 annually. Using the 4% rule, someone reaches Lean FIRE when they have $1,000,000 invested.


The opposite of Lean FIRE is Fat FIRE. Individuals and families pursuing Fat FIRE estimate their annual living expenses to be around $100,000 or more.

Using the 4% rule, these people need to have $2,500,000 saved. Using a more conservative withdrawal rate of 3% pushes that savings total even higher. You would have to have more than $3,000,000 set aside to be considered Fat FIRE. 

Man sitting on modern couch with laptop

The Advantages of FIRE

No matter which FIRE camp you fall into, there are many advantages to the FIRE movement. One of the first things that pursuing financial independence does is open your eyes to your finances. You can’t hide behind hunches and best guesses.

Helps You Understand Your Personal Finances

FIRE forces you to confront your spending and your saving. It also makes you acutely aware of your assets, your debts, and your net worth. Once you are armed with that information, you can start to reflect on what is more important to you. 

Gives You Flexibility With Your Goals

Another advantage of the FIRE movement is that there is no one right way to reach FIRE. Some people obtain financial independence by working traditional jobs and investing along the way. In addition to investments, you can also pursue FIRE through real estate and small business ownership.

Supports Minimalist Living

FIRE can also help people lower their stress levels. In addition to alleviating work-related stress, FIRE can help you tackle other stressors. People in the FIRE community are quick to point out that there is less waste and less consumerism in the lives of people pursuing FIRE. Not only can less stress be good for you as an individual, but it can also strengthen your marriage and your family relationships. 

The biggest advantages of embracing the FIRE movement for me have been to learn to spend on what matters and to live more generously. In fact, making charitable giving a family tradition is something that we focus a lot of our energy on as we make the push toward financial independence.

The Pitfalls of FIRE

The FIRE movement is not without flaws. One of the biggest issues of the movement are the misunderstandings surrounding it.

Dispute Over the Definition of FIRE

Lots of people like to banter over what exactly financial independence retire early means. However, most people in the FIRE community believe that the definition is personal. That’s why some people in the FIRE community don’t work at all, whereas other people pursue side hustles, monetize blogs, or generate income from other passion projects. 

Confusion on Who Can FIRE and Who Can't

Perhaps the biggest misconception surrounding the FIRE movement is that people in it are all six-figure earners who happen to be white males working in tech. That’s certainly not the case if you explore the FIRE community. In fact, the community is diversifying more every day.

Figuring out how to separate the portrayal of the FIRE community by the mainstream media and the community itself can really set the record straight. 

Rushing to Financial Independence Too Fast

Another pitfall of FIRE that people might face when getting started with the FIRE movement is feeling like they have to do too much, too fast. Financial independence is not about living a joyless life. Austerity is not a prerequisite to FIRE.

However, some people think that if they can’t change courses or accelerate their paths instantly, then FIRE must not be for them. In fact, FIRE requires planning and patience. If you find yourself getting discouraged, reach out to individuals in the FIRE community for support.

Real-Life Examples of FIRE Adopters

In my time as a blogger and podcaster, I have had the opportunity to learn from so many FIRE adopters. Two common criticisms of the FIRE movement are that FIRE doesn't work if you live in a high cost-of-living area and that FIRE isn't for people with kids. These are two of the many FIRE adopters that I've interviewed who prove those criticisms to be incorrect.

Finding FIRE in Northern California

Dylin Redling and Allison Tom
Dylin Redling and his wife Allison Tom

Dylin Redling is someone I interviewed four years ago. He and his wife Allison lost their jobs in their early 40s. What started as a yearlong sabbatical actually transformed into early retirement for both of them.

Thanks to their frugal lifestyle and their consistent investing while they were working, they actually realized that they had already amassed a savings of 50x their annual expenses. Instead of going back to work, they now enjoy a life of financial independence and blogging at Retire by 45.

Financial Independence and Kids

Jim White from Route to Retire and his family
Jim White and his family

Another interesting case study is Jim White from Route to Retire. He recently moved to Panama with his wife and daughter. Geo-arbitrage is part of their FIRE plans.

Though they may not live in Panama forever, they are calling it home for now. Their daughter goes to school there and they are embracing the local community. Thanks to financial independence, they are able to give their daughter a different cultural exposure and spend more time as a family. 

Other FIRE Examples

My Experience with the FIRE Movement

As someone who has been part of the FIRE movement, it is clear to me that there is no one-size-fits-all approach. Instead, the FIRE movement is all about making money moves that will push you closer toward the life you want to live.

Running the Numbers for Our Family

When we started digging into the math behind financial independence, it meant looking hard at our expenses. Our biggest expense each month was our mortgage. While some people in the FIRE movement certainly have sold their homes and moved to places that are less expensive, we love our house and knew we didn’t want to move. That meant we decided to pay off our mortgage to eliminate the biggest line item in our budget. 

Once I realized that I was growing more dissatisfied with work, I started to explore ways to reach FIRE faster. Real estate is commonly touted as a way to do that. We started doing our research and quickly realized that real estate felt like getting another job. Instead of taking things off our plate, it was adding to it. That’s when we made the decision to look to entrepreneurship as a means to reach financial independence. 

While active real estate investing is not for us, we diversify our investments. REITs make up part of our investment portfolios. That means that years of saving, investing, and now entrepreneurship are helping our family move to FIRE.

Related Article: 3 Real Estate Investing Strategies for Minimalists

Spending Differently and Giving More

In addition to changing how we work, the FIRE movement is also changing how we spend. The FIRE movement doesn’t mean ceasing all spending. It calls for people to stop spending money on things that don’t matter or add value to their lives. We also made sure to keep spending on other things that matter. Our kids enjoy summer camps and chances to learn new skills, like soccer. We also decided to keep our cleaning lady (a non-negotiable for my wife!).  

Being part of the FIRE movement also made me more generous. Once we had a better picture of our finances, we realized that we were giving about 1% of our income away. That was 2017. The next year, we pushed that to 3% and then 5%. This laddering up of our charitable giving is something that we intend to continue to do because it matters to us. 

Financial Independence with Kids

One of the biggest criticisms of the FIRE movement is people believing it only works for couples with no kids. Yet, my family and I are pursuing financial independence with two kids in tow. Here are a few of the different strategies we use to make financial independence work for us.

Learning the Value Behind Money

Raising kids isn’t cheap. However, combating consumerism can help. As a family, we are embracing the concept of minimalism and really questioning what we need. We have conversations about clutter, and we are in the habit of asking our kids and ourselves, “Do you really want that?” 

As a family, we also try to get outside and avoid consumerism. We live in a well-to-do neighborhood, and sometimes that can be challenging. Our kids are growing up with other kids, and they are starting to notice more and more what other kids have and how other people’s houses look. Nicole and I work to help them understand and embrace uniqueness. They are starting to realize that they don’t have to be like everyone else all the time. 

Savings Lessons for Now and Later

Additionally, we are trying to impart financial lessons early. Our kids already do chores to earn money. We do this in order to help them understand the importance of hard work and making contributions. It also demonstrates that work is rewarded. Our kids earn their age every week, which means that our eight-year-old works to earn $8. 

Once our kids earn their money, we help them look at their savings jars and decide where to put it. Currently, they have these savings jars:

  • Save
  • Spend
  • Give
  • College
  • Invest

With each conversation, we are helping them be more thoughtful with their spending and their savings. 

With a focus on the future, we started saving in 529 accounts when our kids were born. Getting an early start on college savings should allow compounding to do a lot of the heavy lifting.

However, we know we won’t save their full tuition. That means we are already talking to them about working in high school and in college to offset some of the costs. Plus, we are taking note of what other families do to help their older kids. For instance, some families do Scholarship Sunday. That means that each Sunday, they sit down and their child applies for at least one scholarship. 

Advice for Others Pursuing FIRE

For people who are new to the FIRE movement, the best piece of advice I can give is to not expect to reach financial independence overnight. Don’t get overwhelmed. Instead, look at it in steps over time.

The very first thing you can do is to start by building a budget. Then, starting the following week or the following month, try to reduce some of your expenses. Finally, strategize to find ways to boost your income.

Work on these steps incrementally with the understanding that you don’t have to perfect the steps before moving on. Remember that perfection is the enemy of progress. Keep moving forward rather than waiting to get everything just right. 

If you are ready to dive into the FIRE movement but you have a partner or a family, it is important to start having money conversations. Not everyone is going to enjoy looking at numbers or diving into spreadsheets. Instead, focus on goals, dreams, and wants. Once your partner or your family start to view money as a tool to make these things happen, it makes it easier to talk about finances and move toward the same page. 

Finally, you want to find an accountability partner. Of course, that could be someone in your own house, another family member, or a friend. However, you also want to consider the Internet. There are many Facebook groups of like-minded people that you can join. Thriving Families is our Facebook group, and there, you’ll find people who are willing to support you no matter where you are in your journey. 

Key Takeaways on the FIRE Movement

Do you want more control over how you spend your time? Are you feeling like your priorities aren't driving your day-to-day living? It might be time for you to explore the FIRE movement.

One of the first steps you can take is to learn more about your own finances and partner up with people in the FIRE community. While everyone may define FIRE a bit differently, there is definitely one thing everyone in the FIRE community has in common: A willingness to share their insights and help others succeed.

Connect with one example of this community at our Thriving Families Facebook group and get support for your FIRE journey starting today.


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I’d love to hear from you!

If you’d like your question featured on the show, reach out and let me know. It would be my honor to support you in your journey toward financial freedom.

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A goal properly set is halfway reached.

Zig Ziglar

What do you think of the FIRE Movement?

Please let us know in the comments below.

Family Financial Independence and the FIRE Movement

Andy Hill

Andy Hill, AFC® is the award-winning family finance coach behind Marriage Kids and Money - a platform dedicated to helping families build wealth and happiness. With millions of podcast downloads and video views, Andy’s message of family financial empowerment has resonated with listeners, readers and viewers across the world. When he's not "talking money", Andy enjoys being a Soccer Dad, singing karaoke with his wife and relaxing on his hammock.


  • Thanks for the shout-out, Andy – very much appreciated!

    I think you nailed it when you said that there’s no one-size-fits-all approach. Everyone’s situation and goals are so completely different from each other that you can’t just lump it into one path.

    For me personally, I felt the effects of penny-pinching too much for a while before FI. I wanted to reach FIRE so bad that I became obsessive with cutting costs. That lasted about a year until I woke up and realized how stupid that was to forgo the present for the future. And guess what – we still got there!

    As far as working goes, I’m definitely enjoying the retirement portion of things right now. Yes, my blog throws off a little bit of income, but not much. We’ll see what the future holds though – I’m not opposed to bringing in more money. Some people feel that’s not really retirement, but if you start doing different fun things that end up bringing in some dough, no harm no foul in my book!

    Wishing you and your family all the best during these uncertain times, Andy!

    • I love how you found YOUR way to do FI through trial and error. I loved speaking with you last year about your path and your family’s plan to do Panama. It sounds like everyone is doing well!

      Stay safe my friend.


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Marriage Kids and Money Podcast

About Marriage Kids & Money

The Marriage Kids and Money Podcast is dedicated to helping young families build wealth and happiness.

With over 400 episodes and counting, we share interviews with wealthy families, award-winning authors, and personal finance experts to help you find your version of family financial independence.

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