If I ask you to think about “retirement,” what classic images come to mind? No doubt it’s white-haired people strolling a beach in Florida, swinging golf clubs, or driving around the country in a mall-sized RV. Retirement has long been thought of as finite: work hard every day of your life until you don’t.
Of course, the middle to upper class boomers may be the last to wholly own this definition. For the generations that follow, increased life expectancy, rising cost of living, and fewer traditional career paths contribute to a vision of retirement that’s a little less clear cut. When I first heard of the FIRE movement, I wondered: what 40-year-old like me wants to sit on a beach all day, every day?
And this is where the traditional definition of retirement falls apart.
FIRE, short for financial independence, retire early, is a movement that gained momentum in 2018 and has since amassed a huge following. In a late 2020 survey* conducted by Shopify and the Angus Reid Group, 9% of non-retired adults in the US reported they were actively pursuing FIRE, while another 39% said they were considering it.
Most of us won’t be able to fully retire at 40, but FIRE shows us that work can look a little less, well, like work.
But what does “retirement” mean to FIRE’s ardent followers? And what defines “early”? Well, that depends. The movement’s early adopters took an aggressive approach—one that is inaccessible to most and requires layers of privilege. There are lessons to be learned from the movement, though. Most of us won’t be able to fully retire at 40, but FIRE shows us that work can look a little less, well, like work.
We’ve consulted personal finance experts for their takes on FIRE and their advice for owning your financial future. And we’ll dig into the most accessible takeaways from the movement, including small business ideas to help you increase and diversify income.
Meet the experts 💰
Shannon Lee Simmons is a Certified Financial Planner, Chartered Investment Manager, and founder of the New School of Finance, a financial planning and coaching firm. She is also the author of two books and has been featured as a money expert across a number of media outlets. Shannon believes in realistic and sustainable financial plans.
Kiersten and Julien Saunders co-founded the brand rich & REGULAR, a community that encompasses a YouTube channel and a forthcoming book dedicated to having better conversations about money. Kiersten and Julien have chosen the entrepreneurial path to FIRE, focusing more on business growth than a hard-stop retirement plan.
Nick True is the host of Mapped Out Money, a personal finance content hub that includes a podcast and a YouTube channel. For several years, Nick and his family delivered their unique perspective from an RV, where they lived and worked from the road. Nick doesn’t consider himself to be part of the FIRE movement. “I have no interest in retiring early,” says Nick. But his practical advice for saving and increasing income resonates with an audience pursuing financial independence.
What is the FIRE movement?
FIRE is a way of life that, in its purest form, allows its followers to “retire” early, usually in their 30s or 40s, and gain financial independence through means outside of the 9-to-5 grind. This is generally achieved through a combination of frugal living, investing, and increasing income.
Who is FIRE for? And is it even realistic? On its face, it’s an extreme lifestyle that isn’t attainable without privilege. Our research found, unsurprisingly, that the demographic for this group skewed toward single millennial men in a high earning bracket. Fully retiring at 40 requires that the FIRE pursuer be unencumbered by obligation and limitations. For underrepresented groups who face barriers in the financial system, pursuing FIRE can be even more challenging. But full retirement isn’t actually the goal for the majority of FIRE’s followers.
The heart of the FIRE movement is the dream of opting out of the grind. That’s what it’s offering.
Shannon Lee Simmons, The New School of Finance
Since its inception, the FIRE crowd has split into the purists and the Sunday drivers. That is, those leaning into the FI part of FIRE and taking realistic steps to secure independence. “These days, a lot more people are willing to slow down their path to FI,” says Julien, “instead of taking a no-holds-barred high-speed sprint approach.” A few terms—and subreddits—have sprung up to distinguish these FIRE paths. LeanFIRE indexes high on the minimalist lifestyle while the BaristaFIRE followers aim to save enough to work less (gig work, part-time) in later years and not retire entirely.
“The heart of the FIRE movement is the dream of opting out of the grind,” says Shannon. “That’s what it’s offering.” But she cautions that the dream—at least the ultimate goal of retirement in its classic form—is unrealistic for many. “If you have a family, if you’ve got kids, it really gets complicated.”
“The word retirement is in desperate need of a makeover,” says Julien, “and should incorporate a much wider range of lifestyles where people can retire from ‘required work’ and move along a spectrum of preferable work-life balance.”
There are a few things to consider as we hope to reframe the conversation around retirement. First, retiring at 65 is less realistic than it was for generations past. And secondly, retirement and work are not mutually exclusive.
In our research, we found that those pursuing FIRE were more likely to find work enjoyable and say that work gives their life purpose. 61% of this group reported being satisfied with their careers (versus 40% among the non-FIRE set) and 51% said they’d work even if they didn’t need the money.
I’m finding that the semi-retirement phase is much longer. Maybe it starts at 55, but it goes until you’re 70.
Shannon Lee Simmons, The New School of Finance
In the 13 years that Shannon has been helping clients, her approach to planning their financial futures has shifted. The inception of the gig economy, an increase in side hustles, and clients getting laid off in their 50s changed the retirement landscape. Rather than a hard stop, Shannon works with clients to phase out of the 9-to-5 machine. “I’m finding that the semi-retirement phase is much longer,” she says. “Maybe it starts at 55, but it goes until you’re 70.”
Nick rejects the traditional vision of retirement. “I don’t think that sitting around and drinking mai tais on the beach is good for us,” he says. “I believe that humans have this innate desire to create and need to be productive in order to be fulfilled.” He believes in retiring to something—a hobby, other interests, part-time work.
Ultimately, you need to define retirement for yourself. For the FIRE pursuers in our research, 68% consider retirement to be a “prosperous” time (versus 30% among those not pursuing FIRE),meaning that foregoing income altogether isn’t part of the plan. For this group, work is enjoyable—and even relaxing. Suddenly, the lines between work and retirement have become blurred.
3 (realistic) financial lessons from the FIRE movement
The divisiveness around the FIRE movement is a result of the media attention that tends to surface the most sensational examples. Extreme frugality is fodder for great content but ignores that there are those living extremely frugally because they have to. And for the rest, giving up all creature comforts even in the short term might not be appealing. But there’s no reason to go all in if it’s unsustainable for your lifestyle—you’ll end up burnt out, which is far from the take-it-easy promise of the movement. “Just focus on improving your personal financial situation a little bit at a time,” says Nick. “1% every day.”
FIRE gets people being critical of their own spending and looking at ways to diversify their income stream, which are very good pillars of financial planning.
Shannon Lee Simmons, The New School of Finance
“FIRE gets people being critical of their own spending and looking at ways to diversify their income stream,” Shannon says, “which are very good pillars of financial planning.” When clients approach her about FIRE, she works to apply the best elements of the movement to their specific situations. She’s even coined the term “FIRE Light.”
Let’s examine the three paths to FIRE—frugal living and saving, investing, and increasing income—and discuss ways for the average person to incorporate them into their lives.
1. Spend less than you make 💰
This is a fairly basic concept, but can be challenging for many whose lifestyle expectations don’t match their realities. Or for low-income folks who see their cost of living rise and no opportunities to better their situation. “You can’t out-save a low income,” says Nick.
Nick believes that most of us can benefit from a budget, though. “I do believe that people can decrease their spending and actually not decrease their quality of life,” he says, “by just being more conscious about how they’re actually spending their money and thinking through their purchases.”
Budgets might not be for everyone, though. That’s something Shannon recognized when she wrote her book Worry-Free Money. The book offers a simple way to break out after-tax income into four categories: fixed expenses (like rent, utilities, and transit), meaningful savings (like debt repayment or saving for a house downpayment), short-term savings (like vacation or car repairs), and spending money (everything else). It’s a budget-free way to understand what you have left every month after expenses and savings.
During the height of our RVing, we were paying $350 to $400 a month for our internet setup.
Nick True, Mapped Out Money
However you decide to look at your financial picture, the point is that in order to get a handle on it, you have to actually look at it. Shannon’s book also helps people see that “feeling broke” and “being broke” are not the same—facing your finances might actually reveal that things are better than they appear. A financial planner can help you create a plan that you’ll stick with.
If you decide to embrace frugal living in order to decrease your expenses, beware of the “Instagram pitfalls.” While Nick and his wife decided to live and work from an RV on the road, they did so more for the adventure than the savings. In reality, this lifestyle can actually be costly—unexpected repairs, gas, and campground fees may still cost you as much as monthly rent. “During the height of our RVing, we were paying $350 to $400 a month for our internet setup,” he says.
2. Invest in your future 📈
When we say “invest” here, we don’t necessarily mean you should run out and buy shares. DIY trading is not for everyone and can be risky. Investing in your future could simply mean finding space in your budget to sock away a little of your income every month into retirement savings.
If there’s nothing left after bills every month, “investing” can also apply to activities that can set you up to earn more in the future. Invest in your future self by adding to your skills. These can then be used to earn extra income through consulting or a side project. “You can learn skills on the internet by watching YouTube,” says Nick. “Things like digital marketing and running ads, putting together software tools, building out email marketing campaigns or landing pages. This is how I got started.”
Lastly, invest in your financial literacy. Depending on your means, that could be either hiring a financial planner, reading personal finance books, or researching online. It’s like self-care for your bank account. You may be leaving money on the table if you are unaware of investment tools and budgeting strategies that can improve your chance for financial success.
3. Diversify your income 📦
Here’s where we’re going to lean in. This is the one takeaway from the FIRE movement that is the most universally accessible. Maybe you can’t save, maybe you’re unable to invest. Increasing your income can help you widen your savings gap and open your opportunities to invest in your future.
If the pandemic taught us anything, it’s that relying on a single source of income is risky. Many who lost employment over the past year turned to other sources for income: gig work, freelancing, part-time work, and even starting a small business. In the aftermath of the pandemic, we predict that this diversification of income is here to stay.
What matters is that we should be promoting healthy financial habits for people and the idea of trying to improve in life your financial situation, however you can.
Nick True, Mapped Out Money
As Nick suggests, adding to your skills doesn’t require racking up student debt. You can gain marketable skills in your spare time through self-directed learning online.
Decentralizing your income is also a stepping stone to a semi-retired or more independent lifestyle. For example, if you start an online business on the side to help contribute to savings, you may eventually be able to phase out of a full-time job in a fixed location, removing the need to live downtown in an expensive city. You can then reduce your living expenses by moving to a cheaper location because your work is no longer dependent on a physical place. Your side gig now becomes your main source of income, supporting a more flexible lifestyle—or your own definition of retirement.
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In the end, FIRE can be approached more as a set of loose guidelines rather than a hardcore way of life. “What matters is that we should be promoting healthy financial habits for people,” says Nick, “and the idea of trying to improve your financial situation, however you can.”
Entrepreneurship and FIRE: diversifying your income
We want to spend a little more time on the third lesson. Diversifying or decentralizing your income is the most straightforward way to accomplish the other two goals: increasing income to have more for saving and investing. It also allows you to craft a working life that is more self-directed and flexible.
Entrepreneurship is a great gateway to the FIRE dream. In fact, many of those actively pursuing the method have used entrepreneurship to help them achieve their goals. In our research we found that 35% of FIRE devotees currently own a business and 62% have owned a business at some point. The profile of the typical FIRE pursuer overlaps with many entrepreneur traits: driven, self-sufficient, goal oriented, and open to risk.
There is no expectation that we might just be pulling the plug at 65 and then sitting in Florida.
Shannon Lee Simmons, New School of Finance
Let’s return to the concept of retirement for a minute. Remember I said that we’re living longer and things are more expensive? The reality is that many of us simply can’t hard stop at 65, let alone much earlier. “There is no expectation that we might just be pulling the plug at 65 and then sitting in Florida,” says Shannon. “I think we’re looking at ways in our 30s and 40s that we can just not grind as hard for as long, so that when we want to slow down we have that flexibility to do so.”
If the reality is, if work and retirement will likely blend together for many years, we can still achieve the essence of FIRE by finding work that is meaningful, flexible, and enjoyable. Entrepreneurship is hands down the best way to own your freedom and financial future.
Starting a business on the side to help increase your income can involve as little or as much effort as you’re willing to put in. Consider pursuing a business idea that you not only enjoy but also one that affords you your dream lifestyle once you’re able to let go of your full-time job. In Nick’s circles, he’s witnessing those considered “retired” actually working 40 hours a week creating content online or writing books. The distinction is that it’s work on their own terms.
5 business ideas inspired by FIRE
We’re not going to pretend that adding more to your plate is going to be easy. “There’s no such thing as passive income,” says Shannon. Whatever you do to increase your income will require time and energy—two things in short supply if you’re already working full time and raising a family.
But if you’ve made it this far, you have enough interest in pursuing some version of FI or FIRE to understand that a little short term sacrifice may be needed to reach your goals. So what side gig is best for you? Ask: What do you love? What are you good at? And, what do you have the time and resources for? Here are a few business ideas to get you started:
1. Content creation
Many in the FIRE space, like Kiersten and Julien, have actually found success in documenting (and monetizing through ads or paid content) their path to FIRE and sharing their learnings through content to help others onboard to the movement. But you can also monetize a personal brand by choosing a topic—cooking, houseplant care, makeup tutorials—and creating unique value for that topic’s audience on YouTube, TikTok, or a podcast. Even better? Cultivate a new audience or tap into one that’s underserved.
2. Freelance or gig work
This refers to anything from rideshare driving to walking dogs to doing custom upholstery to offering graphic design services to multiple clients. What skills do you have that are in demand? Create a simple website for yourself and/or offer your services on a site like Fiverr or Upwork. As Nick suggests, you can also learn news skills at no cost on YouTube. “The biggest tip that I would have for anyone who is trying to do something like this is to go niche where possible,” he says. “Not just on the skill or service or product that you offer, but for the customer base that you offer it to.”
📚Learn more: 10 Best Side Hustle Ideas to Turn Into a Business
Most of the clever ideas we’ve seen come from bloggers who are serving specific needs to an audience and community they’ve cultivated.
Julien Saunders, rich & REGULAR
3. Dropshipping business
Dropshipping stores generally require much less upfront investment than other online stores because you don’t need to buy or store inventory. You can quickly spin up a business selling trending products—anything from yogawear to massage guns to coffee beans—without having to deal with handling or shipping any product. You may even be able to white label these items with your own branding.
📚Learn more: The Ultimate Guide to Dropshipping
4. Print-on-demand business
Print on demand is another type of business you can start with little investment and is one that allows you to sell your creativity. Artists and designers can have work printed by a third-party company onto products like mugs, t-shirts, and tote bags. After an initial set-up, products are printed and shipped automatically when a customer places an order. Check out the Shopify App Store for print-on-demand services that plug directly into your Shopify store.
5. Digital products and virtual services
“Most of the clever ideas we’ve seen come from bloggers who are serving specific needs to an audience and community they’ve cultivated,” says Julien. “They primarily fall in the area of courses, coaching programs, and digital products.” Are you a designer or photographer by trade? Sell templates or Lightroom presets. Do you teach yoga? Expand your reach to sell virtual classes online. How can you use your existing skill set to teach, coach, and consult? Or how can you make money from a hobby?
FIRE up your future
Whether or not FIRE—or a modified version of it—is for you, the lessons learned from the movement can help almost anyone improve their outlook and potential to reach a more secure financial future.
Remember, retirement is a state of mind, not necessarily an abrupt end to working life. Succeeding at FIRE means crafting a future that gives you ownership over your time and resources. There isn’t a magic formula or a one-size-fits-all answer—take from the movement what works for you and leave the rest. “We’re not special and there are no secrets to our success,” says Julien. “We’ve simply tapped into the power of time and compound interest.”
Illustrations by Gracia Lam
Additional research by Bianca Johnston
*Research for this article was conducted by Angus Reid from December 18–23, 2020, via an online survey of 2,024 adult respondents in the US.