What is the FIRE Movement?
FIRE stands for Financial Independence, Retire Early. It's a lifestyle movement whose goal is to accumulate enough income-generating assets to cover living expenses, thereby making traditional work optional long before the conventional retirement age.
The Core Principle: A High Savings Rate
The central tenet of the FIRE movement is an extremely high savings rate, often 50% or more of one's after-tax income. By saving aggressively, followers of FIRE can dramatically shorten the time it takes to build a portfolio large enough to live off of.
How to Achieve FIRE: The Steps
- Calculate Your "FI Number": This is the amount of money you need to be financially independent. A common way to calculate this is to multiply your desired annual spending by 25, based on the 4% safe withdrawal rate. For example, if you want to live on $50,000 per year, your FI Number is $1.25 million ($50,000 x 25).
- Drastically Increase Your Income: Many FIRE adherents focus on growing their careers or starting side hustles to maximize the amount of money they can save.
- Aggressively Reduce Your Expenses: This involves living frugally, optimizing spending on the "big three" (housing, transportation, and food), and avoiding lifestyle inflation as income grows.
- Invest the Difference: The large surplus is invested, typically in low-cost, broad-market index funds, to allow the power of compound interest to work its magic.
The Moneko Tie-in: Your Essential Tool for the FIRE Journey
For anyone pursuing financial independence, net worth is the single most important metric. It is your ultimate scorecard. The FIRE journey is a long-term project of growing your assets until they can support you indefinitely.
This is where a tool like Moneko becomes essential. By providing a clear, real-time view of your total net worth, Moneko allows you to:
- Track Your Progress: See exactly how close you are to your FI Number.
- Stay Motivated: Visualize your net worth growing month by month as a direct result of your saving and investing efforts.
- Make Informed Decisions: Understand how every financial choice impacts your timeline to financial independence.
Moneko isn't just an app; it's a dashboard for your entire FIRE journey.