The FIRE (Financial Independence Retire Early) movement's popularity has been growing massively in recent years. Its ranks have been boosted by millions of people with the desire to kick their nine-to-five lives. The FIRE movement provides encouragement to millennials, or anyone whose lifestyle may leave something to be desired, to save as fast and hard as they can so they have sufficient funds for their future. 

FIRE is not a new ideal, but it does provide a modern take on several established economic principles from the 20th Century. The most notable of these concepts is the 4% Rule. 

The 4% Rule sets out how a person could fund their retirement at a sustainable withdrawal rate. For instance, if you wanted $40,000 per year to live on, you would need a starting balance of $1,000,000. These figures are based on the assumption the remaining balance would achieve growth at around 7.5% and an inflation assumption of 3%. Therefore, in real terms, growth would be about 4%. 

Drawing down on your retirement funds using the 4% Rule would allow for a virtually limitless retirement. Although this figure has been revised upwards to 4.5% based on more recent research, the principle still holds. 

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Armed with this fundamental principle for your retirement, how can you achieve the balance you need to sustain the lifestyle you want when you retire? Take a look at these ten tips from the FIRE movement:

1. Save More Money

Once you've eliminated your debts, you can save the money you previously paid on interest. FIRE followers tend to be aggressive savers, putting away anything left from their monthly salary after living expenses. 

With the savings they make each month, many influencers in the FIRE movement invest through ETFs, using an online broker to manage their investments. Others choose robo-advisors to invest, which are straightforward to set up without needing any prior knowledge. 

2. Keep Working For a While

Giving up your job and retiring early can have its risks, and this potential hazard is one of the main criticisms of the FIRE movement. Being consistent with the 4% rule, FIRE followers tend to choose to delay their retirement until they've amassed 25 times their annual expenses. As FIRE is reliant on maximizing your income and minimizing your expenses, some followers choose to change jobs rather than quit working entirely once they've achieved financial independence. They may not enjoy their current employment, so contract, freelance, or part-time work can give them a better balance between work and living, while still having an income. 


3. Pay Off Your Debts

Paying off your debts is one of the most significant steps you can take to achieve financial independence and retire early. Paying interest on your debts reduces the amount you can save, so getting rid of this burden is crucial. 

4. Pursue Your Interests and Hobbies 

It is having a better work-life balance that inspires many millennials to follow the FIRE movement. Today's employees put more emphasis on job satisfaction than previous generations of workers. For millennials, they must have stimulating routines outside the work environment. As FIRE is about retiring early, you have more opportunities for your hobbies and interests when you've stopped work.

5. Be Thrifty

All FIRE followers are thrifty, but some more so than others. ‘LeanFIRE' followers are minimalists, eliminating any unnecessary spending. ‘FatFIRE' followers tend to treat themselves a little more to the odd social event, travel, or luxury spending here and there. Balance is crucial, as any unnecessary spending detracts from your savings potential. 

6. Focus on Quality

A lot of FIRE followers would rather spend a bit more for a quality item that lasts rather than a cheaper one that will need replacement sooner. They see buying based on quality rather than quantity as being an investment that saves them money in the long run.


7. Create a Budget

Budgeting is essential to get a grip on your spending, and the best exponents of FIRE will budget every cent. All their spending is categorized through a budgeting app such as Hardbacon or an old fashion spreadsheet, and if they need to make larger purchases, they try to buy used or discounted items. 


8. Ditch Your Car

Cars sit on the liability side of your personal balance sheet. Paying for fuel, insurance, pink slips, servicing, and so on can cost you something in the region of $5,000-$10,000 a year, even for a small to a medium-sized car. 

FIRE followers tend to walk, cycle, or get the occasional cab to get around. Ditching the car allows you to save money and have a healthier, more environmentally-friendly alternative for getting around. 


9. Invest For The Long-Term

Short-term investments promising quick profits might be fun to dabble in but generally don't return what you've anticipated. FIRE is about investing long-term through an online broker or a robo-advisor, as it removes much of the risk of market fluctuations and gives you much more chance of seeing your money grow. 


10. Emigrate to Somewhere Cheaper

People don't merely spend their retirement years in a tropical paradise because of the sun, sea, and sand. Much of the appeal comes from the lower cost of living. This fact is not lost on FIRE followers, and many seek out cheaper locations to spend their retirements, with Thailand, Costa Rica and the Philippines being popular choices. 

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