Understanding Financial Independence, Retire Early (FIRE)

Brought to light from the 1992 book Your Money or Your Life by Vicki Robin and Joe Dominquez, the Financial Independence, Retire Early (FIRE) community was born as a movement that analyzes spending in terms of working hours as the ‘payment.’ For example, if your hourly pay is $12, a tube of toothpaste at $4 is 20 minutes of work. Being founded on the extreme frugality of spending, the movement is heavy on saving and investing, too.

With their dedication to saving and investing, FIRE followers aim to retire decades before 65. Those within the community typically work to save, invest that money, and when their assets are about their 25-30 times their projected annual expenses, will retire fully in their 30s or 40s. Some may work part-time. To maintain their desired lifestyle, FIRE folks will withdraw 3-4%. There have been various FIRE perspectives come to life since its rise in 1992 depending on lifestyle needs. The core three are as following:

  • Fat FIRE – This style takes aggressive savings and investment strategies and is more suitable for those with larger incomes than the average worker. Oftentimes this is the FIRE lifestyle for someone who does not want to reduce their standard of living.
  • Lean FIRE – With extreme saving and investing methods and a minimalistic lifestyle, the restricted living often has these folks living on $30,000 or less a year.
  • Barista FIRE – As the mid-grounds for Fat and Lean, folks here typically quit their traditional full-time jobs and use a combo of minimalistic living with freelance or part-time work. This is typically to maintain health benefits, support themselves, and not touch their retirement funds.  

More to FIRE than Meets the Eye:

FIRE does not mean entirely quitting work nor does just apply to retiring early. There are many accessible elements that could be applied to your retirement planning and financial health. Planning for your future is the core of the FIRE community. It is about getting better with your money—be it better saving, methodical investing, or intentional spending:

  1. Planning – In 2021, a study showed 25% of Americans did not have a retirement savings at all. Of those, almost 40% felt they would never get on track to have the retirement they want. FIRE emphasizes the importance of planning and saving.
  2. Discipline – To achieve what your plan entails there is a great amount of discipline involved. FIRE is about maximizing your income and minimizing your overall expenses. Setting a budget, strictly sticking to it, creating income streams now and saving.
  3. Invest wisely – Ideally, taking a certain percentage of your monthly income to invest is the idea of FIRE. The money adds up over time and grows. Strategies under FIRE are a little more extreme, encouraging to sometimes invest large amounts than the typical working person.

For further information on FIRE and much more, listen to our podcast episode “F.I.R.E., Side Hustles, and Retirement with the Financial Panther” of The Retirement Risk Show.


Best Part-Time Jobs for Retirees

Retirement is whatever you want to make it! Which means you may want to continue working and bringing some extra income in. Working part-time keeps that income stream, keeps a routine, keeps you active, and can be fun all at the same time!

A part-time retirement gig, much like your retirement, can be whatever you want it to be. Considering your options is the best place to start. Not sure what to consider? Here are some of the best part-time jobs for retirees.

Continue with what you were doing before retirement. Much like semi-retirement, phase out of your career by staying on part-time. You stay doing what you knew for much of your working years and helps secure your retirement. Moreover, this does not mean you have to stay or return to your previous employer. You could offer freelance services or become a consultant!

Turn a hobby/skill into a class. During your working years you have mastered and obtained a lot of skills. Offer classes or workshops to teach others these! If you sew or woodwork or play an instrument, you can always teach these, too. There are many adults and even children who would become great students! This could be done on a group or individual basis.

Ever consider passive income? This may appeal if you desire an income stream that is easy to maintain and does not require too much extra work. Rent a room out of your house on Airbnb or invest in real estate.

Become a pet sitter or walker! While their family is on vacation or at work, pets could stay with you. Boarding at your home or even just a daily pet daycare could convert your love for furry family members into an income stream. If hosting pets is not something you want to do, but want to stay active, consider becoming a walker. Midday or evening walks for a pup especially will keep you moving and will create income while helping to exercise a pet.

Retail, retail, retail. Is there a bookstore or boutique you frequent? Typically, retail settings offer decent pay, a set schedule, and you get to turn something you enjoy into income.

Another gig you can consider is substitute teaching. While requirements vary state to state, subbing offers flexibility and pay. Plus helping children and teenagers learn can be a very rewarding job!

Turn a social activity into income! Working as event staff at the local theatre or concert hall is a great way to create that income and enjoy plays and concerts. Even as part-time, you may be offered staff discounts for certain events!

Travel and work! Traveling during retirement is oftentimes a top priority. So why not take trips and make money, too? Cruises are always looking to hire folks, and it may lead to a fun time! You could teach classes on the boat or work in the gift shop.