Learning
What exactly is the FIRE movement?
Learning
What exactly is the FIRE movement?
.jpg)
This article is for general information purposes and not financial advice or recommendation to take any action.
FIRE stands for: Financial Independence, Retire Early.
It's a movement built around a simple idea: save aggressively, invest intentionally, and achieve freedom from work years (or even decades) ahead of the traditional retirement age.
It's a mindset change that’s reshaping how people think about money, their purpose, and their security.
The FIRE movement
At its core, FIRE is about reaching a point where your investments generate enough passive income to cover your lifestyle.
This gives you the freedom to stop working, change careers, or take back some time.
There are a few variations of how far you can take this:
- Lean FIRE - living on a minimal budget to retire earlier
- Barista FIRE - reaching partial independence and supplementing income with flexible or part-time work
- Fat FIRE - achieving financial independence while maintaining a higher standard of living
The biggest misconception about FIRE is that it's about stopping work altogether.
In reality, it's about freedom of choice. It is a compelling framework to invest more now to gain your freedom back, over time.
FIRE adopters work with two key metrics:
They calculate their FIRE number
This is an estimate of how much how much money you'll need, to reach a comfortable early retirement.
FIRE adopters calcuate their expected annual expense, and multiply it by somewhere between 25-30x
They then do everything possible to move towards their FIRE number (goal).
This in itself promotes excellent savings habits.
They then stick to 'the 4% rule'
The 4% rule refers to the idea that, once this money is saved, you should aim to withdraw 4% of your savings per year during retirement.
At this rate, most retirees can keep up with their current quality of life while stretching their retirement over a 30-year period.
Great, but how do I save for my FIRE goal?
Your FIRE goal may seem daunting, but with a plan and discipline, it will happen faster than you think.
FIRE adopters use three core principals to get there as fast as possible:
Relentlessly drive low expenses
Adopters don't spend money on fancy dinners, flashy cars, vanity items, or the like.
They constantly work out how reduce every cost, down to the last cent - they buy food in bulk, optimise their rent situation, take advantage of energy, mobile, and flight discounts, etc.
Save 40-70% of income
By driving expenses lower FIRE adopters aim to save 40-70% of their income.
Then they make sure their savings are working for them around the clock.
Putting savings to work
FIRE adopters target stable growth on their savings over the long term.
They generally steer clear of investing in speculative or volatile asset classes, and seek a stable return of 6.00% p.a or higher.
They may allocate their savings to index funds, carefully chosen property they can add value to (not as easy as it used to be), or increasingly products like Earnr's range of accounts paying up to 7.20% p.a (at the time of writing).
This means, their savings...are making them more savings.
Compounding and disciplined decision-making do the heavy lifting and they get to their FIRE number much faster.
Fully or partially retiring in your 30s is possible - here's an example
John is 20 and about to start his first full time job.
By adopting the FIRE movement now - he could partially or fully retire at 35! Whether he fully or partially retires is dependent on the lifestyle he wants to lead.
But it's not too late to start if you're in your 30s, 40s, or even your 50s:
If John was 30, it is foreseeable he could retire at 45 or even earlier, as he'd most likely be earning a higher income.
If John was 40, it is foreseeable he could retire at 50-55 due to the likelihood he's in his highest income earning years.
Let's look at the assumptions to see how 20 year old John could retire at 35:
- John's FIRE goal is $1,375,000: calculated as $55,000 annual expense x25
- His starting income is $100,000 increasing by $10,000 annually up to a maximum salary of $250,000 per year
- His annual savings are his after tax income minus expenses of $55,000
- His starting savings are $8,000
- He targets a 7.20% p.a return using Earnr's 12 Month Term Accounts
John surpasses his FIRE goal in the 15th year - moving past his FIRE goal, hitting $1,495,051 of savings by the end of year 15 (not including his superannuation balance).
According to the FIRE principals and the above assumptions, John can fully or partially retire when he is 35.
For full workings and assumptions - feel free to reach out to Earnr Support.
How Earnr can help FIRE adopters
We've noticed an increasing number of FIRE adopters using Earnr Accounts to help them reach their goals - we initially wrote this article as an internal memo to educate ourselves after hearing from our customers!
FIRE adopters love Earnr Accounts, because they pay equity like returns up to 7.20% p.a (at the time of writing), but unlike index funds and equities - Earnr Accounts are backed by Institutional Australian Bank Deposits and Secured Australian Property.
Adopters like that Earnr Accounts are higher earning, low risk accounts built by bankers, with no historical volatility.
FIRE adopters need to make every dollar work safely.
Earnr's products:
- Provide stable, predictable cash flow
- Provide great rates which often match those received from higher risk equity investments
- Reduce portfolio volatility
- Preserve capital while still earning defined yields.
For those pursuing Fat FIRE or building a bridge to full retirement, Earnr could bring much-needed stability without sacrificing growth.
The information in this article is intended to be factual though may also contain the opinion of the author. Whilst every effort has been made to ensure accuracy, we take no responsibility for any errors or omissions. Any opinions are those of the author alone and not a recommendation to take any action or obtain any product. You should consider whether this information is appropriate for you and obtain independent advice before making any decisions.
.jpg)
Published
13 May 2025
This article is for general information purposes and not financial advice or recommendation to take any action.
FIRE stands for: Financial Independence, Retire Early.
It's a movement built around a simple idea: save aggressively, invest intentionally, and achieve freedom from work years (or even decades) ahead of the traditional retirement age.
It's a mindset change that’s reshaping how people think about money, their purpose, and their security.
The FIRE movement
At its core, FIRE is about reaching a point where your investments generate enough passive income to cover your lifestyle.
This gives you the freedom to stop working, change careers, or take back some time.
There are a few variations of how far you can take this:
- Lean FIRE - living on a minimal budget to retire earlier
- Barista FIRE - reaching partial independence and supplementing income with flexible or part-time work
- Fat FIRE - achieving financial independence while maintaining a higher standard of living
The biggest misconception about FIRE is that it's about stopping work altogether.
In reality, it's about freedom of choice. It is a compelling framework to invest more now to gain your freedom back, over time.
FIRE adopters work with two key metrics:
They calculate their FIRE number
This is an estimate of how much how much money you'll need, to reach a comfortable early retirement.
FIRE adopters calcuate their expected annual expense, and multiply it by somewhere between 25-30x
They then do everything possible to move towards their FIRE number (goal).
This in itself promotes excellent savings habits.
They then stick to 'the 4% rule'
The 4% rule refers to the idea that, once this money is saved, you should aim to withdraw 4% of your savings per year during retirement.
At this rate, most retirees can keep up with their current quality of life while stretching their retirement over a 30-year period.
Great, but how do I save for my FIRE goal?
Your FIRE goal may seem daunting, but with a plan and discipline, it will happen faster than you think.
FIRE adopters use three core principals to get there as fast as possible:
Relentlessly drive low expenses
Adopters don't spend money on fancy dinners, flashy cars, vanity items, or the like.
They constantly work out how reduce every cost, down to the last cent - they buy food in bulk, optimise their rent situation, take advantage of energy, mobile, and flight discounts, etc.
Save 40-70% of income
By driving expenses lower FIRE adopters aim to save 40-70% of their income.
Then they make sure their savings are working for them around the clock.
Putting savings to work
FIRE adopters target stable growth on their savings over the long term.
They generally steer clear of investing in speculative or volatile asset classes, and seek a stable return of 6.00% p.a or higher.
They may allocate their savings to index funds, carefully chosen property they can add value to (not as easy as it used to be), or increasingly products like Earnr's range of accounts paying up to 7.20% p.a (at the time of writing).
This means, their savings...are making them more savings.
Compounding and disciplined decision-making do the heavy lifting and they get to their FIRE number much faster.
Fully or partially retiring in your 30s is possible - here's an example
John is 20 and about to start his first full time job.
By adopting the FIRE movement now - he could partially or fully retire at 35! Whether he fully or partially retires is dependent on the lifestyle he wants to lead.
But it's not too late to start if you're in your 30s, 40s, or even your 50s:
If John was 30, it is foreseeable he could retire at 45 or even earlier, as he'd most likely be earning a higher income.
If John was 40, it is foreseeable he could retire at 50-55 due to the likelihood he's in his highest income earning years.
Let's look at the assumptions to see how 20 year old John could retire at 35:
- John's FIRE goal is $1,375,000: calculated as $55,000 annual expense x25
- His starting income is $100,000 increasing by $10,000 annually up to a maximum salary of $250,000 per year
- His annual savings are his after tax income minus expenses of $55,000
- His starting savings are $8,000
- He targets a 7.20% p.a return using Earnr's 12 Month Term Accounts
John surpasses his FIRE goal in the 15th year - moving past his FIRE goal, hitting $1,495,051 of savings by the end of year 15 (not including his superannuation balance).
According to the FIRE principals and the above assumptions, John can fully or partially retire when he is 35.
For full workings and assumptions - feel free to reach out to Earnr Support.
How Earnr can help FIRE adopters
We've noticed an increasing number of FIRE adopters using Earnr Accounts to help them reach their goals - we initially wrote this article as an internal memo to educate ourselves after hearing from our customers!
FIRE adopters love Earnr Accounts, because they pay equity like returns up to 7.20% p.a (at the time of writing), but unlike index funds and equities - Earnr Accounts are backed by Institutional Australian Bank Deposits and Secured Australian Property.
Adopters like that Earnr Accounts are higher earning, low risk accounts built by bankers, with no historical volatility.
FIRE adopters need to make every dollar work safely.
Earnr's products:
- Provide stable, predictable cash flow
- Provide great rates which often match those received from higher risk equity investments
- Reduce portfolio volatility
- Preserve capital while still earning defined yields.
For those pursuing Fat FIRE or building a bridge to full retirement, Earnr could bring much-needed stability without sacrificing growth.
The information in this article is intended to be factual though may also contain the opinion of the author. Whilst every effort has been made to ensure accuracy, we take no responsibility for any errors or omissions. Any opinions are those of the author alone and not a recommendation to take any action or obtain any product. You should consider whether this information is appropriate for you and obtain independent advice before making any decisions.
Download the Earnr app and optimise your savings today.
Open your account in minutes through the Earnr app.
