Are you familiar with the FIRE Method?
FIRE stands for financial independence, retire early.
It’s a concept that’s been gaining increasing popularity over the recent years. The idea is simple: save and invest aggressively, live modestly, and retire in your 30s or 40s – well before 65.
That sounds great, right?
Sure does! But as with any financial strategy, there are some things you should know before trying it out yourself.
Understanding the FIRE Method
At its core, the FIRE method is about maximizing savings and investments to achieve financial independence early in life.
How do they aim to accomplish this?
This approach encourages people to save between 50–75% of their income and invest in low-cost index funds or other reliable investment vehicles.
The goal is to save enough and build enough assets that generate enough income to cover your living expenses and completely replace the money you get from your job.
This would allow you to retire way before the typical age of 65.
The Variations of FIRE
Just like in real estate, there are a few different avenues you can go down with FIRE:
- Traditional FIRE: The standard approach, where you live like a pauper to save a large portion of your income for early retirement.
- Fat FIRE: Requires a higher savings rate or income to enjoy a more comfortable lifestyle in retirement.
- Lean FIRE: Involves living extremely sparingly, both before and after retirement, to make the savings last.
- Barista FIRE: Partial retirement, where individuals leave their full-time jobs but still work part-time to cover some expenses and maintain benefits like health insurance.
They might seem different, but the same theme runs through all of them:
Live small and save big while you’re working so you can live small in retirement.
The Challenges of the FIRE Method
The FIRE method has drawbacks. It requires a high income to realistically save the needed percentage of one's earnings, and living frugally can mean sacrificing current pleasures for future security.
When I say save a percentage of your earnings, I mean 50–75% of your income.
That means if you’re making $100K, you’d be living off somewhere between $25K and $50K each year.
And that number will remain roughly the same even into retirement.
The average American will not be able to save enough money to be able to live off. Americans only save $200K by 65.
Plus, the risk of market volatility and unforeseen expenses can impact the feasibility of retiring early.
A Different Perspective: Real Estate Investing
A better option might be through real estate investing.
It offers both passive income and capital appreciation, and if you know how to invest your money properly, you can retire in 1–3 years.
For example, investing in apartment buildings can generate rental income, provide tax advantages, and grow equity over time.
While the FIRE method offers a structured path to early retirement, it's not the only way to achieve financial freedom.
I don’t even think it’s the best way to retire.
Who wants to live like a pauper just to do the same thing in retirement? Not me!
I’ve got the perfect free resource for you if you want to ditch FIRE and other methods that require you to make massive lifestyle sacrifices and instead turn to real estate investing …
The best (and much faster) strategy for retiring early, in as little as one year.
That resource is Apartments 101 – the apartment investing crash course that’ll walk you through everything you need to know so you can decide for yourself if apartments are right for you (which I’m betting they are).
Enroll now and go through it at your own pace.
Click the link below to get started.
https://apartments101.co/start
What do you think about the FIRE method? Let us know in the comment section!
