I didn’t know that the FIRE movement existed until I started living more frugal and minimally. For those who are new to it, it stands for “Financial Independence, Retire Early”. They have a great purpose going and I hope we are able to jump onboard soon. Right now, my husband and I are focused on the FI part which is “Financial Independence”.
After a year and a half of the “minimally frugal” lifestyle, my husband and I were able to save up 20% of our down payment for our new home. We did this to avoid PMI which is private mortgage insurance. PMI does nothing for you, it only benefits the lender in case you default on your home. I was not okay with paying $300-$500 extra a month for something that was not equity for me. We were also able to do this without risking any of our emergency fund. We actually had an extra $10,000 after closing to spend on new furniture and furnishings for our home. Hard work does pay off!
The other part of the FIRE movement is the Retire Early part in which we are working on. It makes your investments do all the work for you so you can retire early. There’s an equation online with the FIRE movement that you can do to see when you will be eligible for retiring early. What this process consists of is pulling out 3% of your investments each year to live off of so you never have to work a day in your life. People who are part of this movement are retiring as early as 30 years old. What a great encouragement!
Here is the link to the FIRE equation: https://playingwithfire.co/retirementcalculator/
Whether you’re working towards the whole FIRE or just a couple of those letters is still an improvement. I hope financial freedom will give you a more purposeful and meaningful life. We aren’t meant to buy everything on this planet and if we were, we would still be left feeling empty. Read up on my other blog if you are interested in starting the frugal or minimalist lifestyle!
Sincerely,
Melissa Lee