Definition of FIRE

FIRE

What is the definition of the acronym "FIRE" as it applies to the world of personal finance? What does the term "FIRE" mean?

"FIRE", as it pertains to personal finance, stands for "Financial Independence Retire Early".

"FIRE" is a movement of people who have achieved or wish to achieve true financial independence.





True financial independence, in the eyes of many "FIRE" devotees, is having 25 years worth of expenses saved up. At that point, a person can consider themselves truly financially independent.

"FIRE" does not mean that you have necessarily quit your job and retired early. In fact, many people who live the "FIRE" lifestyle still work at jobs, though the key difference is that they are working because they want to work. In many cases, these people love their jobs and don't want to quit.

"FIRE" simply means that you are no longer stuck working a job that you dislike, and that you CHOOSE to work at a job, rather than being forced to.

Some of the key principles of the "FIRE" way of living include:

1) Living below your means
2) Saving aggressively
3) Investing wisely
4) Spending wisely

Living the "FIRE" lifestyle does not necessarily make you frugal - instead, it simply means that you are living below your means and saving towards the achievement of a financially independent life.

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