Have you truly reached FIRE?

When I first came across the term FIRE (Financial Independence, Retire Early), my first thought is that it is just a 'hipster' term to describe people achieving financial independence. FIRE seems to be more popular in the western culture and among the younger people. The term financial independence is not something new, but why has it gain popularity after repackaging as it FIRE? The idea that you can just quit your job and travel around the world must be appealing to the younger generation who are caught in the rat race.

The idea of financial independence is not complicated. The goal is to acquire multiple streams of passive income. It could be from dividend, rental or any source of income which requires little or zero effort to generate. Once your passive income exceeds your expenses, you technically have reached financial independence, and you are no longer required to work for money. So how is FIRE different from the traditional financial independence?

From what I found online, FIRE encompasses more than just achieving financial independence alone. It is a philosophy of money management and way of life. FIRE is often associated with leading a minimalistic lifestyle where you try to reduce your expenses, and investing the money you save from it to generate passive income. After which you can then spend your time doing what you like such as traveling around the world or helping those in need. 

The essence of FIRE is about proper money management. I do not think FIRE is the correct term to describe you if you have reached financial independence but you are living your life like the 'Crazy Rich Asians'. What about if you are currently getting an average passive income of around $1000 from dividends per month, and you can live within this amount by leading a freegan lifestyle, would you then be able to attain FIRE immediately? That is probably not FIRE also.

FIRE also emphasizes on reaching your target earlier in your life. This is why reducing your expenses or living within your means will help to achieve your goal of financial independence earlier instead of just trying to increase your passive income. It is equally important to not to compromise on your quality of life to the point which you are no longer happy. Once you attained financial independence, you can then retire early. The Retire Early in FIRE does not really require you to quit your job but rather the focus is to spend time doing what makes you happy. 

So, have you truly reached FIRE or you are just trying to jump on the social media trend?


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