Financial independence retire early (FIRE)

FIRE is an abbreviation of Financial independence retire early. The movement revolves around saving enough to be able to retire early and live off the savings and returns.

The norm today is that you work until 65 years old, many work even longer. That is around when you’ll be able to collect your pension. The goal of FIRE however, is to retire much earlier. The way there is saving, a lot. By working, living on a tight budget and saving more than half of your income, FIRE is possible.

Despite the name being about retirement, many aim for just working less. FIRE is more or less about gaining enough financial comfort to not feel forced to work.

How much do I need to save to retire early?

The size of your savings depends on what lifestyle you plan on living when you retire. If you have expenses of 20 000 sek per month, you need to save 240 000 sek to last a year. For 20 years the amount is 4 800 000 sek. Don’t forget  that you can start to collect your “regular” pension around the year you turn 65.

Be smart with your returns

Just like all long term savings, the type of savings matter a lot on the increase in value. Higher risk may reward you, but there is always a chance of your savings losing money. Always do your research before investing, and be aware of the risk.

Discipline and planing

FIRE is one of the biggest saving goals you gen aim for. Even bigger than retirement savings, since FIRE requires more over less time. But it is possible. Except for the discipline of living frugally, it requires a plan and a realistic, strict, budget.

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