5-minute read
Hey girlies! Happy New Year 🫣. I hope your year is already off to an amazing start. This year, we’re stepping into our soft life era, and yes, that includes our finances too.
So today, we’re getting into something you’ve probably heard about but maybe never fully understood: The FIRE Movement. And don’t worry, we’re not about to live off ramen and share an apartment with 10 roommates🤪
🔥 What Is FIRE—Really?
FIRE = Financial Independence, Retire Early.
Imagine:
- Traveling when you want ✈️
- Leaving a job that no longer serves you
- Building something of your own
You don’t have to go “all in.” You can focus on the FI (freedom) without the RE (retirement).
💡 How It Actually Works
Most people calculate a “FIRE number” using this formula:
💰 25 × your annual expenses
Example: If you spend $6,000/month, $72,000/year
$72,000 × 25 = $1.8M FIRE number.
That’s the amount you’d need invested to sustain your lifestyle. From there, you can withdraw ~3–4% annually.
🧾 Pick Your FIRE Personality
Not all FIRE journeys are created equal.
💅🏾 Fat FIRE (4% withdrawal)
This requires a high income + aggressive saving and investing but allows you to enjoy financial freedom without major sacrifices.
💰 Invested: $1.8M
💸 Withdraw: $72,000/year (~$6,000/month)
⏳ Designed to last: ~30 years
🧘🏾♀️ Lean FIRE (3% withdrawal – more conservative)
This path requires more minimalism and discipline in retirement but can support a much longer retirement.
💰 Invested: $2.4M
💸 Withdraw: $72,000/year (~$6,000/month)
⏳ Designed to last: ~40–50+ years
☕ Barista FIRE (partial coverage + part-time income)
Work part-time or passion-driven roles while investments cover the rest.
💰 Invested: $1.0M
💸 Withdraw: $40,000/year (~$3,300/month)
➕ Earn: ~$32,000/year from part-time work
⏳ Designed to last: Flexible / potentially indefinite
🪜 How to Start Your FIRE Journey
Let’s break this down step-by-step (you already know how we do).
🧠 Step 1: Know Your Numbers
Figure out:
- Monthly expenses
- Annual spending
- Current savings/investments
You can’t build a plan if you don’t know your baseline.
💰 Step 2: Build Your Foundation First
Before investing aggressively:
- Save 3–6 months’ emergency fund
- Pay off high-interest debt (especially credit cards)
Yes, we’re building wealth, but we’re doing it smart.
🧮 Step 3: Understand the “4% Rule”
👉 You withdraw ~4% of your investments each year
So, if your FIRE number is $1.8M, you can withdraw about $72K/year
BUT, the 4% rule assumes a ~30-year retirement. If you plan to retire for more than 30 years, you may want to be more conservative (3–3.5%).
Also, note that Social Security typically begins around age 62, which can supplement your income later on.
📈 Step 4: Invest Like You Mean It
FIRE doesn’t happen from saving alone—you need your money working for you.
Start with tax-advantaged accounts:
💡 Important: these accounts have withdrawal rules + penalties before 59½.
Then build:
- Brokerage account (key for early retirement)
- Real estate (optional, depending on your strategy)
That’s why a brokerage account matters. You can withdraw from it at any time. Just keep in mind:
- Short-term gains = taxed as income
- Long-term gains = typically 0%, 15%, or 20%
💸 Step 5: Increase Your Savings and Investment Rate
This is where FIRE accelerates.
- Most people: 10–20%
- FIRE-focused: 50%+
Automation makes this easier than you think.
✨ Step 6: Don’t Forget to Live Your Life
This is where people get it wrong.
FIRE is not about being miserable or saying no to everything. Because what’s the point of financial freedom…if you’re unhappy the whole way there?
⚠️ What People Don’t Talk About
Let’s keep it real:
- You’re covering healthcare before 65
- Markets will fluctuate
- Extreme frugality can burn you out
So:
- Plan your lifestyle, not just your exit
- Set realistic numbers
- Choose a version of FIRE that actually fits your life
Balance is everything.
💖 Final Thoughts
FIRE isn’t about quitting your job tomorrow.
It’s about building a life where money doesn’t control your decisions. You can choose rest without fear, and you’re not living paycheck to paycheck forever.
Let me know in the comments:
✨ Would you want to retire early or just have more flexibility?
Until next time,
Your fave finance girlie ✨
Resources:
RichHER Life 
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