What is the FIRE Movement?
Over the past few years, the FIRE movement has gained lots of momentum online. I used to think it was ubiquitous, with people practicing extreme frugality and never spending money on coffee from a coffee shop - this isn’t the case.
FIRE stands for “Financial Independence, Retire Early”. Many people who participate in FIRE stress that it’s less about deprivation than it is about buying back your time.
The seed that started FIRE was first introduced in 1992 by Vicki Robin and Joe Dominguez in their book “Your Money, Your Life”. The book reframes money as your finite “life energy,” so every purchase you make is really a trade of hours/minutes of your life.
The book didn’t go mainstream until the early 2000s, when blogs like Early Retirement Extreme and Financial Samurai began popularizing it. Mr. Money Moustache is also largely credited with popularizing the movement when pairing it with a Trinity Study on the 4% rule.
A growing, more attainable version of FIRE is Coast FIRE. This is the idea that you stop optimizing for ‘never work again’ and start optimizing for ‘never have to save again’ (although many continue to save once they hit Coast FIRE).
Coast FIRE | Full FIRE | |
What it means | Enough invested that no further contributions are needed to hit your number by retirement age | Enough invested to cover 100% of spending, indefinitely, starting now |
Still need income? | Yes, to cover current living expenses | No, investments alone cover spending |
When it's reached | Can happen decades before traditional retirement age | Typically the "finish line" itself |
Main lever | Time + compounding | Total portfolio size |
Flexibility unlocked | Freedom to change jobs, take lower-paying/more meaningful work, take breaks | Freedom to stop working entirely |
Hitting Coast FIRE can dramatically change your relationship with work, even if you don’t quit. It makes job changes lower stakes, opens you up to sabbaticals, and makes it easier to take career risks, like starting a company or acquiring a business.
The formula: Coast Number (at age X) = Retirement Target $ / (1 + r)^(Retirement Age - age X)
The retirement target via the 4% rule is estimated as your annual spending * 25.
The assumed return rate (r) is usually 7%, which is a common historical baseline for stock market performance.
Time horizon (Retirement Age - age X) is the number of years from age X to retirement age.
Say you're 30 years old and spend the U.S. average of $78,535/year, and plan to retire at 65 with a 7% average real return (accounts for inflation).
Step 1: Find the retirement target (4% rule):
$78,535 × 25 = $1,963,375
Step 2: Find the time horizon:
65 − 30 = 35 years for the money to compound
Step 3: Discount back to today:
$1,963,375 ÷ (1.07)^35 = $1,963,375 ÷ 10.68 ≈ $183,893
The best way to get here is to invest aggressively when you’re in your 20s and 30s and to automate contributions + purchases in your investing accounts. The goal here is to get to a large lump sum and to revisit annually as market swings will move your Coast FIRE Amount up and down.
Some common pitfalls to avoid are treating ‘coasting’ as a hard finish line with no margin (sequence of return risk). It’s still necessary to make enough money to pay for your cost of living and to keep lifestyle inflation under control. Also remember 7% is just an avg. and is not guaranteed.
You can use the formula here to calculate a rough estimate of a Coast FIRE number: Coast Number (at age X) = Retirement Target $ / (1 + r)^(Retirement Age - age X)
If you learned something, consider checking out my YouTube channel! We cover many of the same concepts but in video format.
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