FIRE
Also called Financial Independence orFinancialIndependence Retire Early
The letters FIRE stand for Financial Independence Retire Early. The term describes the choices made to create financial independence to retire early. The rationale behind the FIRE principle is that a minimum of 50% of income must be invested annually to become independent of work or income. There are those who choose to devote as much as 70% of their income to savings. The extreme savings or investments can be designed through paying off the mortgage on the owner-occupied home to create more financial freedom but also to achieve this goal through investing.
When is financial independence?
Acting on the FIRE principle is a long-term process that must be sustained consistently for years. The financial movement is characterized by frugality, extreme savings and investments. Only then can financial independence be achieved at some point. When this moment is reached will be different for everyone. After all, it depends on the ability to put money aside each year and, of course, on personal wishes in this area. In the Netherlands, it is assumed that having at least 15 times an annual salary will be necessary for financial independence (FIRE).
