Story time! Gather round children, gather round. This post covers the F.I.R.E. community’s origins and why it has gained traction among people across the United States and world.

If you have not read any other posts through this site on F.I.R.E yet, a quick breakdown is in order (super quick). The F.I.R.E movement (standing for Financial Independence, Retire Early) is a lifestyle with the purpose of helping people gain financial independence (so they do not have to work any more, or as much) much faster than what is traditionally talked about or focused on by the rest of the general population. Those seeking F.I.R.E are very intentional with their spending (most of the time choosing to live more frugally) and their degree of savings (which is much higher than normal) in order to accumulate investment assets more rapidly and have those investments cover their monthly expenses so work becomes an option instead of a requirement.

F.I.R.E is often criticized for being too aggressive with frugality (by people outside the community), and it is unlikely to be a perfect fit for every person (just like everything in life). But the core of F.I.R.E is not to be a minimalist or to starve your life, it is to gain your freedom faster so you can live the life you want longer than the 10 to 20 years of a traditional retirement. The freedom you gain gives you more time to travel, exercise, spend time with family, read, and expand your life experiences. It really comes down to living the life you want, not the life you are told to have.

This push or drive to be more intentional with your savings and living a life of freedom has been around for a long time. But the F.I.R.E movement has opened the door to a lot more open conversations about this type of lifestyle and financial philosophy. The originating members of the movement did many thing to increase interest in the movement, but the most important pieces they brought to the table were a openness to be transparent with what they were doing and the willingness to find new ways for people to reach their goals faster.

When did this movement start? Well, lets dive into our history lesson and story time.

Many people say that the real “start” of the F.I.R.E movement came with the publishing of the book “Your Money or Your Life“¹ which was written by Vicki Robin back in 1992. This book talked about the pursuit of intentional living, simple living, and showed that it was possible to live (comfortably) on less than the money typically spent by the average American household.

Just a couple years later, a journal study came out that actually was not fully appreciated right away. In October of 1994, in The Journal of Financial Planning ran an article from a gentleman by the name of William P. Bengen. His article was titled “Determining Withdrawal Rates Using Historical Data”. This study gave a detailed examination of what Bengen titled the “SAFEMAX”. This “SAFEMAX” is the worst-case percentage of your investment account that you can withdraw each year and make sure you do not run out of money over a 30-year period of time (which is what a long standard retirement time frame would look like). His article showed that a withdrawal rate of 4% a year (adjusting for inflation after the first year) never had a portfolio run out of money prior to 33 years of withdrawals (with the historical data that he had available at that time).

In 1998, professors at Trinity University did their own study, and they concluded similar findings with what Mr. Bengen had found. After this study, a term was developed know as the 4% rule which has become a very large component of understanding of how much money one would need to safely retire and never look back.

Through the bumpy road of the tech bubble in the early 2000s and the housing crisis in 2008 (and the years surrounding), one nice evolution came to assist in the expansion of knowledge around early retirement, and that was the expansion of the internet. Investors, investment clubs, early retirees and others were able to share their thoughts and information quickly and easily. Communication between individuals who were passionate about helping people with early retirement boomed. Though there were events, studies, journals, books and so on prior to the Internet’s boom, we have to acknowledge how much power this new source of wealth brought to people interested in early retirement, and the rest of the world.

Down the road a little further, another book came out by Jacob Fisker called “Early Retirement Extreme“² back in 2010, and it is also seen as influential for progression of what would ultimately become the F.I.R.E movement. This book, and Fisker’s teachings/philosophy that he had been teaching since around 2004, had a larger focus on the impact of a person’s savings rate (which is discussed significantly in these “Little F.I.R.E” posts). And on the savings rate’s ability to help people retire much faster than the norm. He also argued that many people who were wanting to retire were often not frugal enough in exploring their options to live below their means, which helped expand people’s ideas of how fast they can achieve their goals.

A year later (or less), along comes a gentleman who really kicked off the expansion of the movement as we know it. Peter Adeney, better known as Mr. Money Mustache, created the blog mrmoneymustache.com, and often receives the most notice nationally for his part in the F.I.R.E philosophies. He retired in his 30s, and with his story he was able to gain quite a bit of success through is blog. He calls his approach, “Mustachianism”, where he lived off a lifestyle that was 50% less (expense wise) than most of his peers an invested the rest of the money into broad market index funds (and eventually some real estate, I believe). This “Mustachianism”, though, is not just about gaining wealth and living frugally, it also has a large focus on appreciating what you have and working for fun.

Along with Mr. Money Mustache, many other bloggers such as “Mad Fientist”, JL Collins, and “Go Curry Cracker” brought about awareness of new ways to simplify your journey to financial independence through hacking taxes and other expenses. And the expansion of Podcasts has introduced new ways to spread the news. ChooseFI and Financial Samari, as examples, brought the F.I.R.E movement to a new set of learners who are more auditory in nature.

The F.I.R.E movement is continuing to expand as a newer set of leaders bring it into its next stages. For now, in reading this post, my recommendation would be for you to explore all the teachings listed above. This would not only give you an understanding of the origins and essence of F.I.R.E, but will likely give you the excitement and drive to improve your financial situation and your personal life. Take time to read these books and these blogs, and listen to the podcasts that are out there.

Once you have done so, you can figure out the teachings and philosophies you enjoy most from these pioneers, and figure out who you are in your path to being free.

Enjoy the deeper information in the other posts Midwest Money Mentor provides, and hopefully you enjoyed the short story time.

Also, for something completely unrelated, enjoy a unique picture from the 2024 “Best Science Images”

1. Your Money or Your Life Book ↩︎
2. Early Retirement Extreme Book ↩︎