Bitcoin Is On FIRE – Bitcoin Magazine: Bitcoin News, Articles, Charts, and Guides


What is FIRE?

Financial Independence, Retire Early (FIRE) is a movement focused on extreme savings and investment with the aim of allowing people to retire much earlier than conventional strategies target.

Extreme frugality is at the core of FIRE. Proponents aim to save significant amounts of their income — well over 50% in many cases. This is typically achieved through a disciplined focus on reducing expenses. Increasing income is encouraged, but acknowledged as less controllable than ruthlessly cutting spending.

Once their savings goal is achieved, retirees live off small periodic withdrawals. Most would apply the “4% rule” or something similar in order to calculate their savings goal and safe withdrawal amounts. Savings are typically invested almost entirely in equity index funds.

There is a huge amount of information available on FIRE that isn’t worth repeating here. You can do your own research, perhaps starting with one of the most popular FIRE bloggers – Mr. Money Moustache.

The Good: FIRE And Freedom

The FIRE movement has a lot going for it. Its biggest strengths stem from the low time preference behavior it encourages, much like bitcoin. FIRE proponents are willing to sacrifice immediate expenditure and make lifestyle compromises for the potential of increased future returns (by compounding savings) that will later enable a lifestyle of freedom. FIRE’s extreme frugality pairs well with minimalism and there is a degree of overlap between these movements. A common thread is the desire for freedom in its many forms — again something familiar to many bitcoiners. A minimalist lifestyle and mentality can provide a psychological sense of freedom well before retirement is achieved. Your possessions stop owning you and you can focus on the things you value most, even if you haven’t yet won complete control over your time.

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