Financial independence: What is FIRE and how can you achieve it?

livemint.com:

movement are unknown, a book ‘Your Money or Your Life’ written by Vicki Robin and Joe Dominguez in 1992 popularised some of the concepts of FIRE. A deep aspiration to retire early and become financially independent is not uncommon in the corporate world these days since the knowledge workers are made to slog round-the-clock for their daily bread.

“Become financially independent at a young age can help you really discover and follow your true passion," says Akshar Shah, Founder, Fixed Invest. Consequently, an increasing number of people now harbour a dream of quickly earning enough so that they don’t need to depend on a 9-5 job for their livelihood anymore. Some prefer to accumulate enough that they don’t need to depend on any more earning, while others opt for remaining invested in securities even after retirement and then withdraw small portions (between 3-4 percent) every year, while the remaining corpus remains locked in investment.

Literally, it stands for financial independence and retire early. The proponents of this philosophy believe in frugal expenditure and a higher amount of savings – as high as 70 percent of their income.

By aggressively saving and investment, the followers of FIRE philosophy manage to retire early and become financially independent. “By starting planning early, it is possible to retire early, in the 40s.

For this, it is important that there is a clear strategy built on how this will happen i.e., separation of essential expenses and nice to have expenses, a good estimate of the retirement corpus needed, and a strong savings and investment rate, so that the goal can be achieved," said Vishal Dhawan, Founder and CEO of Plan Ahead Wealth Advisors. Although there are a number of ways to achieve