Financial Independence, Retire Early (FIRE) is a growing financial movement that embraces extreme savings and frugal behavior to retire early and live off small withdrawals from accumulated savings. By setting aside the majority of their income, proponents of FIRE aim to save enough to finance retirement and then take regular withdrawals from their investments.

The main idea behind FIRE is to spend less than you earn and save as much as you can to retire as early as possible. This means foregoing many traditional expenses, such as housing, medical care, general lifestyle costs, and entertainment, for a period of several years, possibly even a decade.

The goal is to save up to 70% of your annual income and use it to invest in retirement accounts, such as a 401(K), IRA, or Roth IRA. The funds invested should be significant enough to allow you to retire hard, with no or minimal income from other sources. The idea is to continue to grow your investments and take out 3-4% per year in retirement. The 3-4% withdrawal rate usually allows the funds to last for decades, without adjusting for inflation or economic instability.

Some FIRE followers also invest in real estate, but only after more traditional investments have been made. Others invest in dividend-paying stocks, bonds, and alternative investments such as gold.

Essential to achieving a FIRE retirement is extreme financial discipline. Reaching the goal of retirement requires careful planning and wise investment as well as the determination to save as much as you can. Many who follow the FIRE principle track their net worth and fund their investments on a regular schedule.

Although many view early retirement as an unrealistic and impractical goal, proponents of the FIRE movement believe that a person can earn the freedom to retire early through hard work, dedication, and disciplined savings and investment. By following the FIRE principles, many individuals have achieved financial freedom and retirement before age 65.