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The FIRE Movement: How You Can Technically Retire at 30

Natasha Murmu

Science and Environment Editor



Photo VIA Art of Manliness and Ted Slampyak



Life after CEGEP can seem grim. The idea of working the best years of our lives away in the hopes of retiring at 65 is unappealing for a lot of students. Fortunately, it is possible to quit working full-time and retire earlier. In fact, many people have successfully retired between the ages of 30 to 50 thanks to FIRE investing.

FIRE stands for Financial Independence Retire Early. It’s a movement followed by people who want to be financially free earlier in life. The basic strategy is living frugally and investing large portions of your income in your 20s so you can live off your investment gains and achieve financial freedom earlier than the traditional retirement age. Before getting into the details of the FIRE method, let’s define some key financial concepts.

What is financial freedom? For most people, being financially free means being able to pay for living expenses without having to work a full-time job. Most people achieve this by having some source of passive income, which is a means of making money that requires minimal active effort to maintain. One way of making a passive income is by investing.

One way you can invest is by buying an asset, like a share of a company. If the asset increases in value over time and you sell it for a higher price than you originally paid, you will earn a profit. Due to inflation, simply saving money in your bank account or stashing it in cash form means it loses value over time. Investing puts your money to work. Essentially, it can allow you to make money with your money over a long period of time.

Most students have some amount of money they can invest, whether it’s from a part-time job or an allowance from their parents. However, the most valuable resource students have, besides youth, is time. Time is important in investing because of compound interest. In simple terms, it is when you earn interest on an initial investment plus previously accumulated interest. Compound interest allows people to grow their wealth exponentially. It’s why almost all investors wish they had started earlier.

So, how does FIRE work? The strategy is based on the assumption that a good investment portfolio returns 8% a year and that the rate of inflation increases by 2-3% every year. This means that an investor should be able to safely withdraw 4% of their savings a year.

In order to retire early the FIRE way, you need to determine your yearly expenses and how much money you want to live off of in retirement. Most people are able to retire and withdraw 4% of their money yearly once they have saved up approximately 25 times this amount. According to Expatistan, it currently costs $3 282 for a single person to live comfortably in Montreal, which roughly translates to a yearly living expense of $40 000. So, if you want to live off of $40 000 in retirement, you need to save $1 million in total.

Dividing this amount by the number of years you want to retire by gives you the amount you need to invest every year before retirement. For example, a 20-year-old Montrealer aiming to completely quit working by age 30 would have to invest a sum of $100 000 a year. Retiring by 40 would require investing $50 000 yearly.

Many people who have found success with FIRE have had to invest 50 to 70% of their annual salary. This is not feasible for everyone. In addition, completely quitting work means sacrificing benefits that often come with a full-time job, such as health insurance and dental care plans, among other things. However, how frugal you need to be and whether or not you keep your work benefits depends on your goals and income.

For instance, a person who wants to live off of $45 000 a year in passive income will have to save more money than someone who can live off of $25 000. For some, the objective might be to completely quit working after retirement. For others, the goal might be to switch to part-time work or pursue a lower-paying career that they’re passionate about. Their objective might be for their investment earnings to pay for a portion of their living expenses and for the income from their part-time or “dream” job to cover the rest.

Regardless if you think FIRE is right for you, investing in some way can help prevent your savings from losing value over time. There are numerous ways to invest money. You can do it on your phone, through your bank, or through online brokers like Wealthsimple and Questrade. If you prefer to take your finances into your hands, you can pick your assets yourself. If you prefer a more hands-free approach, you can put your money in a managed portfolio and let professionals invest it for you.

Signing up for an investment account is easy and only takes a couple minutes. With certain brokers, you can even invest as little as a dollar. There are tons of resources online that can help you determine what the best strategy is for you, be it FIRE or a less aggressive investing plan. What’s most important is getting started as soon as possible and investing consistently.


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