FIRE Movement
BudgetingGlossary term
Definition
Financial Independence, Retire Early is a lifestyle movement focused on extreme saving and investing to achieve financial independence and optional retirement well before the traditional age of 65. Adherents typically save 50-70% of their income.
Related terms
- Financial IndependenceThe state of having enough income from investments, savings, or passive sources to cover living expenses without needing to work for money. Often defined as having 25 times your annual expenses saved, based on the 4% withdrawal rule.
- Savings RateThe percentage of income that is saved or invested rather than spent. Calculated by dividing total savings by total income. A higher savings rate accelerates progress toward financial goals and financial independence.
- Living Below Your MeansA financial philosophy of spending less than you earn, creating a surplus for saving and investing. This habit is the foundation of building wealth over time, regardless of income level. It requires distinguishing needs from wants.
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