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The FIRE movement: Can big, fast savings make you a millionaire?

Experts weigh in on whether living frugally and banking the rest can lead to early retirement whatever your life stage

young man relaxing on beach, while reading emails on laptopAccording to the FIRE formula, if you live frugally and save furiously you can retire early (Getty Images/grinvalds)

Retiring at 30, 40, or even 50 may be a long shot for most of us, but some are pulling it off by hopping on board a trend: save most of your money, quit your day job forever. 

The FIRE movement—Financial Independence, Retire Early—which was born out of the 1992 book Your Money or Your Life, has been gaining momentum over the past decade, particularly with millennials. 

Some argue that FIRE’s premise—live frugally, save furiously—is simple in phrase, but harder to implement, depending on your age and financial circumstances. Others believe it’s a path anyone can follow.

Here, experts weigh in on the opportunities and challenges behind FIRE, and what could lie in its wake.


To follow FIRE, you need to save a minimum of 50 per cent of your income and trim your expenses. This means living very frugally, getting rid of any debt and investing wisely. Ideally, once your savings reach about $1 million, or 30 times your yearly expenses, you can retire, according to the movement. 

A well-known proponent of the movement is former software engineer and Canadian blogger Peter Adeney—a.k.a. Mr. Money Mustache—who retired at the age of 30. According to Adeney, he and his wife saved approximately 66 per cent of their income, acquiring enough savings in less than 10 years to quit their day jobs. That was almost 15 years ago. 

“The idea is that if you are earning quite a bit, but you trim your lifestyle down so you are only living on about 25 per cent of that amount, then you are ready to retire when: you’ve finished building your golden nest egg so you can give up the ‘75 per cent’ part of your salary you were saving. Your savings (combined with some optional part-time work) will continue to generate that other 25 per cent for you reliably, forever,” he shares in his blog.

FIRE duo Kristy Shen and Bryce Leung, who retired at age 31 and 32 respectively, were convinced after stumbling upon the movement in 2012. The married couple were working as software engineers in Waterloo, Ont. at the time, scrimping and saving, in hopes of buying a home.

“We were banking all our extra money, but it seemed like every time the housing prices would run away from us,” shares Leung. “We started looking for other opportunities and exploring what would happen if we invested instead.”

With $500,000 to their name, they shifted gears, applied FIRE principles to their savings strategy and started managing their own investments. Just as their calculations suggested, within three years they amassed $1 million.

Now 36 and 37, Shen and Leung travel the world running their website, Millennial Revolution and writing books, including the recent how-to guide Quit Like a Millionaire

“It’s not about how much you make, but how much you save. A lot of people don’t have six-figure salaries,” says Shen. “People get scared about the $1-million goal. You don’t have to be. You are still able to reach financial independence if [the formula] is properly applied.”   


Jason Heath,a certified financial planner and managing director of Objective Financial Partners Inc. in Markham, Ont., isn’t so sure. Though he supports cutting expenses to save more, he feels the movement and its adopters, are short-sighted. 

Depending on your stage in life, there is only so much that can be cut from the budget, he says. Roadblocks to Fire, he says, include starting a family or owning property, where big expenses such as daycare, a mortgage and property tax take priority. Heath questions how the movement can hold up for just anyone.

There are also longer-term considerations younger investors may not consider, he says. An aggressive savings strategy may only account for how life exists in the present day, or if circumstances were to stay the same, but unexpected events, such as a family illness, death or divorce, can take a hefty financial toll.

“[You need to] have a contingency plan built in for some of these extraordinary things that can happen in the future…Why not just work a little bit longer, work a little bit differently, and overshoot a bit?” asks Heath.

Bridget Casey, founder of Calgary-based Money After Graduation, a financial literacy resource for young professionals, agrees adding that FIRE is unsustainable from an investment standpoint. The strategy, she says, hasn’t accounted for (nor experienced) a financial market crash. Its potential impact on FIRE investors, particularly those that retire with $200,000 or $300,000 banked, could be devastating, she adds.   

“My generation has almost never known a bad year of investing [but] when the stock market actually dips say 20 per cent, or even more, they are going to be horrified to watch those portfolios go down, dividends will be cut,” the 33-year-old says. “They won’t have the sustainable income.”

Casey also challenges living frugally forever. Recent grads who have landed a decent paying job won’t find living sparsely, while saving, too challenging. But how will they maintain that momentum?

“Is it sustainable? If you want any other kind of life than a single student, or if you want a family, it’s not realistic,” she says.


For Shen and Leung, the strategy is working so far, and they have no plans to change course any time soon, nor cease encouraging others to do the same. 

“Your path does not define you. People make [financial] mistakes. The important thing is to make the lifestyle changes to set you on the right path,” says Leung. “We didn’t do anything that crazy. Everything we did is revocable at any point.”

Whether you jump on board FIRE or ride the tide towards retirement, there are some key takeaways: cut back where you can, save as much as possible and deal with debt, suggests Casey.

“The good thing about the FIRE movement is [that] it makes people save a lot in a short time. I think it’s good that they feel empowered,” she says. “It definitely lays down the foundation for a long-term financial future.”

For Adeney, FIRE redefines the idea of retirement as we know it. Living it, he says, is possible for anyone, as long as the rules are applied. It’s less about never working again, he says, and more about living your best life to its fullest.

“Retirement is earning the privilege of being free to enjoy the balanced lifestyle of our dreams, without ‘working for a living’ getting in the way too much,” he shares in his blog. “You don’t have to quit working altogether, you just have to feel secure enough to be choosy about your work, and your schedule.”


It’s never too late start saving for retirement. Check out CPA Canada’s The Procrastinator’s Guide to Retirement: How to Retire in 10 Years or Less to discover your best route to saving when you’re 50 and over.