What is Lean FIRE? The Frugal Way to Retire
What is Lean FIRE?
Lean FIRE (Financial Independence Retire Early) is the ability to stop working and retire before the average retirement age of over 60+ years of age but retiring on a lower cost of living standard.
How Much Do You Need for Lean FIRE?
When looking at retirement numbers, you need to create a goal to hit for your retirement. You cannot just wait until you are 60+ years old and think you have enough.
The 4% Rule
The FIRE movement uses the 4% rule to help figure out the amount of money you need. It is a simple formula to help you come up with a number to reach for. You take your annual spending and multiply it by 25. If you spend $40,000 per year, the formula will look like this: $40,000 x 25 = $1,000,000 .
Living Below Your Means
If you want to help reach FIRE or Lean FIRE, you must learn to live on less. This can help create more considerable savings.
What Are Some Pros and Cons of Lean FIRE?
Pros of Lean FIRE: - Quicker to Financial Independence - Less Stress - Living a Frugal Lifestyle
The Cons of Lean FIRE
Having a Family Has Challenges - Children need food, clothing, and they just typically come with more expenses. Restrictive Budget - This can be a budget that may not allow you to have everything you want.
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