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“At what age do you plan to retire?”
For most people, the answer is simple: 64 or 65 years old.
We grew up with this idea:
Studies -> Work for forty years -> Retirement.
Retirement = Finally enjoying life.
Having also grown up with this theory, it seemed to me the only possible option.
Then one day, I stumbled upon a completely different concept.
Some people stopped working at…
- 35 years
- 40 years old
- 45 years old
I immediately thought to myself:
It's a scam.
Then I started reading. Doing calculations. Discovering and analyzing testimonies.
And I understood one thing:
It is possible to become financially free before the age of 45!
A few people have proven it.
They had simply applied a rather simple strategy for several years: the FIRE strategy.
- Not a miracle method.
- Not a promise to become rich.
But it's a way to achieve financial freedom at a very young age.
By the end of this article, you will understand:
- what FIRE is
- how it works
- Why do some people become financially independent before the age of 45?
- whether this method is realistic for you or not
What is the FIRE movement?
Fire Movement. Financial Independence, Retire Early (FIRE)?.
Personally, I prefer abbreviated to Financial Independence. Or financial autonomy.
There are many people who talk about early retirement. In my opinion, it's quite misleading.
Why? Because many people imagine early retirement as:
- Drinking Cocktails All Year Round
- Going to the beach 9 months out of 12
- To do nothing more with one's life
But in reality, most FIRE people continue to work, even if they have enough money to quit.
Generally, financially independent people:
- They become independent by doing an activity they love working on
- They travel more often and for longer periods, but work a lot when they are not traveling.
- They simply spend more time with their children.
The true goal of FIRE isn't to stop working completely. The true goal is to no longer be obligated to work. To no longer depend on a client, boss, or the state.
This is the true freedom sought by frugalists.
Why does the FIRE movement generate so much skepticism?
When I talk about financial independence with people around me, the reactions are often the same.
«"It's impossible."»
«"You have to be a millionaire."»
«"You'll never enjoy your life."»
«"You have to work hard until retirement, like everyone else."»
At first, these remarks surprised me. Then, I understood that they were actually quite logical.
We almost all grew up with the same lifestyle.
Study -> Find a job -> Work for forty years -> Wait for retirement around 65.
For many people, this path is the norm. It is so ingrained in our culture that it seems to be the only possibility.
It is normal that, after hearing several times that retirement is at 65, the idea of becoming financially independent at 40 or 45 often seems unrealistic or dangerous.
But there are other reasons too. Here are some reasons for skepticism towards financial freedom.
The fear of being questioned
When an idea challenges our way of life, our first reflex is often to reject it.
In truth, it is simpler and more reassuring to be within the norm than not to be.
If someone claims that it is possible to become financially independent well before the legal retirement age, it forces us to ask a very uncomfortable question:
«"Could I have done things differently?"»
This questioning can be difficult to accept. Even more so to analyze, because it can cause regrets.
To avoid this, many are convinced they are making the right choice every day. It's easier and less painful, but it's also a way of not progressing in life.
We often confuse financial freedom with wealth
Many people imagine that FIRE means owning villas, luxury cars, or a multi-million dollar bank account.
The media influenced us with this theory.
However, the book The Millionaire Next Door presents unexpected findings about American millionaires that contradict our preconceived ideas. For example:
- about half of the millionaires in the USA live in middle-class or working-class neighborhoods
- The majority of millionaires have only one wife in their lives. In most cases, their wife is very thrifty.
- The majority of millionaires wear watches costing less than $100 or do not own a watch.
- The majority of millionaires dress like middle-class people.
In truth, after a certain amount of money, real millionaires no longer want to accumulate millions or spend on luxuries; they seek to obtain their freedom.
Becoming financially free is about prioritizing freedom and simplicity, and ignoring social status.
I usually say:
I'm not trying to get rich to buy more; I'm trying to have enough money to decide my own life..
We underestimate the power of time and compound interest
Many people want quick results.
If an investment yields little after two or three years, they believe that the financial investment is not working.
However, compound interest takes time to produce results.
When we invest, generally speaking, the first few years are slow. Very slow, in fact.
Indeed, the first few years of investment often do not lead to wealth.
Then, after ten, fifteen or twenty years, growth accelerates dramatically.
Why? Because the gains multiply among themselves. And it is only after a few years that they become the engine of growth.
It is precisely this patience that many people struggle to accept, and which prevents them from becoming millionaires.
Fear of investing
Many people never take the step towards becoming financially free because they are afraid to invest.
When we have not received an education that encourages investment, taking the first step requires courage.
However, studies prove it. Often, the worst investment is… not investing.
Not everyone has the same goal
It is also important to recognize a reality. Not everyone wants to become financially independent by the age of 40.
Some people love their job. Others prefer to enjoy their money more today rather than save it.
And there's nothing wrong with that. But it's a life choice that will have to be taken responsibility for later.
The FIRE movement is not a religion or an obligation. It is simply another way of thinking about money, freedom, and time.
For me, what attracts me to FIRE isn't the idea of never working again. It's primarily the freedom to:
- Choosing my life projects
- Not being dependent on a boss or a difficult client
And this freedom is worth, in my eyes, far more than any luxury item.
The three pillars of the FIRE movement
The movement FIRE (Financial Independence, Retire Early) is based on a simple idea: build enough wealth so that your investments can finance your lifestyle.
To achieve this, there are three essential pillars.
First pillar: Saving more
Saving is the starting point. The more you put aside each month, the faster you can invest and grow your wealth.
The goal is not to deprive oneself of everything, but to spend in a rational and organized way.
In reality, every CHF (or EUR or USD) saved today is a CHF that can work for you tomorrow.
Example :
- If you earn 5,500 CHF per month and spend 5,200 CHF, you therefore save 200 CHF.
- By reducing certain unnecessary expenses and avoiding impulsive purchases, you could save 800 CHF per month.
In this case, the 600 CHF you save could mean:
- Years of early retirement gained
- Thousands of CHF earned by investing this money
Second pillar: Increase and diversify your income
Reducing your expenses is excellent, but there is a limit: You can't live with zero CHF expenses.
Indeed, The advantage of income is that it can continue to increase infinitely over time.
To increase your income, you can, for example:
- request a raise
- change jobs for a better salary
- develop a complementary activity
- monetize your passion
Ideally, your standard of living shouldn't increase at the same rate as your income. If your salary increases but your expenses remain stable, your savings will grow much faster.
Third pillar: Investing and making money grow
Money saved shouldn't just stay in a bank account. Over time, inflation causes it to lose value.
Investing, on the other hand, allows your money to work for you. Thanks to compound interest and the growth of financial markets, your wealth can grow year after year.
FIRE investors often favour diversified investments, such as index ETFs, in order to grow their capital over the long term.
The impact of compound interest should not be overlooked. For example, an investment of CHF 700 per month with an average annualized return of 8% yields CHF 640,700 after 25 years.
In summary:
- Save allows you to accumulate capital.
- Increase your income accelerates this accumulation.
- Invest grows this capital until financial independence is achieved.
Understanding the rule of 4%
The 4 % rule is one of the best-known principles of the FIRE movement.
This rule is not a coincidence; it comes from the Trinity study, analyzed by three professors from Trinity University.
The study concludes that an investor with a 100% US stock portfolio (for example, an S&P 500 ETF) can withdraw approximately 4% of his assets each year while having a very good chance that his capital will last for several decades.
In other words, instead of living on a salary, you live on the income generated by your assets.
A simple example
Let's imagine you spend 40,000 CHF per year.
According to the 4% rule, approximately:
€40,000 × 25 = €1,000,000
Why multiply by 25? Because withdrawing 4% per year is equivalent to owning approximately 25 times your annual expenses.
Here are some examples:
| Annual expenses | Targeted assets |
|---|---|
| 20 000 € | 500 000 € |
| 30 000 € | 750 000 € |
| 40 000 € | 1 000 000 € |
| 50 000 € | 1 250 000 € |
In this case, if you wish to become financially free by applying the 4% rule, with 40,000 CHF in annual expenses, you will need 1,000,000 CHF
Do not underestimate the power of compound interest
Many novice investors might be discouraged by the prospect of reaching such a sum. But they overlook compound interest.
To give an example, let's imagine that you:
- as 100,000 CHF already invested
- invest 700 CHF each month
- will have an average gross yield of 8% per year
In that case, you can reach a million in 22 years.
In other words, if you start investing at 20, you can become a millionaire at 42.
A rule to be used with caution
Many frugalists take this 4% rule as an exact science. But it is not.
The 4% rule is an estimate, not a guarantee.
Therefore, it is better to adapt to the financial market rather than apply a financial rule in uncertain markets.
What is life like for a FIRE follower?
Contrary to popular belief, following the FIRE movement does not mean living in deprivation or counting every penny.
In the media, we see frugal people saving every penny instead of enjoying life. It's just television!
Most of the frugalists I know lead normal lives and their frugalist lifestyle is not visible.
To give my example:
- I travel 5 times a year
- I have a standard apartment
- I have a converted van
- I spend several weekends a year traveling
- I have a typical job, with a rather low salary.
From an outsider's perspective, no one sees that I'm a minimalist and frugal. It's quite the opposite. Many people think I spend a lot of money because I travel a lot 😁.
And yet, right now, I'm saving about 40% of my income each month. And I have a rather low salary!
To give an example, my work colleagues are unaware that I am a big saver, a minimalist, and that I am partially financially free.
In truth, I am implementing an optimal financial plan:
I consume in a very simple way and I avoid impulsive spending > this allows me to save more -> with this money saved -> I invest in a profitable investment -> I accumulate compound interest.
You don't need a master's degree in finance to create this diagram. It's something anyone can do!
And don't forget:
The pleasure of becoming financially free doesn't begin at the finish line; it begins right from the start..
Conclusion
If you were to remember only one thing from this article, let it be this: The FIRE movement is not reserved for millionaires, financial geniuses, or people who earn extraordinary salaries.
It is based primarily on simple principles:
- spend consciously
- save regularly
- investing for the long term
- let time do its work
Is it easy? No.
Is it fast? Not at all.
But it's not difficult either.
It's an approach that allows you to gradually regain control of your time and choices.
And perhaps that is true wealth.
Personally, I'm not pursuing FIRE to stop working at all costs. I enjoy working, learning, and creating projects.
What I seek above all is freedom:
- to be able to say no to a job that no longer suits me
- to take several months to travel if I want to
- to devote more time to my loved ones
- not making difficult choices due to lack of money
You don't have to aim for retirement at 40. However, I think everyone has something to gain from having a little more financial freedom.
Even if you never reach FIRE, every penny saved, every investment made, and every good financial habit brings you closer to a more peaceful life.
And even if you don't benefit from this money, you at least leave an inheritance for your children that makes their lives easier.
Ultimately, the FIRE movement isn't just about accumulating wealth to say you're rich. It's about building a life where your money works for you, so you can dedicate more time to what truly matters.
FAQ – FIRE Financial Independence: The Complete Guide to Understanding Financial Independence
What is the FIRE movement?
The movement FIRE (Financial Independence, Retire Early) aims to achieve’Financial Independence. by accumulating enough passive income (through investments in the stock market, real estate, etc.) to cover expenses, without depending on a traditional job. The goal is not necessarily to retire, but to to become financially free to choose one's lifestyle.
How to calculate your Fire Number
Your Fire Number is the capital needed to live off your passive income. The most common method is the 4% rule :
Fire Number = Annual Expenses × 25
Example: If your annual expenses are 60,000 CHF, Your Fire Number is CHF 1,500,000 (60,000 × 25). Invested in Global ETFs (like the S&P 500), this capital will allow you to withdraw 4% per year (i.e., 60,000 CHF) without depleting your savings.
How many years does it take to reach FIRE?
It depends on your savings rate and your investments. Here is an estimate:
FAQ: FIRE Financial Independence in Switzerland
| savings rate | Years to reach FIRE |
|---|---|
| 10% | 50 years |
| 30% | 25 years |
| 50% | 15 years |
| 70% | 8 years |
| Source: Trinity study and calculations based on an average yield of 7% per year. |
Can FIRE be achieved in Switzerland?
Yes! Several Swiss people have succeeded, such as Dror (retirement at 46). However, the high cost of living in Switzerland makes this a more difficult challenge. It requires:
✅ Reduce your spending (housing, transport, leisure).
✅ increase its revenues (high salaries, additional income).
✅ Investing effectively (ETF, rental property, etc.).
Do you have to live like a hermit to succeed at FIRE?
No! FIRE does not mean deprive oneself of everything, but optimize your spending to save more. Many frugalists travel, go out, and enjoy life… but frugally. The idea is to spend on what really matters to you.
What are the best investments for FIRE?
Frugalists favor:
- Global or American ETFs (ex : MSCI World, S&P 500): Diversified, inexpensive, and perform well in the long term.
- Rental property Generates passive income, but requires a significant initial investment.
- High-yield savings accounts : For the emergency fund.
- The dividends Stocks or funds that pay regular income.
Is the 4% rule reliable?
Yes, according to the’Trinity study (1998), withdraw 4% per year of a portfolio invested 60% in equities and 40% in bonds 95% chance of lasting 25 years. In Switzerland, with Global ETFs, This rule remains valid, but you must adjust the amount to your cost of living.
Is it possible to achieve FIRE with an average salary?
Yes, but it will take longer. For example:
- Salary: CHF 80,000/year
- Expenses: CHF 40,000/year (savings rate: 50%)
- Investments: CHF 40,000/year (average yield: 7%)
→ Fire Number: 1,000,000 CHF (40 000 × 25)
→ Estimated time: 15-20 years
What mistakes should be avoided with FIRE?
❌ Underestimating your expenses Many people forget about unexpected expenses (health, repairs).
❌ Not diversifying your investments Putting all your eggs in one basket with a single stock or sector is risky.
❌ Wanting to go too fast FIRE is a marathon, not a sprint.
❌ Neglecting one's current happiness Saving is important, but not at the expense of your quality of life.
Is FIRE suitable for everyone?
No. FIRE is asking:
✔ Discipline (savings, investment).
✔ A minimalist mindset (consume less, but better).
✔ Patience (The results take years to arrive).
If you prefer live in the moment If you don't care about the future, FIRE might not be for you.
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How does this blog live?
Overall, this blog lives on sharing a frugal and minimalist lifestyle.
For a question of transparency towards the readers. All recommended products are in order to make life cheaper, simpler and to promote the essentials.
Basically, my only income with this blog comes:
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About me
I decided to create this blog to develop and help readers who are looking for a simpler and more economical life.
Compared to before, I was a person who consumed a lot until the day I realized that my consumption made me sadder and poorer 😑
Now I prefer the minimum of my needs to be happy and achieve my financial freedom.
Without realizingI started to focus on saving and investing to depend on a boss for as little time as possible and to speed up my personal projects.
For several years I have felt happy and I have become richer in a way that I would never have imagined given that I have an average salary in Switzerland.
It is for this purpose that I decided to create this blog. In order to share and learn with other people who seek freedom and simplicity 😉
Are you rather minimalist or frugal Jonny?
I am as minimalist as I am frugalist. However, there are situations where I lean more towards an art of life.
To conclude, I think the most important thing is to feel comfortable in your lifestyle 😊
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