You Could Retire in Your 40s By Following the FIRE Movement

This article is part of a series about the FIRE Movement and how investors can apply these principles to their lives, compiled by

a golden egg in a nest with a label reading "Retirement"
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While retirement is many decades away for young Americans just starting off in their career path, it’s never too early to start thinking about the end of your career.

The retirement landscape has always been a cloudy one, and forecasts have only gotten murkier due to the novel coronavirus pandemic. But with careful planning — the earlier the better — you can set a course to retire in your 40s. This brings us to the FIRE movement.

As you may already know, FIRE stands for “financial independence retire early.” Rather than a flavor-of-the-week gimmick purporting to net you a millionaire’s lifestyle for the low, low price of $19.99, FIRE is based off tried-and-true principles of frugal living and sound investing practices. Thus, it is something that anyone can accomplish. But let me be clear — it will require discipline.

Invariably, that’s going to be one of the toughest, if not the toughest challenge of adopting the FIRE lifestyle. Especially as a young person, you want to live it up; after, all YOLO — you only live once. Naturally, peer pressure will mount as your friends jet off to exotic locations and hit the hottest nightclubs in town. Admittedly, introverts probably have a better chance of being on FIRE than their extroverted counterparts.

Nevertheless, retiring in your 40s should be a basic benchmark for every young person. For one thing, the threshold provides a safety margin. Even if you don’t retire in your 40s, but manage to do it in your 50s, it means you won’t have to fret in your golden years, unlike so many Americans who simply don’t understand the depths of their unpreparedness.

Further, the traditional retirement age could easily increase due to Social Security reform. With soaring costs associated with combating the coronavirus, Washington will almost certainly rob Peter to pay Paul.

So if you don’t want to be Peter, here are some ways to light a FIRE in your retirement planning.

FIRE Is All About Non-Traditional Thinking

Although I mentioned that the FIRE movement was established via sound, established principles of essentially maximizing cash flow and minimizing liabilities, it’s American traditions that get in the way of early retirement.

We’ve all heard the mantra of “go to school and get a good job.” Well, that notion became popular in the post-World War II, Social Security era. However, I’m afraid that our globalized and technology-impacted economy has changed the paradigm altogether. Thus, if the game has changed, we must also alter how we approach it.

First and foremost for young people is to address academia. If you haven’t entered college or university, or are still mulling your academic options, consider an earth-shattering yet obvious choice: foregoing higher education altogether.

According to, the “average total price for a 4-year degree is approximately $122,000.” I don’t care who you are — that is a big chunk of change. With factors at play including long-term stagnant wage growth and now a job market deflation, this is not a cost you want to bear.

Instead, consider enrolling in a trade or technical school. As multiple surveys have demonstrated, millennials are big on tech but not on manual acumen. A young person may know the latest dance moves on TikTok, but not so much how to change a tire. In other words, the opportunities in blue-collar work are tremendous.

Anecdotally, I’ve heard from folks who work in the trade that most people under 40 don’t even own a set of basic tools. Yet surveys suggest that this narrative isn’t too far off from the truth.

Therefore, a remarkably viable way for young people to get their FIRE plans on track — and potentially accelerate it — is to think contrarian by thinking blue collar. This is where demand is the greatest.

Retirement Doesn’t Mean Sitting on Your Rear

Understandably, millions of young workers are simply not in a position to go the blue-collar route. Likely, they already are burdened with student loans and are facing one of the worst job markets in U.S. history. Even for those that are fortunate to be working remotely, low salaries remain challenging.

When you do the math, it doesn’t seem feasible to retire in your 40s.

However, there is a major misconception about the FIRE movement that I’d like to clarify. Financial independence doesn’t mean sitting on your rear watching television until you die. Rather, it centers on generating cash flow outside the traditional boundaries of corporate America.

For instance, if you’re working nine-to-five in a cubicle, that doesn’t have to be your only income source. Instead, you can jump on a freelancing network like Upwork (NASDAQ:UPWK), where you can post your expertise and bid for short-term or one-off contracts. Do enough jobs with impressive results and you may be able to replace your cubicle work and freelance full time.

In addition, you can take the extra income from your side gig and direct it toward strong, relevant companies that pay dividends. Indeed, volatility in the stock market should be a great opportunity to buy viable companies that are simply going through a rough patch.

Ultimately, FIRE isn’t about retiring from work but rather, finding something that you love and building a cash flow-friendly enterprise around it.

Profiting from Long-Term Trends

As a FIRE proponent, you’re going to be deeply involved with not only your immediate budget but your long-term investment strategy. Here, you should focus not just on current events, but on developments that will take place over the next 20 to 30 years.

For instance, mainstream headlines are awash with coronavirus stocks, particularly vaccination companies like Inovio Pharmaceuticals (NASDAQ:INO) or iBio (NYSEAMERICAN:IBIO). But what happens when the Covid-19 pandemic invariably fades away? From a longer-term outlook, investors may want to consider dividend-paying firms like Gilead Sciences (NASDAQ:GILD).

Another example is an organization like Zoom Video Communications (NASDAQ:ZM). Zoom is one of the hottest of hot stocks to buy because teleconferencing and remote work have become integral to our new normal. While I agree that remote operations will permanently change the definition of work, you may also want to consider reliable names like Microsoft (NASDAQ:MSFT), whose Teams service has seen widespread adoption during the current crisis.

No, it’s not the sexiest name in the world. But it offers stable capital returns and dividends and will likely continue doing so because of its constant innovations and irreplaceable tools for white-collar professionals.

Finally, I’d take a long look at what I would term blue-collar stocks. From speculative bets like Universal Technical Institute (NYSE:UTI) to industry stalwarts like Home Depot (NYSE:HD), the blue-collar sector should see tremendous interest over the next few decades.

Let’s face it — most people have jumped on the college bandwagon but not everyone has the same opportunity to succeed, let alone thrive. American society has pushed a false narrative that blue-collar jobs are somehow less than (miserable) office jobs. That will change and when it does, you want to be on the right side of the trade.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he did not hold a position in any of the aforementioned securities.

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