The Five Stages of FIRE – and how to keep it alight

The journey to FIRE– financial independence, retiring early– looks like a lot of things to a lot of different people. Some people retire to the countryside. Others retire to travel the world. Still others ‘retire’ to run their own business. No matter what the path, all the journeys have five things in common, and along the way face similar challenges.


As a person first learns about financial independence, a small flame kicks to life. A story is told and the idea takes hold.

person curving wood

Those who are interested in financial independence find out about the possibility lots of different ways. Some people are naturally frugal, and the idea grows organically. Others might find themselves with a higher-than-expected paycheck and wonder what to do with the money. Maybe they stumbled on a blog that detailed someone’s process of early retirement. The idea takes hold– wait a minute, is that something I could do?


The main challenge at this stage is getting the spark started. Many people don’t want to think about money beyond what will purchase their next desire. It is a stressor for many, and learning about financial independence is just a fantasy out of reach like luxury cars or a house featured on a Netflix series.


Financial independence is achievable by the average person. The elements in their control are

  1. How much they live on
  2. How much they earn

Your savings rate will determine how quickly you can retire. If you save 50% of your takehome pay, whether you make $25,000 or $85,000, you will be able to retire in 17 years. To read more, checkout this post by Mr. Money Mustache. Sometimes it simply takes time. Plenty of people wake up later in life, figure out that they are way behind, and are emboldened to make a change.

The Flicker

blue and yellow flame painting

The kindling is often followed by disbelief. Many people quench their curiosity about FIRE with doubt like fingers on a matchstick. These “early retirement police” weasel out reasons why it would not be possible under normal circumstances for someone to achieve FIRE. The reasons are boundless: that person had an inheritance; this person makes much more money, those people don’t have kids. These are merely excuses for not putting in the hard work of figuring out how. The key to getting past the flicker is genuine curiosity. How have people retired early and had children? How have they retired on a low income? How can I do the same? Keep asking how.


It can feel like everything is working against you and your efforts to save. Cars break down, kids are born, and you have a certain lifestyle you would like to maintain.


You are in charge of your life. You can make the choice to move closer to work and sell your car. You can downsize your home. You can make the choice to prioritize the things that matter and drop the things that don’t. You are not just a victim of your past choices, but the decider of your future course. Take action!


blaze bonfire campfire dark

Through asking more questions, the flame catches hold. It starts lighting up other areas of life. Somebody who is interested starts reading books, researching finance, reallocating their 401k funds. They are voracious.

They learn about tax-shelters, backdoors, rollovers—strategies and methods for saving more. They calculate their target numbers, set up excel graphs, track their progress. They negotiate for higher pay and start their own businesses. The blaze can keep them going through dark times, making them more able to weather hardships.


There is so much information at this stage. A lot of people here struggle sharing their journey with friends and family, who don’t seem to “get it,” or worse, feel offended by their choice. It is also easy to get overwhelmed at this stage with all the information.


There are tons of folks out there willing to give you advice on your 401k allocations. When I started researching, I posted all of the funds available to invest in and a user who had been giving advice on the forum for 12 years broke down the percentages I should put in each, patiently answering any and all questions I had. Part of riding the kindling stage of FIRE is the drive to do the research needed to back up financial decisions. Find a community of support. See if any of your friends are interested in finance.


The initial burst of energy crackles out. The upfront work is complete, so it is time to hunker down and stay the course. It is the “boring” middle; all the allocations are set, automatic investing manages money, there is nothing left to optimize.


The desire for fire is still there, burning hot under the coals. You have a goal in mind, but you are still working. It can start to feel like a video game, training up your character but having to go through repetitive motions to get there.


Staying the course and not feeling bored or restless.


Focus on the now and on building the life you want to live. Start exercising to invest in your body. Pick up interesting books to invest in your mind. Learn new skills to invest in yourself. Do not squander what you have right now.

Gubraithian fire

Dumbledore’d bewitched this branch to burn fer evermore, which isn’ somethin’ any wizard could do […] ” —Rubeus Hagrid in Harry Potter and the Order of the Pheonix

When it is time to retire, you have a portfolio that can last you evermore. Not many people have the discipline to get to this point. If you do, many people wonder whether you are a wizard. What magic spells have you cast? Did you have to drink a magic potion? No, you would answer with a wry smile. Sadly, you are a muggle just like everyone else, but you worked really hard to get this everlasting fire.

Congratulations on your otherworldly achievement.

yellow flame


Achieving financial independence takes effort and hard work. Some of the challenge is in earning more, some of it is in spending less. It takes tenacity to keep feeding the FIRE and letting it grow. The challenge once you are there is finding out what will fulfill you. What will you work on if only for the passion of it, not the money? Will you speak about your experiences, share your expertise as a consultant, or volunteer your time in other ways? How do you find meaning in what you do?


Don’t think of financial independence as an escape. It is actually an adventure onto something new. Forge new friendships, join local communities. Experiment to find out what fulfills you. Is it fostering animals or wood working in the garage? I hope to explore this more as I continue on my journey to financial independence.

What do you think?

What sparked your fire?

What stage of FIRE are you at?

Are there other stages of FIRE?

Leave your answers in the comments below!

Get Posts Delivered Straight To Your Inbox!

1 Comment

Leave a Reply

Your email address will not be published. Required fields are marked *