“It is popular with young, highly paid graduates”: retirement at 40, the quest of followers of the FIRE movement

What if retirement at 40 was possible? Between massive savings, financial investments and frugality, the followers of the FIRE movement, essentially wealthy tech or finance executives, want to free themselves from employment as soon as possible to live on their capital alone. Since their arrival in the United Arab Emirates twelve years ago, Mathieu (first name changed), 39, and Sophie, 38, have saved on average “between 50 and 70%” of their income each month.

If their savings were initially intended to finance their retirement or to compensate for a job loss, the couple employed in marketing and the media quickly wondered what to do “so as not to have to work too late”. Mathieu discovered the FIRE movement, for “Financial independence, retire early”, which notably advocates investment in ETFs (financial products which replicate the evolution of stocks or indices) and real estate.

This movement, which emerged online "between 2005 and 2010", experienced a "major turning point" in 2011 with the launch of the Mr. Money Mustache blog by a Canadian computer scientist who retired at 30, relates Mohamed Chelli, associate professor of accounting at the University of Ottawa and co-author of a study on the FIRE movement. “Not accessible to everyone”, it is popular with “highly paid young graduates”, especially in “the (tech) and finance sectors”.

Mathieu and Sophie assure that they have never been into “hyperfrugalism”, most of their savings relating to promotional products or restaurants at reduced prices. To achieve financial independence, the couple with two children built up capital of between “3 and 6 million euros”. “We like our careers but we have always worked to earn money,” recognizes Mathieu, who today earns between 20,000 and 30,000 euros per month. A few months before his farewell to employment, after his wife “who has just stopped”, Mathieu redoes “the calculations 50 times” to ensure that “it is enough”.

He plans to work in a classic car garage “for fun,” so as not to “stay at home with nothing to do.” In France, Guillaume Angot, author of the blog “Mes Finances ma liberté” and former research engineer at EDF, “did 10 years of study and 6 years of employment” before saying “Bye bye boss” at age 34, in 2020, thanks to his savings of 50% per month and his investments. The one who showed himself to be an “optimiser on everything” is “proud” to have achieved his objective: “I saw on my spreadsheets that it worked and I said to myself, I dare to implement it in my life, to resign, we will see what happens.”

After a year and a half looking for “a new balance”, he became a wealth advisor. “There are 10,000 ways to live” the FIRE movement, assures Mr. Angot, even if it is based on one concept: the 4% rule. It consists of multiplying your annual expenses by 25 to obtain the budget necessary for your early retirement. Once reached, a withdrawal of 4% of your capital each year - adjusted for inflation - is supposed to allow you to live for at least 30 years. Sometimes at the risk of turning away from the philosophy specific to the movement, notes Mr. Chelli, because some “move to a luxurious lifestyle”. The researcher considers it paradoxical that “the initial practices of minimalism and anti-capitalism” can give way “to luxurious and capitalist habits as soon as financial autonomy is achieved”.

In Zurich, Switzerland, Pierre (first name changed), a 35-year-old French tech employee, hopes to amass capital of just over three million euros for his 40th birthday. He invests in an online portfolio and saves up to 60% of his income. Without depriving yourself. The thirty-year-old considers it “unimaginable” to endure the “constraints” of employment “until (his) 65 years”. “I would like to have a child and watch him grow up. For me, it’s a big factor” because “when you’re an employee, you never see your kid,” concludes Pierre.