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The Three Most Common Ways To Achieve FIRE

In recent years FIRE, or Financial Independence and Early Retirement, has taken off around the globe, as more people realize that they have the power to invest in their own lives and achieve financial independence.

There are plenty of routes one can take to achieve FIRE. Here are the three most common ways to do so, including the pros and cons of each strategy. It’s important to understand how these methods work, how they don’t work, and how you can apply them to your own situation.

Investing In The Stock Market

If you choose to open an investment portfolio to invest in the stock market, you can eventually generate enough income that it will pay for your expenses in retirement.

But proper asset allocation is important, as it allows your portfolio to continue growing even as you make withdrawals. The key is to live off the generated income without depleting your returns.

The idea of living off stock investments seems foreign to a lot of people because they don’t understand how you live off those investments on an annual basis. Living off of your investment portfolio is more than possible, but there are still pros and cons.


  • It’s easy and accessible to the majority of people

  • Access to tax-advantaged investment accounts that either reduce your taxable income or allow your money to grow tax-free.

  • It’s passive. Investing in the stock market over the long term requires very little work and hassle. It’s a great fit for hands-off people who want to put their money somewhere and leave it to grow.


  • It can be risky. You can lose all of your money if you don’t hedge against risk.

  • You have to invest larger portions of your income to achieve FIRE. Traditional retirement requires saving about 10 to 15% of your income, but early retirement via stock market investing requires much more.

  • You have to invest for the long term. Without that long-term horizon, you are unlikely to achieve FIRE, due to stock market volatility. If you don’t want to invest over the long-term that volatility may cause anxiety, leading you to sell early at a loss.

  • Investing for FIRE is slow, and it can take a long time to pick up steam. Some people will lose motivation before they see results.

Investing In Real Estate

If you have the ability, investing in real estate can be a very effective way to gain financial independence, perhaps leaving you with 100s of thousands of dollars to put toward early retirement. But as with anything, there are upsides and downsides to this strategy.


  • You can reach FIRE more quickly than you would through investing in the stock market. The returns are greater and you can begin living off them earlier.

  • By investing a relatively small amount of money you can buy a relatively large asset, which you can then use to purchase other assets (ie, more properties). Leverage through real estate investing is a major pro of this method.

  • You have more control over your investments. If you want to increase the value of a property you can add extensions and make repairs, or even rent it out as an Airbnb.

  • It’s an effective hedge against inflation, which can have a huge effect on your financial independence journey. When you live off real estate you are largely protected from the worst effects of inflation, since real estate is one of the first things to grow with inflation.


  • It costs a lot to get started. You need cash for the down payment, repairs, furnishings, etc.

  • Compared to stock market investing, it requires far more physical and emotional labor. You can’t just invest your money and sit back and wait for it to work its financial magic.

  • You have far less diversification amongst your assets. For example, if you have three different properties and two tenants aren’t paying rent, it will deal a devastating blow to your retirement savings.

  • There are a lot of unique risks that deter people from investing in real estate. This can include being sued for a fall on the property, bad tenants, potential squatters, etc. If you don’t do thorough research, unforeseen risks can derail your FIRE journey entirely.

Starting A Business

When most people talk about starting a business, they aren’t talking about it as a mechanism for achieving FIRE. But it can be a vital way of achieving financial independence.

The key is starting a business that produces passive income, which can lead to true financial freedom. Things like creating apps, self-publishing e-books, building websites, affiliate marketing, etc. You create a product that will continuously sell, so you reap the benefits without additional work on your part.


  • You are your own boss. You get to choose what you make and sell.

  • Your income potential is endless depending on what you create (for example, a successful app can literally make millions).

  • Depending on the type of business, you can be relatively (if not completely) location dependent. Being able to move anywhere can help you drastically cut housing and even living expenses.

  • More potential to pass on generational wealth. Your children can reap the benefits financially and also intellectually, as you can show them how to manage a passive income business.


  • There is a fine line between passive and active income. You may start a business that you think is going to produce passive income, but you end up doing more work than you did before starting the business.

  • Income can be inconsistent. Whether due to missteps or luck, your business may not generate enough wealth over time to maintain early retirement. A failed business can jeopardize all of your FIRE plans.

  • It requires a lot of work upfront. In the beginning, you might have to spend 40-50 hours a week, which can take a mental and physical toll on you. You have to be 100% dedicated to making a passive income business work.

So these are the three most common ways that people can achieve their dream of financial independence and early retirement. Of course, not all of these things will work for or appeal to you. This is especially true if you don’t have the funds to invest in real estate or the ambition and ideas to start your own business.

Of the three, investing in the stock market is the most accessible way to start your FIRE journey. Even if you start small, investing what you can spare from your monthly paycheck, it will still act as passive income, growing your wealth in the background and eventually making an enormous difference to your progress.

Whatever strategy you choose, make sure you have a specific plan for financial independence that works for your unique situation. Hopefully, these strategies have given you inspiration for new ways to generate income and work toward your FIRE goals.


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Hello, We’re Amon & Christina

We’re former federal government employees that focused on saving, making, and investing money so that we could grow enough wealth in our investments to never have to work again.

And, guess what? We did it! At the age of 39, we reached financial independence, quit our jobs, and . . . we retired!

So, if you’re interested in learning how to save, make and invest money on the road to financial independence and retiring early (i.e., F.I.R.E.) - this site is for you!

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