In this article, we cover 10 essential FIRE reads and book summaries for 2020.
The ideas that originated the FIRE movement began with the 1992 book Your Money or Your Life by Vicki Robin and Joe Dominguez and the 2010 book Early Retirement Extreme by Jacob Lund Fisker. Since then, countless people have taken advantage of these principles to navigate a path to becoming financially independent and retiring early.
Maximize your savings rate. Increase your income. Decrease your expenses. The 4% rule.
Below is a list of FIRE book summaries for some of the most impactful reads of the FIRE movement – some new, some classic.
While many of the books contain the same common principles, each author has their own take
We summarized some of the key ideas from each of the books below. Our hope is that you can get a sense for the different flavors of the FIRE movement by reading these key ideas, and then go deep on the ones that you find most compelling.
Enjoy!
FIRE Book Summaries
1. Retire Before Mom and Dad
August 2019 – By Rob Berger
Key Ideas from Retire Before Mom & Dad
- This book is accessible and sums up many of the great FIRE concepts in an easy read
- Retirement is not just for the rich
- Freedom first, lattes second – Skip your daily latte, put the money in savings, and you'll have over a million dollars in 45 years
- There are 7 levels of financial freedom, the highest of which is getting to 25 years of expenses saved (referred to as the 4% rule in so many other writings)
- Break up your financial goals to make progress easier
2. Set for Life (Classic)
April 2017 – By Scott Trench
Key Ideas from Set for Life
- Live in a frugal way to create opportunity for yourself
- Start by saving $25,000 in savings that can be used for opportunities when they arise
- From $25,000 – $100,000 – Minimize housing costs by hacking (finding ways to live for free, especially when you can have others buy the home for you with their rent)
- From $100K – Financial Independence Long commutes suck the the free time and wealth out of your life
- Award preference to real assets (things that generate real value) vs. false assets
- Get away from selling your time and seek out work where you are rewarded for performance
- Time is metric you should be tracking
- Manage your habits closely – wasteful habits work against you
3. The Simple Path to Wealth (Classic)
June 2016 – By JL Collins
Key Ideas from The Simple Path to Wealth
- Financial independence shouldn't be associated with retirement
- However, you need to set long term goals and stay the course
- Financial independence is as much about lowering your expenses as earning more money
- Be wary of debt, even if it appears to be for good purposes like college or a mortgage
- Saving $2,000 a year for 30-40 can amount to more than $1 million in savings
- You can't time the market
- Spread investments across stocks, bonds, and index funds
4. The Automatic Millionaire (Classic)
December 2016 – By David Bach
Key Ideas from The Automatic Millionaire
- You can get rich without making a lot of money
- Pay yourself before you pay others – Set up automatic payments to savings accounts
- Small adjustments can have a big impact over time – $10 a day in savings can become $2M in 40 years at a 10% interest rate
- Stop renting, become a homeowner, and avoid credit cards
- Automatically donating to charities can help you feel rich while your fortune accumulates
5. Financial Freedom
February 2019 – By Grant Sabatier, Founder of Millennial Money
Key Ideas from Financial Freedom
- 7 levels of financial independence starting with knowing where you are and where you want to go
- Maximize both your earnings and savings
- Negotiate to make your 9 to 5 job work better for you
- Multiple income streams are critical – do side hustles you enjoy doing
- Invest in index funds with low fees
6. Total Money Makeover (Classic)
September 2013 – By Dave Ramsey
Key Ideas from The Total Money Makeover
- A financial crisis could happen suddenly and you must be prepared
- Create a sense of urgency with regard to financial security
- Becoming and staying debt free is the best way to build wealth
- The first step to financial security is to set a goal and create a $1,000 emergency fund you set aside for a rainy day
- Next, start paying off your debts one at a time, starting with the smallest first
- Next, you should start to grow your emergency fund to provide for 3 then 6 months of expenses
- Next, begin investing in mutual funds to start saving for retirement
- Create a plan for your children to go to college debt free – via scholarship or savings
- Next, pay off your mortgage sooner rather than later
- Grow your wealth, but spend what you can afford
7. Quit Like a Millionaire
July 2019 – By Kristy Shen and Bryce Leung
Key Ideas from Quit Like a Millionaire
- Money isn't the root of all evil; in fact, it is important to living a life of meaning
- Don't follow your heart, follow the math
- The rule of 72 – divide your interest rate on an investment (or debt) by 72 and that tells you how many years it will take to double it
- You must do whatever is necessary to eliminate your debt
- Avoid consumerism – Experiences > material things
- Buying property is risky
- The Rule of 150 – Multiply your monthly mortgage cost by 150% – if higher than your rent, don't buy a house
- Index fund investing allows you limit risk while preserving return
- How soon you can retire is more about your rate of savings vs. how much your make
- Your annual retirement costs can equal 4% of your “nest egg” – choose a lifestyle to choose how soon you can retire
- Eliminate debt to grow your wealth
8. Work Optional
February 2019 – By Tanja Hester
Key Ideas from Work Optional
- Define your work-optional life and have a clear mission statement
- Spend less than you earn to allow you to invest
- Simple concepts to keep track of your net worth, spending
- Setting goals for current spending level (how much you can save) and future spending (how much you need to save)
- You don't need to beat the markets or be lucky to grow your wealth by investing
- Once you have your savings maximized, focus on increasing income
9. Choose FI – Your Blueprint to Financial Independence
October 2019 – By Chris Mamula, Brad Barrett, and Jonathan Mendonsa
Key Ideas from Choose FI
- Start with Your “Why?”
- Become a valuist by aligning your spending with your values
- Develop a growth mindset
- Spend Less to maximize your savings and reduce the time needed to retire
- Creating a greater spread between what you earn and what you spend is the key to rapid wealth accumulation
- Sharing your living space (House Hacking) is a powerful tool in your arsenal
- Controlling food costs can also have a massive impact on your burn
- Only buy insurance when you can't afford to take the risk yourself
- Services people take for granted like Cable TV and phone plans are a major expense – if you don't cut these outright, consider a discount mobile phone plan
- It is possible to save hundreds of thousands of dollars in taxes over your life
- Earn More – Hack college, invest in your career, build a network
- Invest Better – Invest in index funds, real estate, building businesses
We have few free copies of the books above that we can give out.
If you're interested, share a bit of your story and drop an answer to the following questions in the comments below for your chance to win. We'll announce winners soon!
Questions
- At what age are you aiming to retire?
- What principles of the FIRE movement are you applying in your life that you feel are most helpful towards hitting that goal and where did you learn these?
Thanks! And, good luck!
2 Comments
I like the frugal aspect of FIRE & have been working hard to decrease costs. My wife & I also use auto transfers to pay ourselves first. I’ll have to look for these books at the digital library. Your website is inspirational. Thanks.
That’s great to hear Jack! I love the idea of “paying yourself first” when it comes to savings and we also apply that idea in our home. Our posts on the Two Checking Account budgeting system touch on this idea.