Conway also points out the importance of having access to your money. “There’s often mention of having a ‘bridge’ account that allows you to withdraw money and that doesn’t have tax implications around withdrawing from retirement accounts or collecting Social Security,” she says. “If you retire at 50, but you can't withdraw until you’re 59½, do you have nine years of expenses in an account you can pull from without penalty? If not, you need to factor that in. So, it's not just the amount you have saved but the access to the money too.”
Admittedly, most people can’t afford to live on 30% to 50% of their income. Mortgages, car payments, groceries — salaries generally go toward these very real expenses. But the idea of living below your means and then making that surplus, however small, go further by investing, that is the takeaway that can be adapted to individual situations to achieve individual goals.
Not surprisingly, there are variations on the FIRE approach. High earners with six-figure salaries may save and invest aggressively without living as frugally. Those who earn less may find ways to live more simply and save the rest. There are even people, Investopedia.com notes, who operate on a barista FIRE model: They use a combination of savings and part-time work to get health insurance while living on a shoestring.
In true millennial fashion, the people living this dream have their own portmanteau: finfluencers.
Whether they post articles or share their portfolio progress on dedicated investment platforms (more on that later), finfluencers are helping drive this bigger movement toward building potentially less wealth for use earlier in life.
But there’s a catch. As with any influencer on social media, finfluencers should be considered with a certain level of skepticism. On the one hand, they can suggest possibilities worth exploring and researching (such as finding ways to earn or save more money), but they’re not always qualified to offer investment advice. In fact, they’re often not qualified at all outside of anecdotal success stories.
As California’s Department of Financial Protection & Innovation notes, finfluencers “often don’t have the experience or qualifications to guide people on what’s best for them.” They may also neglect to share when a piece of advice is actually sponsored by a company.