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By Jean Chatzky

How would you like to be able to abandon your day job somewhere in your late 30s or early 40s, to pursue a passion that – perhaps – doesn’t pay as much, maybe even doesn’t pay at all?

More and more people are saying “yes” to that question as part of the FIRE movement. FIRE stands for Financial Independence Retire Early. It involves saving huge chunks of your income for as many years as it takes to sock away enough to live comfortably (though usually not lavishly) on the proceeds of those savings when invested. And to do it much earlier than your parents retired – even if your parents retired “early.”

“I think all of us kind of understand the golden years are the years that you're allowed to do everything that you've really wanted [because at that point] society has kind of given you the permission to go do that, FIRE expert Jonathan Mendonsa, explained recently on the HerMoney podcast.

“But I was on a cruise ship recently and it was filled with individuals that were finally getting a chance to pursue all their passions or their dreams. Frankly in many cases, they were too old to actually leave the ship.” FIRE proponents are choosing differently, said Mendonsa, who also co-hosts the ChooseFI podcast. They are saying “I don't just want my golden years … I want my best years.”

If this sounds like something you want to know more about – or maybe even pursue – here’s what you need to know.

The FIRE math

Although traditional retirement calculations are based on accumulating a multiple of your current salary – Fidelity Investments, for example, suggests amassing 1x your current income by age 30, 3x by 40, 6x by 50, 8x by 60 and 10x by the time you retire – FIRE math is based upon replacing a multiple of your current expenses (more on that in a moment) and asks that you replace 25x that number before you quit your day job. If your expenses are $40,000 a year, that’s $1,000,000 total. Why 25x? It’s actually the inverse of the 4 percent rule which argues that as long as you withdraw no more than 4 percent of your retirement nest egg each year, your money should go the distance – and you shouldn’t run out.

How do you get there?

Still, for most people saving a cool million could take decades. How do you get there more quickly? By increasing your savings rate, explained Brad Barrett, Mendonsa’s ChooseFi co-host. “If you’re saving 1 percent of you income a year, then it takes you 99 years to replace one year of expenses,” he said. “If you can save 25 percent of your income, you’re going to need to work three years to replace one year of expenses. But if you can get up to that kind of magical 50 percent saving rate, essentially one year of savings gives you one year of freedom.” Do that consistently for 10 to 15 years, while investing your money and allowing it to compound, and you essentially built – in his words – “a perpetual moneymaking machine that with some reliability can fund your lifestyle for the rest of time.” It’s not get rich quick, he pointed out. It’s get rich quick-ish.

Expenses are easier to control than income

The FIRE movement, at least as it’s practiced by many people, has a touch of embedded minimalism or simplicity. Proponents aren’t aiming for lavish lives as much as they are comfortable ones. That may require re-thinking things that absorb a big part of your cash flow – like where you’re going to live. Spending $40,000 a year might sound absurd for someone in Manhattan or San Francisco, Barrett noted, but where he lives in Richmond, VA, it’s not unrealistic.

Other expenses, too, are something that you can control as long as you pay attention to them. “Our first piece of advice to everybody is jot down your expenses,” Mendonsa said “Just create a simple Excel sheet and just see where the money is going. So to me that's the starting point.”

Work is optional

Finally, it’s important to point out that a lot of people who have (or will) retire early, thanks to FIRE, plan on continuing to work. For pay. Very few people who have wherewithal to reach financial independence are just up and quitting and sitting on their couch and watching Netflix for the next 50 years,” said Barrett. “That's just not the way the world works. So it's about redefining what you want your life to be and to actually choose how you spend your most precious resource, your time, as you see fit. And to me that's just incredibly empowering and liberating.”