May 3, 2023

5 myths about FIRE busted (Indian context)

We all want to achieve financial independence in our life!

  • That day, when we will have enough money!! 
  • That day, when we will no longer have to worry about our future expenses!
  • That day, when we are out of the rat race finally!

For the last couple of years, we are hearing an acronym FIRE for this!

Myths about financial Freedom

Financial Independence Retire Early (FIRE)

FIRE, or Financial Independence Retire Early, refers to achieving a point in life where you have enough money to cover your expenses and financial goals without having to work for a living.

Ideally, this happens well before the traditional retirement age of 58-60 years. Achieving FIRE means having financial security for your future, as well as the ability to travel well, spend on big-ticket expenses and also leave a legacy for future generations.

At this point, you no longer have a compulsion to actively work to “earn money”

FIRE is a great achievement 

Achieving FIRE is a wonderful accomplishment, but there are many myths that are still there in investors’ minds who have not explored or read much about this topic.

This article will bust some myths around the topic of FIRE for you today.

Let’s start!

Myth 1: FIRE is all about a big number!

Most people feel that FIRE is all about just reaching a target number. Like 5 cr or 10 cr

For those people who are totally new to this concept of FIRE, you shall know that one can call themselves financially free when you have

  • 30X of your yearly expenses – at age 60
  • 35-40X of your yearly expenses – at age 50
  • 45-50X of your yearly expenses – at age 40

* Note that all these are high-level thumb rules only!

For example, if you are at age 50 and your yearly expenses (considering everything in this) are Rs 20 lacs, then you would need 7-8 cr to call yourself financially free (FIRE’d) assuming you will live for another 40 yrs

NO, it’s not about reaching a number, but more about creating X times your expenses, when X can range from 30-50 depending on your age and your ability to invest the money properly.

  • For someone with a Rs 50,000 per month requirement in life, they need roughly 2-3 cr today
  • For someone with a 3 lacs per month requirement and wanting to FIRE at age 40, it would mean a 16-18 cr corpus today!

As you move in life, your expenses will change and hence your FIRE corpus goalpost will also shift!

Myth 2 : Life is all set after FIRE

Contrary to what most people imagine, life is not hunky-dory after you achieve FIRE.

Yes, life is very comfortable and you will surely be less worried than someone who doesn’t have enough money. But still, you have to constantly think about how your money is invested and how it’s going overall and if it will really last your lifetime or not.

This is especially true if you dont have enough margin of safety in your FIRE corpus. So if you do your calculations and Excel tells you that you need 10 cr for all your life, then if you actually FIRE with 10-12 cr, then you are on the edge!

You have very little margin of safety. The inflation can be totally different in future, you may not make exactly the same return on your portfolio, and you may have some totally unexpected life event

All these will still keep your thoughts occupied to some level.

Don’t expect yourself to be chilling on the Goa beaches with Pina Colada after FIRE. Life will be almost be the same for you  minus a lot of money worries

This is of course not true for someone who has multiple times what they truly require for financial freedom.

To learn more about FIRE, you can also watch my video below on various types of FIRE

Myth 3: So many people in India are achieving FIRE, and I am a looser

There is a lot of buzz around FIRE these days. You constantly see people on social media, youtube, telegram channels, and podcasts where the conversation is alive about FIRE.

There are many people who have already achieved FIRE or they are somewhere midway.

This has started putting a lot of “pressure” on millions of others that other than them, everyone is getting financially free these days!

Let me tell you something!

Me and my team have already interacted with more than 5000+ families in the last 10+ yrs in India + NRI and we have not seen more than 5-6 people who have achieved FIRE by the age of 40-45 yrs. I am talking about people who are into regular jobs and have to create their wealth from scratch.

Apart from these 5-6 people, there are dozens of other families who will achieve FIRE by the age 50 yrs, but not in their early 40s.

Rest all others, will at best retire at their regular 58-60 yrs age bracket. In fact, many of them may not even retire properly and may face financial crunch. I am considering the whole population here and not a specific class of people.

Only a tiny minority of people in India achieve financial freedom early in life in our observation now.

In absolute numbers, you will often see many people talking about achieving FIRE but remember that thousands of others are not close to it. In a group of 1000 people, if 2 people talk about reaching FIRE, the rest 998 people starts feeling that it’s a common thing these days

Having a few crores means FIRE?

Also, having a few crores does not mean a person has achieved FIRE.

A person having a nice loan-free house plus Rs 3-4 crores may not have even reached midway of FIRE. They look RICH (and they are) but they are not Financially FREE in the true sense. They have their own share of financial worries and insecurities.

FIRE before 50 yrs of age is a wild achievement, but it’s statistically very rare. Understand that it’s quite TOUGH to achieve and it’s normal to not achieve FIRE. You are surely not missing the FIRE bus, however, you shall give an honest attempt to achieve financial independence as early as possible

Myth 4: Achieving FIRE means never working again

FIRE is “Financial Independence Retire Early

However, most people focus on retiring early part which is often unreal. It’s very tough to not do anything all day and just retire from your job.  Humans are designed for staying busy and be active, to pursue something. People who FIRE actually keep working and dont sit at home.

One of our readers once shared with us that to experience how it feels after retirement, he took a very long break from job (around 2 months) and tried to see what life looks like and soon realised that it’s very tough to spend the day and also withdraw from your corpus for your day to day expenses. He had to return back to the job in 2 weeks as he could not take it.

Now that’s not the best example I could give but it simply gives you a hint that “I am not working again” after FIRE is mostly wishful thinking and mostly comes to mind if you are into a stressful job and dont take enough time to enjoy your life.

Better not aim for FIRE with that mindset.

At best, what will happen is as below

You will achieve FIRE, take a very very long break and then get back into some low-stress job/work which gives you a lot of flexibility and help you explore your hobbies/what you enjoy.

Also, its a good idea to talk to your spouse once about your plans of staying at home all day after FIRE, mostly you will be directed to keep working for a few more years as they won’t be able to tolerate you all day long at home 😉

Myth 5: FIRE requires extreme frugality and deprivation

This is one of the biggest myths in my opinion about FIRE.

A lot of people feel that cutting down on expenses and depriving themselves of the initial years will help them move towards FIRE. After all, what you save will get added to your wealth kitty.

This is not TRUE!

Most of the people who actually reach FIRE early in life are those whose focus is on increasing their INCOME and not those who cut down on their EXPENSES.

Cutting down on expenses has a limit, and truly speaking depriving yourself is not a healthy way to achieve financial freedom.

There are people who earn 5 lacs a month, stay their life in a decent manner in Rs 1 lac and save Rs 4 lacs a month in the right manner with discipline for years. These are the people who mostly FIRE young and not the one who earns a smaller income and is trying to squeeze the expenses a “bit more”

Dont do that!

Cutting expenses beyond a limit will mostly take away all the FUN from your life and add up some extra money in your kitty which eventually you will spend on something stupid again. It will not lead to financial independence.

How financial independence or FIRE is achieved ?

If you are naturally a frugal person and live with a very small amount of money, then it’s fine. But just make sure you dont fool yourself with trying to cut expenses where you truly dont want it.

Aim for Financial Freedom

The mail of this article was to simply present some facts about retirement and clear some myths so that one can pursue financial freedom with the right mindset. Do focus on your income and try to increase it and save a big chunk of that to invest smartly in inflation-beating financial products to create wealth in the true sense!

I have tried to share my personal thoughts and what I feel about the topic based on my experience.

Do share your thoughts about this topic. Have you seen some more myths in the minds of your friends/family about financial independence? Do share in the comments section!

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7 months ago

Well good explanation but

Achieving F.I.R.E doesn’t really mean retiring from what your doing or stopping doing anything. But it means that you no longer needed to work the job that you didn’t like or you did it till now to be financially safer. So, After achieving F.I.R.E, one can focus on his startup or his dream job which financially might not give the earlier income but yet you like it to do. Also like going behind what you like. For example, following your passion of playing Guitar or Developing arts like drawing or anything. Probably that might add revenue when it is made your mainstream. So definitely nobody gets retired even after achieving FIRE as you said. But the truth is one can go after his passion/love/dreams.
Appreciate it though.

11 months ago


Dileep Bhave
Dileep Bhave
1 year ago

As usual, a nice article by Jagoinvestor.

last paragraph in Myth 4 is a hard truth.

1 year ago

Some reflections on myths.

1. FIRE starts with a big number. Without it, there can be no plan. Accepted, it is much more than that.

2. Life is set after FIRE. Well, it is not easy to while away time and one needs to plan what he will do in leisure, beforehand. No work is not an option.

3. Many are thinking of FIRE now and with proper planning, FI at least is achievable.

4. Never work again. – Point 2
5. Extreme frugality – After FI, resources are not unlimited. One needs to keep this in mind and plan things accordingly.

That said, FIRE is an interesting concept to think about and work towards.

Dipak Sholapurkar
Dipak Sholapurkar
1 year ago

Nicely explained about FIRE concepts and the reality of FIRE.