NORFOLK, Va. — How does retiring early and being financially independent sound? Well, it's happening for many millennials who are a part of the FIRE movement.
Like many of us, Vincent Montoro was taught the importance of saving money.
"From a very early age my dad said, ‘hey save as much as you can early on,’" he said.
Now, that way of life is becoming increasingly popular among millennials.
"My goal is to be able to retire probably in my 40s but actually stop working in my mid-50s."
That movement is known as FIRE.
FIRE stands for Financial Independence Retire Early. Basically, FIRE investors, like Montoro, are trying to save as much money as they can now and retire at an early age.
"What stuck in my mind was millionaire by 40," says Montoro.
Dr. Andrew Cohen, a finance lecturer at Old Dominion University, says the FIRE movement first popped up in a book in the early 90s. Then gained popularity as more people got online.
"The pandemic kind of further accelerated the movement by people enjoying having the freedom to do what they want and not be stuck in an office from 9 to 5," said Cohen.
He says the theory is to try to save 50% to 70% of your income.
"People realize, you know, what’s the point of working so hard all your life to then wait until you get really old when you don’t have the energy to enjoy your money and wealth."
34-year-old Montoro has worked with ships for most of his career. He says he loves what he does, but that doesn’t mean he’s not working towards retirement now.
"I’m saving as much as I can, as early as I can, to be financially free before the average age of retirement, 62, 67," he said. "My plan for me is I want to retire and enjoy life way before that."
He says if you have the means to start saving, it’s simple.
"All you need is time and a plan."
Cohen says it’s all about being smart with your money and investing.
"When you work, it’s important to put as much money as you can in your 401K, in your retirement savings," he said. "You want to save aggressively. You need to cut down your expenses and be frugal."
Cohen says a big part of it is living a simpler life.
"Not to be extravagant, so a lot of it depends on your personality."
Montoro says he’s on the right track with half a million dollars in his retirement fund already.
"I like to splurge too, don’t get me wrong. I like my pumpkin spice lattes, I love my Starbucks," he said. "I think there has to be a balance where you can enjoy that, but also see where your money is going."
Of course, being able to save a lot of money is not a reality for everyone, but Cohen says setting yourself up for success is still an option.
"As soon as possible start saving, putting it in a retirement fund, whatever you can afford. Obviously, take care of your needs. Make sure you have enough money to pay your rent and get your food."
Both Cohen and Montoro say having that financial independence is freeing.
"So, if you start in your early 20s, by the time you’re in mid-late 30s, 40s, that will have doubled and doubled again," Cohen advised.
"If you’re just patient, stay the course, adjust your lifestyle to that to the mentality of saving every penny that you can at that moment, I think that will definitely be better for the long run," said Montoro.