How I Plan to Retire by 40

Okay, so I know this sounds completely insane, but I recently stumbled upon this video on ET Money’s YouTube channel titled “How To RETIRE EARLY In Your 40s Using The F.I.R.E. METHOD?” and… my brain is still processing. Like, is it actually possible to stop working forever while you’re still young enough to backpack across Europe or binge-watch Netflix guilt-free at 40? Turns out — it is.

Let me break it down for you, teenager to teenager (or, like, teenager to anyone with a soul-crushing 9–5 job they dream of escaping).

What the FIRE is “FIRE” ?

No, it’s not about setting your paycheck on fire. FIRE stands for Financial Independence, Retire Early. It’s this wild but brilliant idea where you don’t wait till 65 to retire. Instead, you save like crazy, spend smart, and invest wisely so you can live off your investments by your 30s or 40s. Sounds impossible, right? That’s what I thought too —until I learned how it actually works.

Where It All Started

The FIRE movement started from a book called “Your Money or Your Life” by Vicki Robin and Joe Dominguez (yeah, old book, but still relevant AF). Basically, they were like: “Do you want your life back from the job that’s draining your soul?” And a lot of people were like: “YES.” So the FIRE lifestyle was born.

People like Pete Adney (aka Mr. Money Mustache) took this super seriously. He retired at 30, just by living frugally and investing in stock market index funds. Now he gives advice to people on how to do the same, and honestly? It’s kind of inspiring.

The FIRE Formula: Save More. Spend Less. Invest Smart.

So how does FIRE actually work? It’s based on 3 main steps:

1. Save 50–70% of your income. Sounds impossible, but not if you’re creative with how you earn and budget.
2. Live frugally. Not like “live in a cave” frugal, but cutting unnecessary stuff. Used car instead of a Tesla. Homemade food over Zomato splurges. Stuff like that.
3. Invest in low-cost index funds. Put your money to work in places where it can grow — like the stock market. (Don’t worry, you don’t need to be Warren Buffett. There are tools that help, like ET Money’s Genius.)

The 4% Rule — Your FIRE Magic Number

There’s this thing called the 4% rule. Basically, if you retire with Rs.5 Crores, you can take out 4% every year (that’s Rs.20 Lakhs annually) and theoretically never run out of money.

You flip that and it means — if your yearly expenses are Rs.10 Lakhs, then you need a Rs.2.5 Crore retirement fund to make FIRE work. Sounds huge, but if you start early (like now), invest smart, and keep expenses low… it’s totally within reach.

My Favorite Tip? Passive Income is the Real MVP

The video also talked about passive income — money you earn without working every single day for it. Think: blog revenue, YouTube, rent, dividends, etc. The FIRE crowd LOVES this stuff.

There’s even something called the FI Ratio — it’s the percentage of your monthly expenses that are covered by passive income. If it hits 100%, you’re financially independent. Imagine your money making money while you sleep. Literal dream.

A Real-Life Example (That Isn’t a Tech Bro)

One story that really got me was about this guy in India — a data scientist by day, and a machine learning educator by night. He started teaching online courses and doubled his income. His savings went from 20% to 70%. Like bro, that’s actual FIRE. He didn’t win a lottery. He just worked smart.

Why This Hits Hard (Especially for Gen Z)

Honestly, our generation isn’t buying the “study-hard, get-job, buy-house, retire-at-65” formula anymore. We want freedom. Time. Adventure. Maybe even a little rebellion against the system, you know?

FIRE isn’t about quitting life. It’s about retiring to something, not from something. Whether that’s starting your own business, traveling, spending time with family, or just vibing — it’s your choice.

Final Thoughts From a 21-Year-Old Dreamer

Look, I get it. I’m not earning yet. But this video was like a wake-up call. If I start early — learn to save, invest, and think beyond just “getting rich” — I could actually design a life I love. Not one where I have to work, but where I choose what I want to do.

So yeah, maybe FIRE isn’t for everyone. It takes effort, sacrifice, and a bit of nerdy math. But for those of us who dream big? It’s worth a shot.

Now excuse me while I go calculate how many samosas I’ll have to give up to retire by 40