F.I.R.E. (Finance Independence Retire Early)

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It started off as a method of significantly reducing expenses and saving as much as possible with the goal of being financially independent before the typical retirement age of 60-65.  It has since grown into a much wider movement incorporating many different types of "F.I.R.E." depending on the person's financial goals and spending habits.

The majority of mortgage professionals do not consider a person's overall living expenses and financial independence goals when offering their products.  They will tell a person how much they qualify for (which is often significantly higher than their budget allows even if they weren't trying to gain financial independence early).  They typically won't even ask about retirement or other financial goals.

Many in the FIRE community also use real estate to help achieve their goals by becoming real estate investors either with "house hacking" strategies or through buying more traditional investment properties.

For people trying to FIRE, mortgage lending done right can be one of the best things you can do to create the necessary wealth while managing expenses.  Done poorly, it can be one of the biggest hurdles to gaining financial freedom.

This is when you rent out part of the home you're living in to help offset your housing expenses.  It is often done by buying a 2, 3, or 4-unit property where you live in one of the units and rent out the rest.  That rental income can be used to help qualify you for that mortgage payment and make that house more affordable by offsetting some of the monthly payment with rental income.

This method has gained a lot of popularity in the FIRE community because it combines creating additional (somewhat) passive income sources through real estate while being able to buy a home instead of renting (sometimes with as low as 3.5% down)

Just like with any real estate, this is not for the faint of heart, so you need to understand your risks.  This is where I can be helpful, so that you know the good and the bad with this strategy because it is not for everyone.

This is far from a comprehensive list because it seems to grow by the day, but here are the main types:

1. Lean FIRE: focuses on cutting spending and living a very frugal lifestyle which allows people to not only save more, but also not require as much in order to gain financial independence.
2. Fat FIRE: this involves reaching financial independence early while not significantly reducing your expenses.  It typically requires a high income to achieve though
3. Barista FIRE: this involves saving enough so that in later years you can work a part-time job instead of fully retiring
4. Coast FIRE: saving and investing aggressively early on so that hopefully the time value of money works in your favor to achieve financial freedom early