REDE (Retire Early, Do Everything) FIRE

In the world of the FIRE (Financial Independence, Retire Early) movement, one approach is rapidly gaining attention: REDE, which stands for Retire Early, Do Everything. This variation of FIRE is particularly attractive for those who want to achieve financial independence quickly, enabling them to pursue a wide range of passions, projects, and life goals without the constraints of a traditional 9-to-5 job. REDE is all about living life on your terms, using the power of financial freedom to explore everything you’ve always dreamed of, whether it’s traveling the world, starting a new business, or devoting time to creative projects. But like any FIRE strategy, REDE comes with its own set of challenges and considerations. In this post, we will explore what REDE is, how it works, and why it might be the right fit for your path to financial independence.

Key Terminology

  • FIRE (Financial Independence, Retire Early): The broader movement that encourages individuals to save and invest aggressively to achieve financial independence and retire early.
  • REDE (Retire Early, Do Everything): A specific FIRE strategy that prioritizes reaching financial independence as quickly as possible to allow individuals the freedom to pursue a variety of personal interests, hobbies, projects, and life goals.
  • Financial Independence (FI): The point at which you have enough wealth to support your living expenses without needing to work for a salary or wages.
  • Early Retirement: The process of retiring from your primary career before the typical retirement age (usually in your 30s or 40s) through aggressive saving and investing.
  • FIRE Number: The amount of money you need to accumulate to be financially independent. This is typically calculated by determining your desired annual expenses and multiplying that by 25 (based on the 4% rule).

What is REDE?

REDE (Retire Early, Do Everything) is a FIRE strategy that seeks to maximize both financial independence and the freedom to pursue a diverse range of activities and interests after achieving that independence. Unlike more traditional FIRE strategies that emphasize retiring early to spend time in leisure or focus on passive income, REDE emphasizes a lifestyle of exploration, creativity, and active engagement in multiple areas of life. The goal is to build enough wealth quickly to retire from a conventional job and open up the possibility of doing everything you’ve ever wanted—whether that’s starting new projects, building a side business, traveling extensively, or engaging in lifelong learning.

The key to REDE is not just retiring early, but doing so with a sense of purpose and passion. You’re not just stepping away from work; you’re creating space in your life for meaningful pursuits that truly fulfill you.

How Does it Work?

REDE works by focusing on a fast-track approach to financial independence, allowing you to retire early and use your time to explore your interests. The strategy typically involves aggressive saving, high investment returns, and a commitment to living frugally until you reach your financial independence goals. Here’s a general breakdown of how it works:

  1. Aggressive Saving: Similar to other FIRE strategies, REDE requires a high savings rate. Typically, REDE practitioners aim to save 50% to 70% of their income, aggressively cutting expenses and maximizing income streams.
  2. Maximized Investments: REDE practitioners often rely on investment vehicles such as index funds, real estate, or other high-return assets to grow their wealth quickly. The idea is to let investments compound over time to accelerate wealth accumulation.
  3. Financial Independence (FI): The primary goal is to accumulate enough assets to reach financial independence as soon as possible. For REDE, this means having sufficient passive income to cover your desired lifestyle without relying on earned income.
  4. Freedom to Explore: Once you reach FI, the next step is to use your newfound financial independence to pursue a wide range of life goals and passions. This can include anything from traveling the world, creating a startup, learning new skills, volunteering, or simply living life on your own terms.
  5. Diversified Passions: REDE encourages the idea that financial independence allows you to do everything, rather than just focusing on one passion. You’re free to explore a variety of interests and projects without the constraints of a traditional job.

How Does This Differ vs Other Variations of the FIRE Movement?

While REDE shares similarities with other FIRE strategies, it differs in several key ways. Here’s how REDE stacks up against other FIRE variations:

  1. Traditional FIRE: Traditional FIRE focuses on achieving financial independence with the goal of retiring early and living comfortably on passive income. However, this often implies a simpler life without the need for ongoing projects or active passions. In contrast, REDE is more about pursuing many life goals, projects, and interests, rather than just retreating into early retirement.
  2. Lean FIRE: Lean FIRE advocates for living frugally with the smallest possible expenses in order to retire early. REDE, on the other hand, is not solely about cutting expenses—while frugality still plays a role, it emphasizes more freedom in how you choose to use your time post-FI. Lean FIRE might require stricter budgeting to minimize expenses, while REDE may allow for more discretionary spending, provided you can achieve a fast track to independence.
  3. Fat FIRE: Fat FIRE is a strategy that aims for a larger retirement portfolio to support a more luxurious lifestyle after early retirement. While Fat FIRE focuses on living a more comfortable life with higher spending power, REDE focuses on maximizing life’s possibilities by giving you the freedom to try many different things, with less emphasis on maintaining high expenses.
  4. Slow FIRE: Slow FIRE is a more gradual approach to achieving financial independence, often taking decades of saving and investing. REDE differs by aiming for financial independence quickly, allowing practitioners to retire sooner and engage in multiple activities or projects. REDE is a much faster route to independence compared to Slow FIRE.

What Are the Pros and Cons of REDE?

Like any FIRE strategy, REDE comes with its own set of advantages and challenges. Here’s a breakdown of the pros and cons:

Pros of REDE:

  1. Freedom and Flexibility: The biggest benefit of REDE is the ability to retire early and explore various interests, passions, and life goals without the constraints of a traditional career.
  2. Diverse Life Experiences: By prioritizing “doing everything,” REDE allows you to experience a wide range of activities, from traveling and starting businesses to pursuing creative projects.
  3. More Meaningful Living: REDE can help individuals design a life that’s aligned with their values and passions, instead of being confined to a single career path or lifestyle.
  4. Reduced Stress: Reaching financial independence early means you have more control over your time, which can reduce the stress and burnout often associated with a traditional work schedule.

Cons of REDE:

  1. Aggressive Savings Requirement: Reaching REDE requires aggressive savings and investing, which might not be sustainable for everyone, especially if living frugally is not appealing.
  2. Risk of Burnout: While the idea of doing everything sounds attractive, it can lead to burnout if you try to take on too many projects or interests at once.
  3. Uncertainty in Investment: REDE heavily depends on maximizing investment returns. If the market doesn’t perform as expected, it could delay financial independence or require adjustments to lifestyle expectations.
  4. Pressure to Be Productive: REDE doesn’t just focus on retiring to relax; it encourages pursuing many life projects. For some, this might create pressure to stay constantly productive, which can be stressful.

Best Practices or Tips for REDE

To successfully follow the REDE path, here are some tips to help you achieve financial independence quickly while pursuing a wide range of passions:

  1. Aggressively Save and Invest: To retire early and do everything, it’s important to prioritize saving and investing at a high rate. Set up automatic transfers to your savings and investment accounts and focus on high-return investment strategies like index funds or real estate.
  2. Be Clear About Your Life Goals: Identify what “doing everything” means for you. Whether it’s starting a business, traveling the world, or pursuing creative hobbies, clarity about your passions will help you make intentional decisions about your time and money.
  3. Track Your Progress: Monitor your savings, investment returns, and progress toward your FIRE number. Use tools like personal finance apps or spreadsheets to keep track of your financial goals and ensure you’re staying on track for early retirement.
  4. Maintain a Balanced Approach: While REDE encourages doing many things, it’s important not to overcommit. Balance your personal projects and activities to avoid burnout and ensure you’re focusing on what matters most to you.
  5. Prioritize Financial Independence Over Materialism: REDE is about freedom, not accumulating material goods. Focus on building wealth to achieve financial independence rather than on buying things you don’t need.

Links to Posts

By following REDE, you can retire early, pursue your passions, and design a life that’s truly fulfilling—without being confined to traditional work or a set lifestyle.