Many people dream of winning the lottery or getting a large inheritance from a distant family member that would allow them to chuck in their job or just choose to do something they want to do rather than focus on earning money.

But a small and growing group of New Zealanders are aiming to do that without the one-off windfall by following the global movement called FIRE or Financial Independence, Retire Early.

Nick Carr, a Wellington-based operations manager, came across the idea three years ago after having a back injury which forced him to be out of work for six months.

"I was on ACC but that only covered 80 per cent of my income and at the time I was living off 100 per cent."


"That 20 per cent shortfall was a bit of an eye-opener."

So he started to look for answers.

Now the 38-year-old is saving around 40 per cent of what he earns and plans to become financially independent within 10 years.

"Since my injury it made me realise how dependent I was on myself going to work. I want to live life on my own terms."

He doesn't dislike working but says he doesn't want to give the best years of his life in exchange for dollars.

"I would rather my money work for me than work for the dollar. It's not necessarily about retirement."

He says he may take up a lower paying job at 45 or work fulltime on a business he has already started.

Carr, who had his first child this year, says it's also about spending more time with family.


"I don't want to miss out on the growth of my young daughter. I want to walk her to school."

He wants to be involved in his daughter's school sports and the board.

"Which if I had a fulltime job might be a struggle."

The aim of people who follow FIRE is to both decrease what they live off and increase their savings with the aim of getting to a point where they have saved 25 times their annual spend.

Carr reckons he hasn't had to give up much to be able to save 40 per cent.

"I haven't had to give up much at all. I know people who have cut out all [bought] coffees. I have focused on the bigger stuff. Housing has been a saver."

The aim of the programme is to decrease living expenses and increase savings. Photo/Getty Images.
The aim of the programme is to decrease living expenses and increase savings. Photo/Getty Images.

He used to own a four bedroom house which he bought when he was by himself and says he could only really afford the mortgage by having flatmates.

But he sold that and bought a much smaller three bedroom house in a less desirable area.

The new house was one-third of the price of the last house and it didn't take long to knock off the mortgage.

"One simple move saved me $25k a year on housing costs. If someone can save on housing - that is a big one.

"Not having a mortgage is definitely freeing."

He also saves a lot on transport as his current job includes a car.

"We have cut back to a level where we are not wasting so much but we are not scrimping either."

He also shopped around to cut down recurring expenses like power, internet, and phone.

"I saved thousands a year through making a few phone calls."

But he wasn't always a saver.

In his 20s Carr didn't have anything left over from his pay cheque. He moved home to live with his parents at 27 and then saved for two years for a deposit for an apartment.

Five years later he sold the apartment and used the money gained to buy as big a house as he could get.

That start on the housing ladder was a big leg up for Carr but not all FIRE followers are home-owners.

Aucklander John* (not his real name) is 24 and doesn't own a home. But he has already saved $100k - one of the milestones FIRE-followers work towards and celebrate.

His decision to looking at FIRE was triggered when he was a teenager.

"It was five or six years ago and I was upgrading my car."

Like a typical 18-year-old, he wanted a car with all the bells and whistles and he began investigating a bank loan to buy it.

But also through his searching, he came across a blog talking about how car debt was the worst debt to take on because cars devalue over time unlike other assets which gain in value.

"It stopped me in my tracks."

He then started to use a budgeting tool to work out how much he could save for a car and realised what he could save in a year was the same as the debt he was about to take on which would take him much longer to pay off.

"It was a bit of a shocker to me"

But from there he began to look a lot more closely at his budget and spending using online tools.

Now he puts aside around 30 per cent of his income on average and sees it as for every five days he works he is paying for one and a half days he doesn't have to work in the future.

He has made a conscious decision that he is not going to work just to pay for his lifestyle today.

"If I am going to work and I only cover my costs for today I am never going to be able to afford to stop working."

He is looking at quitting his day job in IT in another five to 10 years but says there are so many variables he tries not to focus on the age but rather sees his saving as a way of "buying" days off in the future.

"If I focus on it the end goal is too far away."

But he says it is not retirement he is working towards but financial freedom.

He works in IT and says he has questioned the idea that if he didn't need the money would he still be doing the same job.

"Would I be doing this? No I'd probably be working at the SPCA," he says.

He says having $100k in the bank has already changed the way he thinks about work.

"I remember when I first started to work and I was down to the last dollar. I had to go to work to survive. Now it's because I don't want to see that $100k go down."

He invests some of his money in shares through index funds and most of it is in a savings account.

But he doesn't own a house. He belongs to a Facebook group "Kiwi Mustachians" of others who want to set FIRE to their lives and says he is probably one of the younger members.

"I get a lot of comments of wow I wish I had discovered this at your age."

Most are in their late 20s and 30s.

Nick Carr says he doesn't want to give the best years of his life to his job. Photo/Getty Images.
Nick Carr says he doesn't want to give the best years of his life to his job. Photo/Getty Images.

While he admits there is a subset of people who really hate working and are doing it just to quit work most are just actively seeking more freedom and more choices.

"Most people just want a bit more freedom."

If he gets there he says he would choose a job working with people or animals rather than his current job which means he spends all day in front of a computer.

He may study psychology which he says would be a big deal if he didn't have another income.

He says at the moment he feels like he is stuck in a box defined by his job. "I am good at making money by being a tech-geek."

He says others just want more time to spend with family either to be there when their kids are growing up or for their parents as they age.

"I have got a bit of guilt I don't see my nephew or parents as much as I want to - would love to be a bit more of a family person."

He saves 30 per cent of his income but says sometimes it is as low as 5 per cent and other times its 65 per cent.

While he doesn't feel it is as good as some of the others doing FIRE he says it compares well to the average saving for a New Zealander.

"I try and keep it in perspective."

And he doesn't like to share his plans with too many others. "I don't tell too many people."

The reaction is often that he is too naive and things will change once he has a mortgage and children.

But he is taking a hopeful view rather than buying into the pessimists.

Financial adviser Liz Koh likens it to going on an extreme diet.

"It's about cutting out everything that is not essential and finding ways to get what you want without parting with money."

Koh says that can involve a mindset change in what makes you happy.

"It is a major reprogramming of your brain."

She says those who follow it are often rejecting the modern trappings of life and want to return to a more simpler life.

But like those who drop a lot of weight, it requires a huge amount of discipline.

She says it is not for everybody. "But I believe it is doable."

Koh says once people have paid off the mortgage if becomes a lot easier to save and have compound interest working in your favour.

And she believes that is what people should focus on.

"Getting rid of your mortgage as soon as possible that gives them an element of financial freedom."

Koh also cautions against people taking extreme measures to cut back on spending and live frugally.

"Do you really want to live frugally for that long?"

Koh says many people she knows find they have a child who lives overseas when they grow up and it would be tough not to visit.

She also points to other future challenges - like what if you want to use some of your money to help your children buy a home?

"You do have to think about the long-term consequences."

Koh says ideally people would pay off the mortgage by age 50.

"The trouble is most people aren't getting into a house until they are 30. If you get into a home in your 30s paying it off by 50 can be quite a big hurdle."

She says New Zealand's high house prices make aiming for FIRE that much harder.

"The whole house price thing puts a different spin on it in New Zealand."

At the very least Koh urges people stay away from short-term high-interest debt and having a savings buffer is a good way to do that.

She says even those who can afford to retire young don't necessarily want to.

"I do see quite a lot people who have a choice to retire before 65. But most people want to keep working."

"Retirement is a long time if you live to 90. Early retirement isn't necessarily all it is cracked up to be."

She sees some people who once they have got through the honeymoon phase - they have cleaned out the garage and joined the golf club - are not that happy.

Tom Hartmann, personal finance editor at the Commission for Financial Capability, says FIRE is a good thing because it is encouraging people to get more intentional with their spending and make their money work for them.

"It means money is serving our need more as opposed to us serving it."

But Hartmann says it can require re-engineering your life to go without things like a car or thinking about the true cost of something over a lifetime not just the upfront costs.

He gives the example of a lightbulb which can be cheap to buy but vary greatly when it comes to the cost of using it over the longer term.

He says someone following FIRE may look at the running costs over a 10 year period.

"I find that really refreshing."

That same view can be taken for anything including a mortgage which typically comes with a 30-year timeframe these days.

"The way they are structured is entirely in favour of the lender.

But if you pay it off sooner it will save a lot of interest. Money that can be spent or saved elswhere.

"As soon as you start to play with the amount and timeframe suddenly you have much more power."

But he says it doesn't come naturally as human nature tends to make us focus on the present rather than the future.


John reckons tracking your spending is a good way to start. That can either be at a micro level or at a higher level. He uses the Youneedabudget tool.

"A lot of people think budgeting is really restrictive and they can't have fun. But most people find it gives them freedom to do what they want."

And then it is about actively deciding where to spend money. Being aware of your money and having some kind of budget.

Check out blogs like Mr Money Mustache which can give tips and join a Facebook group like "Kiwi Mustachians" to get support from others doing the same thing.


The FIRE (Financial Independence, Retire Early) is a movement whose goal is financial independence and retiring early.

Those seeking to do it aim to increase the rate by which they save their income through simple living or generating secondary and passive streams of income.

The goal is to save an amount for which the interest generated from investments provides enough money for living expenses in perpetuity.

Proponents of the FIRE movement suggest the 4 per cent rule as a guide and set a goal of at least 25 times estimated annual living expenses.

The intention is to allow for retirement from traditional work decades earlier than the standard retirement age.