International Financial Independence Awareness Day Date in the current year: April 25, 2024

The term “financial independence” refers to a state where one has accumulated sufficient financial resources to cover their living expenses and maintain their current lifestyle without having to work. These resources may include passive income, investments, inheritance, income from side jobs, pension/retirement funds, etc.

In the 2010s, a lifestyle movement called FIRE (Financial Independence, Retire Early) started to gain traction among millennials. The main ideas behind the movement were first described in the books Your Money or Your Life by Joe Dominguez and Vicki Robin, first published in 1992, and Early Retirement Extreme by Jacob Lund Fisker, first published in 2010. According to these books, the basic template for achieving financial independence is embracing a simple living lifestyle while accumulating passive income from investments.

Some proponents of the FIRE movement follow the 4% rule and the rule of 25. The 4% rule is a rule of thumb for safe withdrawal rates from retirement savings. It means that a person can withdraw up to 4% per year from their retirement portfolio containing a mix of stocks and bonds without fear of outliving their money. The rule of 25 is used to calculate the amount of the portfolio, which is 25 times your annual expenses.

These rules are by no means perfect; in fact, they have been criticized for a number of reasons such as not being tested for early retirement scenarios or in stock markets outside the United States, not taking into account stock market volatility and hypothetical scenarios such as hyperinflation, and being “only for the rich”. However, no one claims that you should follow them religiously; what you should do is think about the future and make financial plans for your retirement.

International Financial Independence Awareness Day, codified as 4/25 Day, was inaugurated in 2019 to educate the general public about the 4% and 25 rules and encourage people to work for achieving financial independence. Although its official X (Twitter) account has been inactive since the inaugural celebration, the holiday lives on.

Even if you do not intend to follow the 4/25 rule, International Financial Independence Awareness Day is a great occasion to assess your financial situation and set some financial goals. Note that these goals do not necessarily have to do anything with retirement; you can resolve to save a certain amount of money for a dream vacation or home renovations, pay off your student loans, etc.

Other ways to celebrate include researching additional sources such as turning your hobby into a side hustle, attending a financial literacy workshop, trying different budgeting apps to find the one that works best for you, and sharing your budgeting tips and tricks on social media to promote financial literacy and responsibility.