The FIRE is spreading and by that, we mean the Financial Independence, Retire Early movement. This movement is being followed by those who are tired of the basic nine to five type of work and want to be able to retire early. Here are answers to some of the questions you may be asking to help you decide if FIRE is right for you.
What does this mean?
The FIRE movement believes that with heavy savings, downsizing your lifestyle and investing you can retire early and still have a secure future. People used to have to wait to retire till they’re later in their lives but with FIRE it is becoming possible to retire earlier. The goal is to have a total net worth that is 25x your annual expenses when you retire.
Why are people doing it?
People with hard jobs are turning to the FIRE movement as a chance to retire early and get out of these jobs. Some are not even retiring but are just trying to get out of the nine to five lifestyle and want to experience other opportunities. Some choose to get another job that they are passionate about but that doesn’t pay as well or just have a more relaxed schedule where they can pursue any passion.
Why isn’t everyone doing it?
You may be asking yourself if it is so great why isn’t everyone doing it? Although it has its benefits the type of discipline it requires is not for everyone. You have to commit to saving money and cutting corners on some aspects of your lifestyle. It is hard for some to find the good balance of being conservative with their money without going overboard and decreasing their quality of life. You also need to know a lot about investing and how to get the most out of what you invest and have strong financial literacy.
How do I start?
This may seem like a lot of work but if you get started on the right path it can be a lot simpler. The first step you need to take is figuring out a plan for the next couple of years. This includes the salary you plan to be getting and for how long you plan to work before you retire. You also need to figure out how much money you will need to have saved in order to live the lifestyle you want when you retire. Once you figure all this out it is time to start saving. Keep track of your spending and expenses because it is easy to spend too much money without realizing. Start to look into low-risk investments and decide what is best for you. Finally, let your family know your plan, this will take a lot of work but with the help and participation of your family, it will not be as hard of a commitment.