FIRE Movement – The financial move
Guess what? You don’t have to hit 65 to retire anymore! The new wave of young people has proven that you can retire earlier. We are talking about retiring in your 30s and 40s. There’s even a movement with the acronym FIRE, which stands for financial independence retire early, designed for this sole purpose. However is it possible to retire at 30 or 40? Well, let’s dive into the fire movement and find out.
What is it?
Financial Independence Retire Early is a movement that focuses on extreme saving and investing to retire earlier than traditional methods would allow. FIRE movement investors aim to attain financial freedom early, allowing them to choose how they spend their time.
According to the FIRE movement, you must save 50-75% of your income to retire early. To save this much money, you’ll need to keep your expenses low and look for other ways to boost your income. The higher your income and the lower your costs, the faster you reach your financial goals.
Why do it?
Positive spending habits
At its core, the FIRE movement’s purpose is to eliminate overspending and instill discipline and planning by saving over 70% of income. It also involves implementing the most vital wealth creation principles, such as sticking to a budget, diversifying income streams, paying yourself first, and living within your means. Whether you achieve the FIRE goal or not, life lessons are essential.
Overspending on credit cards is an easy trap to fall into. Impulse buying and spending money on things that won’t give you returns is usually the order of the day. But the FIRE movement helps you keep track of your spending.
More years to enjoy life
Retiring early means more time to enjoy life with family and friends. A financially stable life means more time to do things that bring joy to you. Most people who join FIRE choose the value of time rather than money. If you prefer spending time working, then the FIRE movement isn’t for you.
Motivation to work now
The promise of a work-free weekend is enough to keep us through Friday at work. With the FIRE movement, the preposition of financial freedom for the rest of your life is enough motivation to work hard today.
Living debt free
Remember to consider the psychological strain that comes with debt. Refinancing debt requires a steady income and can be stressful, especially for people without stable incomes. The FIRE movement doesn’t encourage debt. Instead, it seeks to save more than spend.
When should we get started?
Starting early gives you a significant advantage, mainly due to the power of compounding. Start in your early 20s. However, if you are above thirty, you’ll need more aggressive savings than someone who starts in their early 20s.
FIRE requires vigilance and continuous discipline. If you struggle with the two, then FIRE isn’t for you. However, FIRE focuses on increasing incoming cash and reducing outgoing money. Investing and saving the difference will help you attain financial independence early and retire early, giving you more time to enjoy life.
It’s worth the sacrifice!
