There is a movement that is bucking the trend. A movement that is rejecting the status quo. It is empowering, enlightening, and it is changing the narrative of the traditional retirement.
If you haven’t heard, the movement is called FIRE or Financial Independence Retire Early. It has created a lot of excitement and some contraversies too.
Money gurus dislike it. Suze Orman hates it. A lot of nay sayers think it is the latest fad. Yet, FIRE continues to overshadow the negativity.
FIRE is a very simple concept. You work hard for 10 to 15 years, save and invest at least 50% of your salary, hit the FI number (25x annual expences), and then retire (if you want to).
If becoming Finically Independent (FI) is that easy, why do millions fail? FIRE requires discipline, frugality, hard work, and luck; but most of all, you have to want it.
The Discovery: How I found the movement.
In December 2016, I was doing research to overhaul my finances. After going through a bunch of articles and blogs online, I stumbled upon Mr. Money Mustache blog (check it out here). For about a month, I was immersed in this blog reading everything from the articles, to the comments, and finally, the forums.
By the time 2017 rolled around, I had a plan and my FIRE journey was ready to begin. I started keeping a financial journal, tracking my net worth, and reading finance related articles on a daily basis.
The Driving Force: Why did I want FIRE?
In 2016, I left a job that paid well for a job and that paid 15% more. I always had a goal of making a certain amount of money annually. The new job gave me that opportunity. Interestingly, instead of celebrating for reaching my annual income goal, I felt a little sad and empty inside.
Here I was, making the most money I have ever made, and I was unhappy. I always thought people were full of it when they would say ‘money is not the answer’. But there I was, confused and searching for the meaning of it all. That is when I decided to change my approach. Clearly, chasing more money wasn’t the cure for my money anxiety. I was still broke.
The Lessons: What I have I learned so far?
- It is not what you make, it is what you keep. You can earn a $1 million dollars, but if you spend it all, you will remain broke. My goal is to save at least 50% of my income annually.
- Fear is a strong motivator. Although my new job paid more, it felt unstable. At any time, I thought I would be kicked to the curb. The uncertainty and the fear I was facing drove me to seek financial stability. Even today, that fear shows up every now and then and helps me stay the course.
- FIRE is not for everyone. A lot of people get hung up on the RE part of FIRE. Retiring early is not the point of FIRE. To me, FI is more important that RE. Financial independence means you have enough money invested that you don’t have to work anymore. Basically, you investments are able to generate enough income to cover your basic needs. But if you love your job, you don’t have to pursue FIRE. You can pick and choose the elements of FIRE that fits your lifestyle and move on.
- Knowledge is the key. Educate yourself; be financially literate. If the person sitting across the table has more knowledge than you, then there is imbalance of power. Learn the basics and the fundamentals – everything else is either an opinion, speculation, or bad advice. By covering the basics, you will be able to identify advisers that will add value to your life and those looking to benefit from you. No one will work harder for your money than you.
- It is the journey that matters: Don’t seek perfection, just seek progress. You will learn and perfect your plan a long the way. Mistakes will be made; but as long as you acknowledge them, you will recover. Take control of your financial life. Do not think you’re a victim or powerless. To make it, you will have to develop new habits; learn to control the emotions, learn to be optimistic, and learn to appreciate what you have.
In the end, FIRE has come to my rescue. It has provided a financial blueprint that I was missing. I have educated myself on the economy, human psychology, and personal finance. I am less stressed about finances and employment compared to life before FIRE. FIRE is not for everyone, but we can all benefit by incorporating some of its elements in our lives.
Before you start bashing or discrediting the FIRE movement, try to understand it and see what you can learn from it. Keep an open mind. People find success in all sought of ways; FIRE is just one of them. If you haven’t found your path to success, maybe FIRE will offer you the foundation. Just keep educating yourself and take action.
Thank you for reading.
