F.I.R.E stands for Financial Independence Retire Early. The goal is to retire from traditional employment at a much earlier age than normal so that you can spend your time doing what you would like to do.
What is F.I.R.E?
The aim of F.I.R.E is to intentionally save and invest a large portion of your income at a rapid rate. Forget retiring at 65, some people are looking to retire at 40 or even in their 30s! Depending on your income and expenses you could be saving up to 75% of your income in savings and investments. But just like any other lifestyle choice, the F.I.R.E movement can be adjusted to your own set of circumstances and you can adapt the ideas to fit your own version. For example, you may be on a lower income and can only put a smaller amount towards savings each month. Or maybe you want to keep working after you officially leave your job, for example on a side hustle, so can retire earlier as you will still be bringing in some income. Whatever your circumstances you can still be part of the F.I.R.E movement.
Have Your Why
Before you embark on your own F.I.R.E journey really consider why you would like to retire early. What are you planning on doing when your retire? Be specific and don’t just have a vague idea of spending your days on the beach doing nothing. Knowing why you are doing this plan will keep you going when things get difficult or you start to compare your journey to someone else’s.
Make a Plan
Make a detailed plan on what your income and expenses are now and what they are likely to be in the next few years. Look at savings, investments, and the debt you have right now. Decide what age you would like to retire and plan the necessary steps for you to get there. If you have a significant other make sure that you are both on the same page with your retirement plans. You both don’t have to want to retire early but you will both need to be happy with how you intend to save and invest your money. Create a budget and review it regularly.
Save More Money
You will need to save as much money as you can in order to retire early. Decide how much you want to put away each month and how you will invest it. Easy ways to save money are cutting back on daily expenses such as takeaway foods and drinks. These little costs really do add up. You will also need to consider what subscriptions you have and if they are necessary.
Increase Your Income
You may want to consider increasing your income by taking an additional job or creating a side-hustle. If you are looking to pursue a passion project upon your retirement then this will be a great way to get started. You could also try and increase your income at your job by working at getting a pay rise.