Congratulations if you are reading this you must have paid off all of your debts and have changed the way you spend your money and how you invest it. If you haven’t I would highly suggest you go back and read through the start saving, pay off your debt and investing sections of the blog. Again as mentioned the one thing I want you to take away from my blog is to change your mindset on how to view money. Getting to the retire early stage is the fourth and last milestone on the road map to financial freedom. Until you at least complete both of the start saving & pay off debt sections I would highly suggest turning back and reading up on both before you get to this section.
So tell me what is FIRE!
FIRE is having a moment and it’s not hard to understand given the appeal. Financial independence? Sounds great! Retiring Early? Sign me up! It’s a movement that’s quickly gaining momentum, too. I myself am apart of the movement and I will share with you what it is all about and what it takes to achieve this elusive goal of Financial Independence Retire Early (FIRE).
When you think retirement age, you probably think of someone in their late 50s or 60s, and there’s a reason for that: it’s the norm. The Social Security Administration allows you to start taking benefits at age 62, for example, and you can start withdrawing money from your Individual Retirement Account without a penalty at age 59 ½.
While this is the standard age in which most people start thinking about retirement people who strive for FIRE retire much earlier than this. Usually in their 40s, 30s, and sometimes even in their 20s.
Chances you’re skeptical right now. You’re probably thinking something along the lines of:
“This sounds great, but what if I only make 35k a year and I’m drowning in student loan debt?”
Don’t worry, if you have started to understand my mindset and how I see saving money and thinking of debt as a bear trap attached to your foot that bleeds you out in interest payments while holding you back from financial freedom. You will now be prepared for this more extreme way of thinking and it should be an easy adjustment.
Early retirement is the literal definition of the FIRE, but there’s a much more robust meaning when you start digging into the principles behind FIRE. Namely, it’s about flexibility.
Financial independence ultimately means that you can shape your life without taking money into consideration. Most of us have to consider our finances in nearly every decision we make or maybe even make decisions solely based on money. Once we reach financial independence we get the freedom not to be bossed around by what we earn or what we have saved.
Contrary to the traditional view of retirement. FIRE doesn’t necessarily mean you have to quit your job either. The movement works on a loose, non-traditional definition of what it means to be “retired.” Which is the same way that I view retirement.
It’s less about retiring early and more about having the freedom to pursue your dreams and ambitions. It is the freedom to choose to work or not. Don’t like your job? Fine quit and fly to Thailand and chill in a beach hut for a few months. Want to help out by working for a non-profit that pays you very little but you being apart of it will make a difference? Go for it. You don’t have to worry about money anymore or the lack out it.
I hope after this post you are all FIRED UP! In the next upcoming posts in the early retirement section I will get into who FIRE is it for, the rules behind it and what the first steps are.
If you find that my investing section of my personal finance blog is not for you I still want to help push you towards the right direction so you can check out my Top 10 Early Retirement Blogs of 2018.