Have you heard about the Financial Independence movement? It is often abbreviated as F.I.R.E. which stands for Financial Independence – Retire Early. My belief is that most people generally work most of their life, save around 10% of their income towards retirement, and hope that with Social Security Income they will have enough to get by. The FIRE movement seeks to help people be more efficient with their time and money and give them more confidence and freedom.
There are many potential problems with the normal approach to retirement including unexpected expenses, loss of employment or income, uncertainty about Social Security benefits, Covid-19 etc… Several financial advisers have recently started recommended saving between 20-25% of your income to be in a good financial position at retirement age. How much should you be saving? Are you going to have enough to retire comfortable? What will you do in retirement?
The FIRE movement can help give you direction and answers to these questions. It will show you many ways to reduce expenses and improve your income. It doesn’t matter where you are now, it only matters if you are willing to try some new tactics to improve. Any progress you make along this path, will give you more options. A 1% improvement could make a huge difference in the long run! The FIRE movement isn’t about deprivation, it is about being more intentional with your time and money.
Obviously the higher your savings rate, the more funds you will have at retirement age. This is where some FIRE members have determined that they can actually retire early because they have a large enough savings to live off. When FIRE members retire early, it doesn’t mean that they stop working for good. It often means that they have the freedom to reduce hours, switch careers, start a business, travel, or pursue other worthy causes.
I’ve learned a whole lot from various podcasts, blogs, and books related to the FIRE movement. Are you interested in making a positive change in your financial future? Would you be interested in receiving more guidance and tips to help you in your financial journey?
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