Financial independence retirement (FIRE) is an objective, a goal, a personal achievement of building an accumulation of wealth to achieve freedom from work. When an individual achieves financial independence, they are living a rich life. A rich life has differing meanings to different people. Generally, it gives an individual time to live their life the way they want to, free from the constraints of culture and society. A “FIRE” person is free from the constraints of employment, family, and dependents. They have the financial resources to travel, educate and re-educate themselves to add meaning, enhance and enrich their lives.
What is FIRE?
There’s been a lot of talk about “FIRE” lately. But what is it, really?
“FIRE” is an acronym for Financial Independence & Retirement.
“FIRE” is a way of life.
Financial independence retirement gives a person a true sense of achievement in their otherwise ordinary lives. Imagine being in the financial position where you can stop working and live on permanent vacation. You would be free from economic ups and downs, free from worrying about your job and how you are going to support your family.
Too many people struggle through life, never accumulate enough wealth to retire at 60 years of age and must continue working or live on a basic government pension. Life would be demoralizing and boring because you never having enough money to do anything. So many people live at or just above the poverty line.
Retirement should be the highlight of your life. Freedom from money worries, freedom from work, freedom to travel, seek further education, learn a language, and have spare time to do whatever you desire.
Who’s Achieving Financial Independence Retirement?
Many people are reaching the goal of FIRE in their 30s and 40s. These people started young, saved hard and invested in property. However, it’s never too late to start working towards financial independence and early retirement.
It doesn’t matter about your personal background or what your parents did or didn’t do. People from all backgrounds, all race, all levels of education can achieve financial independence & retirement.
The secret is to start today. Procrastination never made anyone rich.
Millennials Will Not Reach their Retirement Goals
How to Achieve Financial Independence Retirement
There are many ways to approach financial independence and retirement which can be different for each person. Some people are happy with a simple life with fewer material assets whereas others want a large home, new car, and vacations in their retirement.
Most people would like to do all the activities that they did on the weekends while they were employed. If you went out on weekends and had many vacations maybe you want the same lifestyle in retirement. If your retirement income is the same or more than your working income that lifestyle is possible. However, most early retirees find that they cannot afford the high lifestyle every day of the year. There has to be some compromise to achieve financial independence rather than over working yourself into old age.
Change Your Life
Do you really need to live in a large, expensive city (New York, Chicago, Los Angeles). You can always visit those places on holiday but you really don’t need to live there. It’s just too expensive and you will work yourself to death trying to afford these places.
The real goal here is to live your life free from debt and other financial worries. Life is about living the best life for you, not about trying to impress other people who don’t matter.
You don’t need the biggest house, new car, and boat. What does that do for you especially if you don’t own it.
Live in a smaller city or large town. It’s much cheaper than a big city. It’s easier to get ahead with cheaper real estate and a smaller debt level.
There are still shopping malls, restaurants, cinemas, and other forms of entertainment. Living near a mountain, lake or beach area may provide a better lifestyle than an expensive, over-crowded city. Think about all the outdoor activities you can do in a rural area.
Many Americans, Canadians and Europeans move to a cheaper country to enhance their lifestyle. It’s much easier to start from a lower cost base when purchasing real estate. Why struggle with a huge mortgage in Vancouver or Los Angeles when you could have low debt or no debt at the beach in Costa Rica.
Check out the price of real estate in Mexico and Central America.
Check out the price of real estate in Malaysia.
Financial Independence & Retirement Research
The next step, after reading this article, is to conduct your own research. Search for material about becoming financially independent and achieving early retirement. Read about the experience of real people who have achieved financial independence & retirement.
Research property prices and the cost of living in other cities or countries.
Make a long-term plan for yourself. Where do you want to be in 5, 10, 15 or 20 years. Set realistic goals that make sense and are reasonably achievable. Don’t set silly goals like, I want a Ferrari and three hot girlfriends. Remember, you are planning the rest of your life not writing a Hollywood movie script.
Build a financial spreadsheet that calculates how much money you can save, invest and compound the returns to accumulate your wealth.