The F.I.R.E. movement (Financial Independence, Retire Early) has gained some serious momentum in the last few years. The average retirement age for current retirees is 59.88 years.
Financial independence is achievable, but will require serious saving and investing. Many FIRE experts and bloggers strongly recommend saving and investing 50% or more of your current income. You may be reading this and think that you need to have a six figure salary to be able to afford this lifestyle, but this is not the case for many people currently trying to achieve early retirement. A couple from Raleigh, NC share their retirement story on how they retired in their 30s with over $1.3 million – both having a salary of around $70,000.
There are many different ideals of financial independence including:
Fat FIRE: having $75,000 to spend per year of retirement
Lean FIRE: having just $40,000 a year
Barista FIRE: is supplementing your retirement savings with a part time job (like working in a coffee shop)
Coast FIRE: is having a part time job even though they have enough money in their retirement fund to live comfortably
As you dig into the FIRE movement, more and more people share their stories of the opportunities and happiness that come along with this independence.
1. Live wherever you want. For a while, I limited my job search to NYC, Boston, Stamford, CT because I thought that’s where all the high paying jobs were. I moved to a more affordable part of the country to save more money on housing and general cost of living. If and when I achieve financial independence, I will have the ability to live where ever I want, because I won’t have to limit myself to expensive cities where the jobs in my field currently are. I dream of living in the mountains for ski seasons and the beaches for a break from the cold. Even if you can achieve financial independence by working for yourself, your job can take you anywhere there is WiFi.
2. Do something you actually find interesting. Hopefully something you decide to start generating income from is something you find actually interesting. I currently work in logistics and all day I dream about owning investment properties where I can sit back and enjoy the passive income from my home on a mountain or on a beach. When you reach financial independence, you’ll have the time to go take up hobbies, learn a language, visit friends and family, or even build your dream tree house.
3. Make your own hours. Most jobs offer around 5 personal days and 5 vacation days per year. I live 2,000 miles away from my family now, so this makes it difficult to plan time to go home. Working five days a week with only two days off is not a way I want to spend the next forty years of my life.
4. No more co-workers you just can’t stand. I work in a warehouse so the girl-to-guy ratio was about 10:1. So every time I would get a not-so-funny joke or an unwanted dinner invite, I would deposit a hundred bucks or so into my Vanguard account as a lame attempt to try to get to financial independence quicker. Working for yourself means it’s either just you, or people you like and trust. Full on retirement would allow you to spend time with people who you like and will help you grow and enjoy life.
5. No dreadful commutes. The average commute time in the United States in 25.4 minutes each way. (You’ll quickly learn that I use per year as my point of reference, so the average person spends 9.2 days per year commuting). I had a co-worker who had to commute an hour and a half to work each way to work – making his gas and oil change expenses over $7,000 a year. Whether you work for yourself from home, or you are fully retired, cutting out that commute will have a positive impact on your life.
6. People are generally more happy with less “stuff”. Frugality is an essential part of the FIRE movement, which means you will have to give up buying a new BMW, a 4 bedroom turn-key house, or a new outfit for every event. Money and “stuff” can buy you temporary happiness. The Minimalists – Joshua Fields Millburn & Ryan Nicodemus are normalizing the minimalist movement. Minimalism and FIRE both advocate spending less money on energy on things you think will make you happy, and focusing that energy on what is really important.
“You find you no longer waste money on crap and potentially you can use this extra money or your extra time from stripping away draining relationships into more experiences. “
7. Put an end to the never-ending cycle. Wake up at 6am, commute, sit at a desk, commute home, watch TV, go to sleep at 10pm. Lather, rinse, repeat. And what for? To have a large enough income to buy more “stuff”?
8. Your physical and mental health will improve. My current job is both physically and mentally demanding, so breaking off from this rat race is important to improve my general health. Financial independence and retiring early will open up time to improve on your physical health, because you will not be stuck at a job 40+ hours a week. I don’t know about you, but it is not easy for me to maintain a gym routine while working 40+ hours a week. With having complete control of your finances will have a long lasting improvement on your mental health. Stress and work-related anxieties can be a thing of the past.
9. Your relationships will improve. As I mentioned before, it is very difficult to maintain my relationships with my boyfriend, friends, and family with my current work set up. I work 12+ hour days, with only about 10 days off per year.
10.You are your own boss. You make your own quotas, you set your own goals. If you work for yourself, you can decide if you can afford to take the morning to sleep in. Setting achievable goals for yourself is much less stressful than feeling the need to fulfill your boss’s goals.