Anyone else out there on the FIRE train? If so, let's trade tips, stories, and challenges!
What brought me to Public Mobile is the ability to pay $0 for mobile service (I just joined this month, and I'm well on my way). I'm posting about FIRE here because I figured other frugal people may be drawn to Public Mobile as well, so there might be a decent chance of finding fellow FIRE adherents here. (Any fellow Mustachians?)
For those who haven't heard of FIRE, you can post questions here too.
I'll attempt to describe FIRE in a paragraph. Basically, it's about working toward financial independence (FI)—the point when you have saved enough money to stop working for the rest of your life (approx 25 times your annual expenses, if invested, should last forever). It's also about retiring early (RE) as an option, rather than waiting until you're 65, the age you're supposed to retire. Most in the FIRE movement consider the definition of "retirment" as quitting the 9–5 job that you're working at for the money. Instead of working the 9–5, people who have reached FI often shift focus to their passions, and they don't have to worry if they don't end up making money off of it. But if they do—great!
Personally, I'm 34 years old and I'll be retiring in one year. I'm looking forward to spending lots of time with family, learning languages, travelling, and dedicating plenty of time to creative pursuits.
Thanks for your response! Yeah! I've been living it for the past couple years, so I have lots of tips haha. What in particular are you interested in? Maybe I'll give a few broad, overarching tips, and you can let me know if you'd like me to get into the details of anything.
Anyways, those are the 4 overarching tips that came to mind. Feel free to let me know if you have any questions about any of them, and I can get into some details
It is very wise of you to have planned so well, that you can retire so young - greta for you!!
I think the "approx 25 times your annual expenses" is way too conservative. Because if it is based on the current 'working life's annual expenses' - although it is always best to have more $$ saved - it can lower the confidence of some who may want to try FIRE.
Here is the reason: The current 'working life's annual expenses', are much higher than when one is no longer working - such as driving back & forth to & from work, work related outfits, luch/meals, etc, etc.
Note: I am NOT knocking the FIRE idea at all - I am simply trying to note that it may be easier than one feared...
Thanks for your comment, @JuniorJunior!
I completely agree that the '25 times annual expenses" rule of thumb is conservative—it's just a rough guideline. It's overly safe because it's based on how much you would need for the money to last the rest of your life without every contributing to it again, and it'll work even in most worst case scenarios. FIRE will look different for everyone, and most people will continue to make money or work in some form post-FI, so they definitely don't need 25 times their expenses. And like you said, many people will have lower expenses once they've left the 9-to-5, so 25x is an overestimate.
That being said, saving 25 times your annual expenses in 10 years is a goal that's definitely within reach of middle class Canadians. If you start in your 20s, you can retire in your 30s with 25 times your annual expenses. It doesn't hurt to be conservative for peace of mind and so you have a safety margin in case of a black swan event.
What matters is your savings rate: the percentage of your take-home pay that you're saving/investing. To amass 25 times your living expense in 10 years, the math works out to a required savings rate of 66%. So as long as you save/invest 66% of your income and live off of the remaining 34%, your working career is only 10 years long.
Once you shift your mindset and understand that every dollar spent on something that doesn't permanently increase your happiness is a wasted dollar, saving 66% becomes too easy, and you can go for even more. For example, my current savings rate is 76%, in which case it only takes 7.6 years to save 25 times my annual expenses, which is more than I need to last the rest of my life.
In short, I agree that FIRE may be easier than many people think