FIRE, or Financial Independence/Early Retirement, sounds like you really want to just retire while you are young and then do nothing. Well, maybe for some this is an accurate idea of how they envision retiring. Sitting on a beach all day drinking mojitos.
What it means for most is freedom. The freedom to decide when you want to do things and for how long. When you are financially independent then you don’t have to punch a time clock. Unless you want to.
You might not exactly have FU money so you can walk out on an aggressive boss, but you have enough money that you don’t necessarily need to go back to work if you don’t want to.
So, you can see that retirement means different things to different people and how to get there is also going to look very different.
Here are some things to consider before you set out on a FIRE journey as it might not be the best idea for everybody.
What it takes to retire early
It takes a lot of sacrifice and a lot of hard decisions on your path to early retirement, as well as a great retirement savings calculator. Sure, there are some easy ways to put money aside like apps and software that can help. This Stash app review is a good place to learn more about how they work.
Those ways of passive saving can only get you so far, though. It will take a lot of planning and cutting some things out of your life that may be uncomfortable just to be able to retire early.
You also have to have a very minimalist lifestyle while you do this that you will then have to maintain even while you are retired. Are you ready to live this kind of a Spartan lifestyle forever? This is of course, only if you aren’t fabulously wealthy. Even saving money on ATT Wireless will help you reach your goal.
For most regular people this is going to have to happen on a regular income. Now, many people are quite happy living this way and don’t consider it a sacrifice, but it does bear considering.
What do you want to do when you are retired?
Many people that think about retiring early focus on the event. The day they decide to quit their job and become independent. But, that is where it usually stops. The problem is that they don’t know what they want to do when they retire. Sure, they want to have more time to dedicate to hobbies like travel or woodworking, but days are long when you are not working.
Will those hobbies sustain you for another 50 years? You may want to actually enjoy your life through vacations or try to find a job that doesn’t require long hours instead of retiring early and not working anymore after that.
Of course, early retirement can also mean that you go do a simple job that doesn’t encompass most of your life and requires only minimal commitment. To some this also qualifies as retiring early, so have an idea of what you want it to look like as well.