Wouldn’t it be great if you could tell you boss to F**k off if they start to take advantage, or you could walk out the door when work takes you down a road you do not want to go down? Wouldn’t it be great also to be an owner rather than just labour? Many more people worldwide are taking up this dream and aiming to reach this financial independence point earlier than the traditional retirement age.
The FIRE movement or Financial Independence, Retire Early is a movement started by Vicki Robin in the book Your Money or Your Life. FIRE borrows from the idea from the finance industries ‘F**k You money’ and has increased its popularity over the last ten years as investing becomes more accessible. Followers aim to maximise savings by minimising their spending, and accumulate assets that give them passive income. You achieve financial independence when the revenue generated through your assets is equal to or greater than your living expenses. At this point, you can retire and spend your time doing anything you like; you could go down to part-time, find more enjoyable work, or continue your career in the sweet knowledge that it is by choice and not by necessity that you clock in each day.
The goal is to reach the point of not having to work as early in your life as possible. This presents a trade-off between your future security and your current lifestyle. The more you save, the quicker you reach independence, but this requires you to live far below your means and forfeit many of these things that might make life more enjoyable like a lovely house, extensive international travel, and other experiences. Your definition of financial independence is ultimately up to you; you might decide that you want to have three, five, or ten years worth of living expenses rather than the idea of never working again. It is a journey, and your definition will evolve along with your earning potential and your taste for the finer things.
Step one is to start to save. You should begin by putting away 10% of your income into an investment account, so you start your journey from labour to an owner-labourer. Depending on your situation, 10% might be tough but commit to working up to that amount and make sacrifices with some creature comforts. If you work for a publicly-traded company, buy at least one share so the next time you walk through the door, you can smile and know you own a part of the company, it will start to change your mindset.