🔥 Honest thoughts on FIRE (Financial Independence Retire Early)
Having the financial freedom to do things like skydiving in Interlaken, Switzerland
December 27, 2020
Welcome back friends ☺️ In yesterday's post I alluded to the FIRE (Financial Independence Retire Early) movement that I stumbled upon in late 2019. Not having too many concrete financial goals myself, I decided to start down the path of FIRE.
For reference, this is the blog I've been reading: https://www.millennial-revolution.com They're a couple from Toronto who retired at 31 from their day jobs as engineers and now travel the world/work on their passion projects.
Sounds amazing right? Retire when you're 30 and spend the rest of your life travelling? Sign me UP. I became so intrigued with the FIRE movement - at this point, I wasn't sure if I was going to pursue full FIRE but the process made me much more mindful of my spending.
Essentially, to reach your FIRE number, take your annual living expenses and multiply by 25 - this is the amount of money that you need to amass before retiring. The logic is that the average portfolio returns about 9-11% (based on the S&P 500 30-year historical returns), and with an annual withdrawal rate of 4%, the portfolio will continue to grow and never reach 0.
Although I was saving ~90% of my salary, I quickly came to see three issues:
-I would have to continue to save at this extremely high rate so that I could reach FIRE by 35, and currently I wasn't factoring rent or any other expenses into my savings since I lived at home (but certainly do not want to forever)
-I was single which means that living a frugal lifestyle with tunnel vision on FIRE was fine, but finding/introducing a partner to this lifestyle/goal might prove difficult (I wasn't just about to FIRE off at 35 leaving my husband to work until 65 lol how cruel)
-Life would be all fun and well if I reached FIRE by 35, but what would I do for the next 65 years of my life? (yes, I want to live to be 100) Travelling the world sounds amazing, but for how long?
The aspects of FIRE that I was attracted to was not having to work a 9-5 until 60-65 and then perhaps not have the best health to travel and do all these things I would have put off. I would love to be a yoga teacher, and having financial independence to do that sounds so appealing to me. Being mindful of my purchases is something that I'll continue to do as I don't see the point of frivolously and uselessly spending money, but I don't want to get to the point where I'm denying myself something that will bring me joy today as a tradeoff for FIRE sometime down the road.
Going back to point 3 above, I recently finished reading Successful Aging by Daniel J. Levitin and he stresses the importance of not slowing down. If we don't have a bigger purpose or meaningful work to do after we retire, we fade so quickly. Just going through the motions of life without really seeing the bigger picture causes the advanced onset of so many old age-related problems and I would personally rather avoid that.
Where I'm at right now is trying to find more meaningful work/my purpose in life (aren't we all) so that eventually, my full-time 9-5 job can be transitioned into something I absolutely love doing. Gaining financial independence and the freedom to have experiences where money isn't a limiting factor is also another goal of mine that I'm working towards.
Having a bit extra saved up for a rainy day (or two) never hurts either!
Sending you lots of love and light,
-Reina xo
#millenialmoney #financialindepdence #chooseFI #FIREmovement #startearly