FIRE - Financially Independent & Retire Early.

I admit I only heard this term recentment, a community and movement of basically those after a financial freedom life.

The FIRE concept is to essentially where you intentionalizing maximize on savings rate by growing the gap between your living expenses & your income and you invest the difference. 

“Spend less than you ear - invest the surplus - avoid debt. Do this and you will wind up rich" 

Objective involves accumulating assets until the passive income from these assets provides enough money to cover the living expenses. 

I’ve implemented this kind of strategy for years. Especially as we have lived in many different countries, the total cost of living varied and would be reduced, while the business revenue would scale, therefore total profits would increase too. 

I just called it my own journey to financial freedom. 

But I like the FatFire level of retirement, where you dont compensate on your quality of living at all, you still have whatever you like, live very comfortably and you have a ‘fat stash of cash’ to retire with. 

When most people think of investing, the first pathway for most seems to be property. Especially with taking out a 30+ year mortgage with repayments - this is the popular choice and I dont really get why.

I prefer the returns on the markets, diversifying across dividend stocks and ETFs, and the kinda returns I’ve seen consistently compound on this are just incredibe. 

But I want to share how to realy get started with FIRE, and creating a pathway to financial independent even if its a slightly scary to you. It’s better to have an idea of where you are at. 

You do a consolidation of sorts so you have a top line view of your net Worth. 

This a very brief explaination but if you are interested let me know & maybe I could create a resource and replicate mine. 

In a spreadsheet, I use Google Sheets - You add up all your income in one table. In another you track reoccuring expenses that reflect what your monthly cost of living really is. Include costs for: Rent, Food, Transport, Utilities. 

The total expense cost = ideally what you want to aim for in passive income to generate without you actively working on it. So this income shoul come from means where it’s not your salary or you are not directly trading hours for $$. 

I have a table that shows my net worth in the stock market, and the calculated exact divedend returns for that time. I also have any passive income streams connected in a way that show me a % of my cost of living goal. 

Then I also have all of my cash on hand accounts seperate to this. But remember that the money you leave in the bank at the moment, (it could rise) is at a minimus of 4 -6% depsite their high savings interest rates promises that end up losing all its value anyway. So having more money in the bank hurts you. 

I update this Wealth sheet every quarter - I don’t bother doing it every month, others do. 

Let me know if this is something you’d like to learn more about. & I’ll go deeper around this topic.

xx