What the Hell is FIRE??

What is ‘FIRE’?

FIRE stands for Financial Independence Retire Early. F.I.R.E.

What does Financial Independence (the ‘FI’ part) actually mean?

It is subjective, but in its most basic form, being financially independent is having income or wealth sufficient to pay your living expenses for the rest of your life without having to be employed or dependent on others. This level of financial independence grants you total freedom to choose how you spend your time.

Is FIRE a good goal if I love my job or I don’t want to retire early?

The ‘RE’ (retire early) part serves up a lot of misunderstanding and resistance among outsiders looking into the ‘FIRE movement’. You don’t have to retire if you become financially free. You can do what you want. That’s what’s so wonderful about it! Financial Independence is a great goal for EVERYONE, not just those who hate their jobs!

While reaching financial independence certainly provides the opportunity for retirement, it is more important to recognise that what it actually provides is the option to keep working in the same job, to quit, to retire, or most likely to simply engage in another type of work or occupation which is more inspiring or personally and emotionally rewarding.

Anecdotal evidence suggests the vast majority of people who become financially independent continue to work, but often these pursuits tend to be much more enjoyable (for example volunteering, passion projects, and more social - lower paid - jobs). With financial independence, your criteria for choosing work can expand waaaaay beyond just salary and financial benefits!

Whether or not early retirement is a feature of your ideal future, the benefits of financial independence can’t be understated.

Is FI(RE) achievable?

FI(RE) is absolutely achievable. It’s not just for CEOs, celebrities and lottery winners. Plenty of ‘ordinary’ people who stumble across the idea of financial freedom (including myself and my clients) achieve financial goals they never considered possible before, including total financial independence. I will confidently say that besides those on very low incomes, achieving FI(RE) is a realistic and attainable target.

A sneak-peak at the roadmap for FI(RE):

The three pillars of achieving FI (ignoring for a moment the obvious complexities in each) are:

1. Maximising income;

2. Reducing expenses;

3. Saving and investing the difference.

4. Bonus Pillar: Get a financial independence coach (e.g. Bjarni Nash 😉).

Apply consistently over a period of time and watch your FI grow!

Reflections

Financial independence is not a crazy goal, and it doesn’t require joining a cult or quitting your job (unless you want to… quit your job that is, not join a cult!!). The route to FI(RE) is both simple and hard, because it requires a conscious and sustained effort to focus on your goals and reject some conventional wisdom about money.

But the reward is more than worth the effort! Financial freedom is priceless. What better goal than reclaiming control over your time. The hours of your life. That is your precious treasure.