Friday, October 26, 2018

More on FI/RE

It seems like more and more people are interested in the concept of financial independence/retiring early.  PBS recently did a spot on this concept for PBS News Hour.  The New York Times has done a couple articles on the topic (here, and here).  Nearly every news website has picked up the topic (here, here, and here), and of course there are several blogs on the topic (here, here, and here).  There are also plenty of subreddits on the topic including FIRE (financial independence), FatFIRE (retiring early on a larger than normal income), and leanfire (retiring on a low income)

FI, whether or not you want to RI, is definitely something to work towards.  With financial independence, you have A LOT of options.  If your job evaporates, no big deal, you won't even stress about it.  And you can take plenty of time searching for your next job.  If you want to try an entirely new career field, you can easily do that if you don't have any financial pressure to keep a job just so you can pay your bills.  Or you can retire early and kick back on a beach somewhere (most people will find this extremely boring after a while).

The basics of FIRE are pretty simple.  Get out of debt ASAP, then save and invest money like a maniac.  Live way below your means while you are doing this, and eventually you will have a big stash of cash.  Then, since you are used to living on very little, you can retire and pull a small percentage of your investment out each year to live on.  The interesting thing about achieving FIRE is that people who are that driven to achieve their goal of saving and retiring early often get bored with doing nothing so they pick up new things--a new job, and new career, a new hobby that maybe brings in money--and then they end up not only financially independent but the money from their new ventures keeps rolling in!

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