What is FIRE and How to Do it
- What is FIRE?
- How FIRE started
- How FIRE works
- The biggest steps to get to FIRE
- Get started
- Pay more of your mortgage each month
- Pros and Cons of FIRE
- The bottom line
What is FIRE?
How FIRE started
How FIRE works
- Keep your expenses extremely low.
- Raise your income substantially.
- Seek investments with 8% annual return.
It can be scaled back
How much should you save?
Why 25 times expenses?
- Working part-time
- Switching to another career
- Start your own business
- Take a leave of absence from work
The biggest steps to get to FIRE
- Save 25X annual expenses
- Save 70% of income
- Funding 30+ years in retirement
- 8% annual return on investments
- Withdrawing only 4% annually in retirement
0.05% investment return vs 8%
Track your money and set a budget
Max out retirement contributions
- Freelance work on Fiverr
- Selling things on Etsy
- Work for TaskRabbit putting furniture together
- Food delivery through DoorDash
Get out of debt
Pay more of your mortgage each month
Pros and Cons of FIRE
- You can retire in your 30s if you can save enough.
- Follow FIRE and you can be financially independent.
- You can work part-time and lower the amount needed to save for retirement.
- You’ll see how much an hour of work really buys.
- Supplemental income for Social Security and other retirement funds.
- You may not be able to afford to accomplish FIRE unless you earn $100,000 or more per year in your 20s, 30s and 40s.
- Saving 70% of your income.
- Spending only 3-4% of your savings in retirement.
- Lifestyle changes to afford retiring early.
- May have to drastically cut expenses.
- Save 25-30 times your monthly expenses, vs 15% for traditional retirement.
The bottom line
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