Not everyone is can be a multimillionaire CEO making tens of millions a year. But it doesn’t mean that they have to work till their retirement and beyond to fund their lifestyles… 

To walk away from one’s career, knowing that you’re secure financially in early in your life is a wonderful idea. For most, that idea is merely an idle daydream – an unrealistic one at that.

To most, to retire requires a large sum of money stashed away and an income much larger than they’re currently earning.

For some, the FIRE movement is the answer.

From people in their 20s, just starting out their first jobs, to men and women in their 70s, the concept holds great value to them.

In an age where most of us are living paycheck to paycheck, how does one even think of retirement, let alone financial independence?

What’s so special about it that’s getting people from all ages to believe in it, and adopt it religiously?

FI/RE: Financial Independence, Retire Early

The idea of FI/RE was borne from authors such as Vicki Robin and Joseph R. Dominguez, with their 1992 bestselling book, Your Money or Your Life. The concepts promised in the books were simple; weigh the expenses incurred and compare it to the time spent earning the amount.

These days, however, the concept is boiled down to this; spend less than you earn and save the difference in low-fee investments like index funds and bonds to save for your financial independence. How one goes getting to financial independence, is of course, completely up to them.

As such, FI/RE, or Financial Independence, Retire Early, is a movement that typically focuses on spending less, saving and investing more to achieve a target retirement number or the amount of money you would need to be financially independent.

Here are four ways to achieve FI/RE:

·Save As Much As Possible

Proponents of the movement are typically encouraged to save as much as possible, with some suggesting a rate of 70% of their income going into retirement. Most, however, do not save at such extreme rates, opting for a more reasonable 50% savings instead.

Some individuals, upon their savings reaching an approximate 30-40 times their projected yearly expenses, often roughly $1.5 million, may quit their day jobs to focus on other pursuits or even completely retire from other forms of employment altogether.  

Of course, the number obtained is based on the 4% safe withdrawal rate for US citizens – and FI/RE enthusiasts usually attempt to live within this withdrawal rate, though some opt to live on a lower withdrawal rate as well.

·Living Below Your Means

In some ways, because of their desire to save as much as possible, many of those who follow the movement lead lives with stricter and leaner budgets than average.

Their reasoning is twofold, by limiting your expenses, you’ll eliminate what you don’t need, and find what you do need to keep you happy.

In an age where most of us are living paycheck to paycheck, how does one even think of retirement, let alone financial independence?

·Boost Your Income

If you want financial freedom that lasts, earn more. While admittedly easier said than done for most regular people, there are plenty of side hustles and incomes that could be generated in your spare time.

Work at your primary job, and then side hustle or get a second or even, a third job. Fill your free time with money making activities.

Network for better opportunities, invest your money to grow it. The goal is to achieve your targeted net worth within your goal period, so keep at it.

·Learn To Invest

FI/RE enthusiasts take note on and consider compounding interest, tax-advantaged strategies and living below their means. The income saved from their jobs would then be channelled and invested in long term bonds, funds and stocks in order to maximise the returns needed for the individual to achieve financial independence.

Investing your assets in mutual funds, index funds, bonds and stocks would compound the money saved into a larger number than what is available had it not been invested in the first place.

Also, investing in real estate in parts of the world can give lucrative returns. Large metropolitan cities have thriving real estate markets which, barring a property bubble burst, will only appreciate in equity value. This, of course, is very location specific but is a good way to increase your net worth and diversify your portfolio.

Making FI/RE work for you

How would achieving FIRE be possible?

Most models of early retirement vary in terms of how much money a person would need to spend per year when retired.

A good definition of financial independence means that you have enough money that you never have to work again. You can choose to work because you want to or get bored, but you don’t have to.

What does it take to be financially independent? It is possible, it’s just a matter of putting it into perspective. Anyone can attain FI/RE at any income. It’s all proportionate to their projected yearly expenses and level of comfort. The more expenses they have, the larger the number will have to be.

So start early.

A simple calculation states that it takes $274 dollars per day starting at age 20 to make it to $1,000,000 by the age of 30. That’s ten years of your earning potential saved up, notwithstanding the magic of compounding interest, investment opportunities afforded by your savings.


The biggest driver of FI/RE for most is going to be earning more money. ​You are going to have to sacrifice and budget. You are going to have to build passive income streams. It can be done.

So, don’t waste money. It’s great to live the life you want now, but to live a life of financial freedom means making small to medium sacrifices that cut out the pleasures of living now, for the future.

Cut out the fancy coffee and constant fine dining outside. That newly released movie that you must see right now instead of next week when it’s cheaper by half? It can wait a few days. It all adds up at the end of the day.   


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