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What would you do if you didn't have to work? would you travel? spend time on hobbies or do something that you've always dreamed of doing?
For most of us, this is a pipe dream. BUT what if I told you it didn't have to be?
In 2020 I discovered the Financial Independence Retire Early (FIRE) movement which is gaining popularity. In simple terms it's about becoming financial independent so you are free to do what you desire rather than living in the rat race.
You may be sceptical, but the basics are easy and you don't need a financial advisor.
There are so many people who are already blogging about the FIRE movement so I am not going to repeat what's already out there. If you're interested in finding out more, have a look at the blogs/resources below.
I am still working towards financial independence but am much more confident about my financial future. Previously it felt too HARD so I did nothing, the knowledge I gained through Alan Donagen's Rebel Finance Course (free) taught me that the best time to start was 20 years ago and the next best time is today! It's actually SIMPLER then you may think and most importantly achievable for everyone. One of my favourite articles is by Mr Money Moustace "The Shockingly Simple Math Behind Early Retirement"
If you want to get out of the rat race and do what you want with your life then I definitely recommend starting NOW.
If you would like some guidance how to use my tracker or how to get started get in touch.
If you found this information useful, please consider making a donation to my Support the Needy appeal.
Thank you and best wishes
Kaleem
DISCLAIMER: I am not giving any financial advice or earning any commission, please do your own due diligence before investing.
Number of years you will have to work for a range of possible savings rates in order to become financially independent (assuming the savings are invested and not left as cash)
The Six Step Process I took to get closer to FIRE:
Track my income and expenses
Pay off debt
Build up an emergency fund (1, 3, 6 or 12 months worth of monthly expenses)
Reduce my expenses (Really think about whether I need what i'm buying), try to achive a 50% or higher savings rate
Increase income either through payrise or side hustle.
Regularly invest my monthly savings in a low cost global passive index fund.
Resources:
My FI Tracker (Read only, if you would like a demo/custom copy contact me)
Magic Numbers:
4% Rule: Is a retirement withdrawal strategy that suggests retirees can safely withdraw the amount equal to 4 percent of their savings during the year they retire and then adjust for inflation each subsequent year for 30 years.
Rule of 25: Your FI number represents the amount you need to sustain your desired lifestyle without relying on traditional employment. To calculate your FI number, multiply your yearly expenses by 25 (if you follow the 4% rule) or 33 (for a 3% SWR). This will give you a rough estimate of the amount you need to achieve FI.
Rule of 72: Calculate how long it's going to take for investments/debts to double. Divide 72 by the interest rate you hope to earn/pay. That number gives you the approximate number of years it will take for your investment/debt to double.
Rule of 194: Multiply the monthly expense amount by 194. This will then reveal the total cost, including the gains you would be foregoing, over the course of a decade. This math equation includes an estimated growth at a rate of 8%.
Rule of 840: Multiply your weekly expense(s) by 840 to determine the true cost of that expense that would have earned 7% over 10 years
Use my referal link to open an InvestEngine account, invest a minimum of £100 and hold for 12 months and we’ll both get a randomly selected investment bonus of between £20 & £100. I have kept my portfolio simple and invested in the Invesco All World ETF (FWRG)
If you travel then I found a Wise card gives multiple currencies at very good FX rates.
Shop online? you may get some cashback for the purchase. Since joining in 2011 I have earned over £1100 in cashback alone.
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