Have you heard about the F.I.R.E movement? It is a community of young individuals whose aim is to gain financial independence and retire early, by their early 30s or 40s. People like Pete Adeney and Viki Robins have set the momentum of such movements to do away with the 65 years retirement age concept.
The idea of retiring early is music to many ears, but if I am to do it right, I should have the discipline and proper tools to start. Be it the kind of tools that are seen on the bitcoin trader or in other places, understanding this is vital. Here are tips inspired by the F.I.R.E movement and other healthy financial pursuits.
The first part of this culture is gaining financial independence. Instead of going for the traditional methods where we work for money, I turn it around to make money work for me. This means looking for financial smart skills and opportunities that summarize my cash flow into having 25 times my annual expenses in investments.
The concept sums up the 4% rule where financial analysts found that the average retiree withdraws 4% of their investments in every retirement year. If the withdrawal percentage increases by inflation each year, the savings could last at least 30 years, depending on the individual.
If we retire early, we will need to tweak this calculation so assets can last longer than 30 years. Some people reduce the spending to 3% to have 33.3 times annual expenses in investments.
This is only a standard evaluation. If I choose to have financial independence that regenerates, I might not have to worry about withdrawals and how long the assets invested will last.
Sacrifice Now Enjoy Later
Sacrifice does not have to be the only way to do it, but it is the most probable place to start. I need investment money, meaning some of my current income should be going into investments or savings. I might have to adjust my lifestyle, even moving to a smaller apartment to save more for a more comfortable future.
Increase Income Streams
If sacrificing my fun today is not my best option, I should then look for ways to earn more. An extra job may be a possibility, or trying to work extra hours in the current one. Or, I’d go for the next point.
Investing is a smart financial move that draws me closer to financial independence faster than other methods. This is where money starts to work for me and not the other way round. However, I have to warn us not to jump into the investment game, eyes closed. The good thing is some platforms offer at least $100000 virtual money for practice before starting to trade with actual money.
Work With Financial Gurus
A wise man does not stand alone. To be financially independent, I have to follow in the footsteps of people who are already achieving the same. Seeking help from financial experts will save me from losing significant money in the learning process.
Buy a House Early
If I am going to have a financially secure retirement, I need to ensure I do not have debts and heavy financial responsibilities draining my savings. Buying a home early is one of the ways to keep me from making this mistake. It helps clear the mortgage before retirement.
Start Saving for Kids Expenses Early
Kids require a lot from us, and the sooner I start planning for their future, the more I save enough in time and have the option of retiring early.
Patience is Key
This statement sounds contradictory since, in a real sense, I am speeding up my retirement process. However, If I can remain calm during the journey, I’ll be able to make sober decisions, being careful with whose help I seek and where I invest my assets.