We get up for work, drive to work, and work for money to pay for the house we use to rest for work and to buy a car to drive us to work. Awake, work, home, sleep, awake, work, home, sleep – that’s the reality for most Americans living the “dream.” Did that sentence make you cringe? You’re not alone. There’s a huge wave of people of all ages who are looking to quit the rat race before they’re too old to enjoy life. This channel is here to help; the only way you can retire in 10 years or less is by joining the F.I.R.E. movement and by joining it right. Here’s how to get started in five steps.
1. Understand what the F.I.R.E. movement is and what it isn’t.
The F.I.R.E. movement began way back in 1992 based on the book Your Money or Your Life by Vicki Robin and Joe Dominguez. More recently, however, it has gained steam and popularity as people began to question if they really had to work until 65 until they could enjoy life the way they wanted. The F.I.R.E. movement isn’t about rolling around in the dough, buying yachts, or spending like there’s no tomorrow. If you’re into that, get a job in finance or tech.
The F.I.R.E. movement is instead about identifying what you need to have enough, what enough means to you, and creating a plan that could give you enough financial security to free yourself from the nine-to-five to do what you love. Some people want more time with their kids, others want to work on personal projects, and the rest of us may just want to take a stroll on a beach one morning instead of sitting in a cubicle if we feel like it. That’s F.I.R.E., and that’s achievable.
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2. Do your math and create a plan.
If F.I.R.E. seems to be what you’re looking for when you retire in ten years, it’s time to create a detailed plan. Most F.I.R.E. seekers will plan to withdraw roughly 3% to 4% of their savings annually to cover their living expenses. This means you need a set number of how much you need to live monthly at the lifestyle you desire. Remember, this is an “enough” lifestyle, not a lavish one. If you want a lavish lifestyle, that’s fine too, but your numbers will be very different and you may not make the 10-year cut without some huge changes in the meantime.
Once you know how much you need per month in your “retirement,” you’ll need to create an intense savings and investment plan for the next ten years. It is no easy feat to commit to, and it can always change as time goes on, but a plan of some sort with set numbers is essential to get started.
3. Be frugal, not cheap.
There are two parts to every budget: spending and earning. Spending is usually where most of us make errors, which is why the F.I.R.E. lifestyle supports the f-word. No, no that f-word. I’m talking about frugality. Frugality is sometimes mistakenly grouped with being cheap, but that’s not the case at all. Being frugal is a mindful and empowering lifestyle choice that focuses on resourcefulness, conscious spending, and financial efficiency to maximize value and achieve long-life-long financial goals. It means saying no to expensive invitations you don’t need or want to accept, meal planning, looking for deals, and a strong differentiation between wants and needs. It takes practice, research, and time, but it’s well worth the huge savings you could amass in just a few months. There are plenty of F.I.R.E.-friendly frugal tips out there; just do a Google search and you’ll have a great place to start.
4. Invest, invest, invest.
Once you’ve curated your frugal lifestyle and have some emergency savings put away, it’s time to work less for your money and make your money work for you. Investing can be intimidating at first, but there are plenty of great videos and articles out there to get started. Be sure you come up with a diversified and long-term strategy – no day trading for the F.I.R.E. guys and gals out there. Consider low-cost index funds, bonds, and even a robo-advisor account that does the job for you with low to no fees for the process. If you make extra cash, invest it. If you get a raise, invest it. Invest, invest, invest.
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5. Level up your work.
If you’re stuck at a job with limited pay potential, you may be able to double or even triple the speed of your F.I.R.E. savings by considering a career change. Many early retirees picked up a new skill or hobby or applied to new companies to find positions that allow for a limitless salary schedule. Jobs in things like sales or consulting are great places to start. If you aren’t confident enough to swap jobs just yet, pick up a side hustle doing something you enjoy to watch your extra flow in. Focus on jobs that sell your expertise as a service for the largest gains. Brush up on your skills and certifications for your job as well, to make yourself more marketable for a raise. Know your worth and ask for it.
Conclusion:
Retiring in ten years or less requires dedication and work, but it is possible. Thousands of people around the world have experienced F.I.R.E. and are now able to work – or not – however they want, whenever they want, and wherever they want. Some volunteer, others travel, and many spend much-needed quality time with their loved ones. Few are sitting on a beach 24/7 sipping a drink in a pineapple. It’s about finding purpose, fulfillment, and enough to bring you joy every day without the stress and pressures of an outsider telling you what to do. Sounds good, doesn’t it? Tell me your why for wanting to retire early in the comments! And, as always, thanks for watching.