FIRE (Financial Independence Retire Early), for the uninitiated, is a financial movement that revolves around extreme savings and worthwhile investments with an intent to retire early and live off small withdrawals from accumulated funds. Once you achieve your FIRE target, the amount will be good enough to provide you with an inflation-adjusted income for your lifetime.
FIRE is a concept that I heard of a few years ago. I remember being in awe of the people who managed to implement this concept to retire early at the time.
FIRE movement India has been popular, and in this post, I will highlight one of the FIRE movement examples I know of.
One of my friends who managed to do this is Suppu (name changed to protect identity). I had done a brief mail exchange with her a few years ago with the intention of publishing a blog around this, but then I got caught up in life’s other priorities and never did it.
I remembered this again last week, and thought now would be a good time to do it; hence this post.
The concept originated in the 1992 best-selling book ‘Your Money or Your Life written’ by Vicki Robin and Joe Dominguez which became popular among millennials in the United States.
Check out Mr. Money Mustache blog – it is one of the credible sites that helped popularize the FIRE movement.
I had emailed Suppu a few basic questions to which she had responded. I am reproducing them below with the hope that this would be useful for all:
[Begin Q&A with Suppu]
Q: When did you decide to plan for early retirement, and why?
A: Left to me, I would have continued working but my husband always had this idea of retiring early. Even though I loved my work, I was not very career oriented. My husband convinced me about the advantages of FIRE and early retirement. We both wanted to travel more, spend time together, and do stuff that was more meaningful than working in the corporate world.
Q: Once you decided, how did you go about setting your financial targets?
A: Our target was to create a corpus such that 4% of the corpus would be our annual expenses.
[Refer this link to understand more about the 4% rule: https://www.fool.com/retirement/strategies/withdrawal/4-percent-rule/#:~:text=It%20states%20that%20you%20can,for%20at%20least%2030%20years.]
Q: Did you have to cut back on your lifestyle to save more?
A: No, we didn’t have to cut back. We managed to save while keeping the same lifestyle as earlier. But this may need to be worked out differently for different people.
Q: Once you retired, what do you do/ plan to do with all the time you have got?
A: I am now able to read 5-6 times the number of books I used to read earlier. I am into birding and bird photography. I end up traveling quite a lot for the same. My husband manages our finances, advises a few others on their portfolio, grows vegetables, does a lot of gardening and watches a lot of movies. In short, we can pursue what we want with the time we have got.
Q: What should people in our age group (in the mid-forties) do now to implement something similar?
In our age range, people may have already missed the bus. But to take control of one’s finances, reducing unwanted expenses and finding ways to invest better are some of the things people could do.
[End Q&A with Suppu]
Interesting, is it not? If this article has piqued your curiosity about FIRE (Financial Independence Retire Early), my objective has been met. Do a search on the web and you will find articles about where this has worked, where not, and considerations to be followed.
And yes, if you are someone who has managed to gain control over your time using FIRE, I would love to talk to you. Please leave a comment here and I will get in touch.