The Truth About The F.I.R.E. Movement | Financial Independence Retire Early Tips


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FIRE. it stands for Financial Independence, Retire Early.

It’s all the rage. Young people are on a quest to keep their spending at a minimum and have enough money to retire in their 30s or earlier. They move to countries or states where cost of living is really low. They go off grid which means they cut themselves from the internet, TV, and anything else that could incur extra bills.

They live in the hills or remote areas where nature could provide them some food and water. They build their own shelter.

More importantly, they look happy.

They live, in the strictest sense of the word, spartan.

It’s refreshing to see these people do it. And to be honest, I envy them. To have freedom from technology and be one with nature.

To have freedom from credit cards and banks… and the IRS.

But, it’s not for everyone. People like me employ other people who have families of their own. I have kids. I want them to have the best education I could afford and be immersed in different cultures and opportunities.

But if I were to live the way many of these FIRE movers are living, there are certain things I would do differently.

One, I will not rely on cash savings. That’s a surefire way of losing money. I may be able to save $1Million. But after 5 years, that million dollars will most likely be worth $500,000 because of inflation.

Personally, I think inflation is north of 10%.

So, I will invest. I will make my money work for me, let it earn more money. And the only way to do it effectively is to diversify my investments. I am doing that now. I invest in stocks, businesses, bonds, ETFs, real estate, crypto, and precious metals.

Some stocks have dividends. In some businesses, I am but a silent partner. It frees my time but still grows my money.

Two, I will put as much weight on security or hedge investments as much as I do on investment returns.

Dr. Guy Baker, founder of Wealth Teams Alliance in Irvine, California, said that .

This shouldn’t be surprising. Almost a decade ago a research paper out of Wharton showed that controlling spending and delaying retirement had a greater impact on attaining a comfortable retirement than any particular asset allocation you select.

In fact, the paper suggested you needn’t worry about optimizing investment returns for two reasons. First, there’s little practical difference between the optimal return and the aver age return. Second, if that difference in return is important to you, you can make up for that difference simply by working a little longer.

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