FiRe (Financial Independence / Retire Early) is a movement where a person has to adopt to a certain lifestyle with the goal of gaining Financial Independence and Retiring Early. I only got to know of this movement a few years ago after watching a video on Graham Stephen's Youtube channel.
Just like Graham Stephen, I started adapting a frugal and savings lifestyle when I was young but there wasn't a name for this until Fi/Re was made famous. I got serious about Saving To Retire Early about 10 years ago after attending T Harv Eker's Millionaire Mindset seminar. I learned about the JAR system from the seminar and I have been practicing it without fail for the past 10 years. I am proud to say this has helped me tremendously to achieve my financial freedom goal. T Harv Eker has a book called "Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth" which I highly recommend.
I wrote an article about the Money JAR System which you can read by clicking here.
Other books that has helped to reinforce my belief and understanding of Fi/Re are "The Millionaire Next Door" and "The Richest Man In Babylon". These two books are a Must Read for those who want to achieve Fi/Re.
I have been doing some research on Fi/Re lately. It seems Fi/Re has different levels and not all are the same. Here is a brief summary on the 5 levels of Fi/Re :
1) FAT FIRE
What is Fat FIRE? It means someone with a more conventional lifestyle who actually saves more than the average retirement investor. Someone who pursues FAT Fire wants to keep spending at the same level of annual expenses during employment days while no longer relying on employment income.
FAT FIRE is of the hardest versions of FIRE to reach. To achieve it, one has to save atleast 30 times the annual expenses to retire. So meaning if you estimate that your annual expenses is $60,000 per annum (individual or household expenses), your savings target is at least $1,800,000.
For FAT FIRE it is best to start saving and investing as early as possible, to fully utilize the magic of compounding.
2) LEAN FIRE
As the name implies, LEAN FIRE is the opposite of FAT FIRE, and is the closest form to the original FIRE. While FAT FIRE tries to maintain the same annual expenses from employment days even during retirement, LEAN FIRE followers are required to reduce the annual expenses to reach financial independence early. That means lifestyle sacrifices need to be made and to practice extreme frugality so the savings can be maximized to quickly achieve LEAN FIRE.
To achieve LEAN FIRE, one has to save at least 25 times the annual expenses while keeping monthly expenses low. For instance, you estimate that you will require annual expenses of $40,000 during retirement, your financial end target is $1,000,000.
3) COAST FIRE
Coast FIRE relies heavily on compound interest to work for them so followers will need to begin as early possible to reach their investment goal. Once this investment goal is reached, followers may choose not to invest anymore and let the investment coast by itself (hence the name of this FIRE).
Most Coast FIRE followers will lean more to part time jobs to help sustain their lifestyle even after achieving enough to fund their retirement and annual expenses. It is the preferred FIRE option if one does not wish to sacrifice their lifestyle by leaning more to the extreme FAT or LEAN FIRE.
4) BARISTA FIRE
Barista FIRE would be somewhere in between FAT and LEAN. As the name suggests, think of it like Starbucks Barista where Starbucks employees would do part time there to earn a living.
Followers of Barista usually would have quit their fulltime nine to five job.
However, to sustain their lifestyle and pay their bills, they have some form of
part time work. This allows them to cover their monthly expenses so that it
wouldn’t erode their retirement fund.
5) CASHFLOW FIRE
Basically it is similar to Robert Kiyosaki’s Rich Rich Dad and Poor Dad where he will emphasize Monthly Passive Income > Monthly
Working Income to achieve financial freedom.
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