F.I.R.E In Me

The FIRE movement is a lifestyle movement whose goal is financial independence and retiring early. FIRE does not mean that you have to quit your job, instead it is about living your dream without worrying about your job to fund your lifestyle. It gives you the upper hand to negotiate things which are important to you like your working hours, vacations, family time, etc. This movement which is particularly popular among millennials, focuses less on the “retire early” aspect and more on the "financial independence" component.

Key Steps I took to achieve F.I.R.E. in my life:

1. Well, before I answer "How", it was important for me to have a strong "Why", once you have that why, all you need is to determine your path. You need to define what financial independence means to you.

2. Set my financial goals. Setting goals will help you frame and make the important trade-off decisions during your journey to financial independence.

3. Predict future "essential" expenses by using my current expenses. Once you know your future cost of living, you need to determine the right asset allocation which will provide the required cash flow to cover your future expenses.

4. Eliminated my debt. Carrying debt makes you feel out of control and dependent on your job as you need to pay for your debt. This step is crucial for achieving F.I.R.E.

5. I saved, saved & saved and cut back on expense. I questioned every spending decision of mine. I tried to save > 50% of my income. I know this is very tough, but frugality is the key element for achieving F.I.R.E. Start saving today, do not give excuse that your income is less. If you don't save when income is less, chances are very slim that you will save when your income grows.

6. Invested my savings smartly and efficiently. Start investing as early as you can and the power of compound interest will make you rich. Start a systematic investment plan every month into stock market through low cost equity mutual funds for the long term. Choose your asset allocation wisely as the goal is to generate enough passive income to pay for your cost of living.

7. Focussed on generating more active income so that I can save more and invest more. It is a fact is that higher income would make the whole early "financial independence" process much quicker. However, FIRE is not the luxury only for higher income earners only, you need to remember that the foundation of our ability to achieve F.I.R.E. is a combination of income and saving.

8. Created a working plan and then implemented my plan. Implementation is the process that turns strategies and plans into actions to accomplish goals.

9. I continue to monitor and review my plan annually. Monitoring, progress review, reassessment and evaluation of your plan is extremely vital.

The math to FIRE is very simple. When you have saved up an amount equal to 25 times your annual expenses, you would have set your retirement plan on F.I.R.E. The less money you need to live, the less money you need to save in order to fund the rest of your years. Achieving financial independence & retiring early is very hard, it requires knowledge of investing, living below your means, and lot of discipline and patience. Once you achieve F.I.R.E, you have to figure out what to do with the rest of your life. It is not easy to say goodbye to your regular monthly salary just because you want to do something that interests you.

"Achieving financial independence did not mean that I stopped working. It was less about me retiring early, and more about me having the freedom to pursue my dreams and passions, without worrying about my living expenses" - Saikat