“If only I didn’t have to go back to work.” I think this WAYY to often, especially on my Sundays before I have to clock back in for my work week.
My friends say, “Alex, I think it’s time for a new job. You’re burnt out. There’s another company that can be the right fit for you.”
But I think it’s much more than that. I think I just don’t like work. I don’t like feeling obligated to go and be somewhere at a certain time. I don’t like commuting. I don’t like being on teams I didn’t choose for myself. I don’t like not being able to spend my time as I choose. And at the bottom of all those things I don’t like is the basis for a job. In college, I didn’t like not having money either so I went into the world and made a career for myself.
Sometimes I have to remind myself to grow up. Like, having a job is just part of life. An absolute majority of our society NEEDS to work in order to put food on the table or clothes on their back. But then I started to wonder about an alternative. What if, I didn’t have to work? What would it take to live like that? Is it possible for me?
That’s when I came across FiRe or Financial Independence and Retire Early. I’ve been following Personal Finance on Reddit for a while and stumbled across the subreddit. It’s not just people retiring early at 50 instead of 63. It’s people retiring earlier and young at 35 and 40! I honestly can’t look through this subreddit without feeling a tinge of jealousy. I really want to be those people. I want to know how to retire early. I also want to know how much I need to retire early.
The concept of FiRe goes beyond Personal Finance-which discusses getting out of debt, buying a house and paying for college. As well as other difficult financial choices that neither high school or college ever prepared us for. FiRe is just specifically about retiring early and what it will take to get there and the kind of sacrifices you need to be willing to make.
Looking through the subreddit, I can’t help but feel…what’s the word for it? Ah yes, INADEQUATE. I feel inadequate because here are these 19 year old kids that are planning their hustle for the next 10-15 years to be totally independent off a job! At 19, I was buying Frappachino this and coach shoes that. I was twiddling away my hard earned money because, at the time, I didn’t consider my minimum wage slave money to be……real money. It was just money I was earning before I had a career; before I made a real salary. Talk about regret over missed opportunity. Regardless, now that I’m aware this is possible maybe there’s time for me to turn things around. I’m making 3-4X what I was making on minimum wage, so hopefully I didn’t miss too much of an opportunity.
Personal Finance and FiRe pretty much go hand in hand but FiRe is a long term game. Once you pay all of your debts and start really gaining wealth, FiRe commits to continuing to live a modest lifestyle until you reach your FiRe goal date. For people that are successful at FiRe, this means living at your parents home until you’re 30 or putting a $10K pay increase towards a portfolio option instead of taking a much needed vacation. It means couponing; living on a cash basis and giving up the convenience of the credit card. It sounds so simple, “Just don’t spend money? I hate spending money, I only spend money when I need to!” But DO you? Do you REALLY?? Credit cards/subscriptions, Venmo are super convenient. For credit cards, any points you earn on the card are already spent on the overspending you did due to the “convenience.” And we all like convenience. Retiring early means less convenience and less money spent on pleasures that we usually indulge in as a reward for hard work.
It takes an incredible amount of self control to retire early. Year after year, you’ll need to make sacrifices in your own indulgence, spending habits and choices. Vacation to Miami with friends? Nix that. Those really nice designer shoes? Nope. Weekly happy hour bar tabs with coworkers? Um, no. Forget about the new car lease and living without roommates. What you’re sacrificing in quality of life now, you’re planning to get back later when you’re able to retire 15-20 years early.
You’ll also need to be somewhat knowledgeable on tax laws. Should I invest in a 401K or IRA or both? What should I do after I max on my contributions? I’m about to surpass my income tax bracket, what can I do to minimize this years taxes? These are decisions you can’t just leave to the wind when planning an early retirement. Because year after year the wrong decision will cost you.
Once you start saving all this additional money, how do you optimize it to allow an early retirement? Well that’s entirely up to you. Some people invest in individual stocks, mutual funds or rental properties, or a mix of diversified options. The choice is yours depending on the skill set you have. Some people like to park their money and not think about it again until they need it, some like to be more involved in the trades, others like the idea of home equity. Some enjoy high risk, others low risk. To make FiRe truly effective you’ll need to take some risk to optimize your hard earned money.
Now let’s talk Lean FiRe. What is that? How could FiRe get any leaner, you’re already cutting out the pleasures of life! Oh it can get leaner. Way leaner. Some of you may have read this article rolling your eyes, like “I don’t make that kind of money, Alex. I’m not overspending and there’s nowhere to cut.” Lean FiRe is early retirement for those who make an average or below average earnings. I swear, the Lean FiRe Reddit is no joke! They will make feel shame for your current lack of retirement plans. These are people making 40K -70k a year (or less!), and killing it with their retirement goals.
How do they do it? Incredible sacrifice and resourcefulness. These are people who really hate their job and are like, “Oh hell no! I can’t be doing this forever!”
I read about this one guy that ditched his car even though it was a 40 minute bike ride each way. Luckily he lived in a place where the weather was nice nearly all year round. He was saving money off of the weather! Other people are gardening and living off the literal fruits of their labor and land, thus cutting down food costs.
Then there are the people who are extreme in their housing solutions. One guy was homeless for a year! You heard that, homeless! Like, living in his car and showering at the gym while going to work every day and pretending he had a home. The moral of that story is that he really saved a lot at the time since housing is probably our largest expense. A lot of Lean FiRe people take to frugality and minimalistic living. There was one couple that bought a Tiny Home and lived in a trailer park. Their Tiny Home cost 15k and they bought it outright, then parked their home for a couple hundred dollars a month at a trailer park. They really didn’t need to earn so much money after that.
Theres also strategy to increase their income and put that money aside for retirement purposes only. These people were resourceful with their talents and skills. They started blogging, and you-tubing to earn some extra cash. It’s a slow income stream but it’s cheap and easy to get into. Some opened etsy shops, making homemade soaps, balms, greeting cards, ornaments and whatnot. Some just did the good old fashioned way of getting a second job and driving Uber on the side.
Those Reddit subreddits really put me to shame. When I hear real life stories like that, I wonder WHY CAN’T I BE LIKE THAT?
Because I don’t want it enough. I’m not willing to sacrifice my daily pleasures or I do, and then I can’t stick with it long term. But practice makes perfect, and I’ll keep at it until I’m finally willing to make the sacrifice long term. In the meantime, I’m going to keep reading the inspirational stories FiRe and LeanFiRe have to share with me. Because with a little inspiration, who knows, maybe I’ll be able to retire early too.
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