F.I.R.E
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Financial Independence, Retire Early (F.I.R.E.)
Escape the rat-race. Get off the hamster wheel. Free yourself from the never-ending drudgery of consumer culture. Set the whole system on F.I.R.E!
F.I.R.E is spreading!
This cultural movement is sweeping across the world, challenging the status quo, rejecting our consumer culture and allowing people to quit their jobs and live their lives free from the shackles of the 9-5 Monday to Friday workweek.
Sound too good to be true?
IT’S NOT!
Millions of people around the world have already reached financial independence, and countless more are well on their way.
But what IS financial independence?
GREAT QUESTION!
Simply put, being financially independent means that you no longer depend on a paycheque to survive. You no longer have to trade your precious time in exchange for a salary.
How do I reach financial independence?
I AM SO GLAD YOU ASKED.
The great J L Collins, a financial blogger, teaches us that achieving financial independence is as easy as 1, 2, 3.
1. Avoid/Pay off Debt
2. Spend less than what you earn
3. Invest your savings
THAT’S IT!
Let me break it down for you.
Avoid/Pay off debt – Your first step along the path to a life of freedom is to get debt out of your life and keep it out. Getting rid of your debt will allow you to save more, and saving is the name of the game!
Spend less than what you earn – Reduce your spending and increase your savings. Track your spending for a month. How much of your income goes to living expenses? (Rent, Bills, Food) How much of your salary are you wasting unnecessarily? (Eating out, Drinking, Shopping) How much of your hard-earned money are you keeping for yourself? (Saving, Investing)
If you are like most people, then you are saving very little or not at all. More than 50% of Canadians don't have $1000 in savings. That means more than half of us are one curve-ball away from total disaster.
It’s a scary thought because life is always throwing us curve balls. You could lose your job, get sick, get into a car accident or get pregnant. If life happens and you’re living paycheque to paycheque, what are you going to do?
So, prepare yourself! Set aside a certain percentage of every paycheque and save yourself from being forced to move back in with your parents in your 30’s (…😐)
Invest the difference – Once you’ve got yourself a little emergency fund (roughly three months living expenses) then it’s time to start investing in low-cost index funds such as Canada Index ETF, Canada All Caps Index ETF, Canada High Dividend Yield Index ETF or the S&P 500 Index.
Due to the beauty of compound interest, the sooner you start investing your money, the sooner your money will start working for you! Check out this compound interest calculator to see how it works.
Look, I know it sounds stressful and complicated. You might be thinking, “I’m young! I have all the time in the world. I don’t need to worry about this right now.”
I get it! I had the same mentality when I was young. But I really wish I had done things differently. My sincerest hope is that you guys will learn from my mistakes. I want you all to live amazing lives filled with mishaps, mysteries and adventures… and adventures cost money, believe me!
So, do yourselves a favour and learn about the F.I.R.E movement. Some blogs and podcasts teach you everything, from budgeting to how to fly around the world for $1,000! Immerse yourself in a community that will support you in living your best life.
What have you got to lose?
I suggest getting started by checking out Mr. Money Mustache and the Mad Fientest.
Colin Murphy
Colin is a 32-year-old Professional Writing student currently in his second year at Algonquin College. Colin was born and raised in Newfoundland, but he has traveled around the world. Colin taught English in Guangzhou, China, backpacked across Europe, partied in Las Vegas, skied the Rockies and swam the beaches of Cuba and Mexico. He has worked and lived in six Canadian provinces and driven a transport truck across the ice roads under the northern lights of the Northwest Territories. He loves to laugh and sing, and write about himself in the third person!
