Everyone wants to know how to achieve financial independence early. Financially independent retire early, in short, FIRE Movement. Has gained widespread attention over the past few years as people are finding ways to escape the rat race.
The positives there are multiple ways to achieve FIRE. The most well-known way is to invest and leave aside as much money as possible to invest in the S&P500, or any investment that gives higher returns, which historically provides an annual rate of return of 10%.
There are some links that are affiliated with OneUpblogs. We may be compensated. Your purchase helps the blog grow and we can't explain how appreciative we are. Thank you.
However, this method of achieving FIRE takes a long period (usually more than 20 years). It kills the driven momentum to invest heavily (most would quit after their first year).
I use an unconventional approach to achieving financial independence retire early, which entails creating multiple sources of income to live off. In this blog, you will learn how financial independence is just a numbers game.
Anyone who puts their heart and soul can achieve financial independence and retire early.
How to get started in the FIRE movement
Let’s go over the fundamentals first. The first step is knowing what you plan to achieve by achieving FI. Most working adults work their lives away, working a 9 to 5 job aimlessly without knowing what they want to plan out in their life for the next 5 to 10 years.
I started FIRE to achieve $100,000 before 25; setting the goal lets you know which direction you are heading. Think of what you plan to accomplish when you reach FIRE. Is it traveling worldwide, spending more time with loved ones, or doing more charity work? That is something for you to figure out!
Setting Financial Goals
Finding out the percentage of income to save, work towards increasing your savings rate. Having no savings for investment means you will never be able to retire.
Knowing how much to invest per month to retire is just as important as knowing each savings rate. The 4% Rule allows anyone to live comfortably on their investment without losing any value. Do read my article on how much you need to retire in this blog.
Sticking to my Goal
I plan to retire in my mid-30s. Sounds crazy, right? Sticking to your goal during part of the stages can be challenging. Have a friend or partner join your conquest to reach early retirement together. Plus, if you decide to split your finances, you’ve doubled your income, and you will be able to motivate one another.
Sacrifices need to be made to reach early financial independence. Though I wouldn’t recommend most people to take my path to accelerate their wealth, if anyone wishes to retire early, these are also the drastic steps they can take to reach early retirement.
Journey to Achieving Financial Independence Early
Right now, I’m an accountant making about $23 an hour, which comes to be about $47k a year. My living situation is I live with roommates, which nearly cancels out my rent. I can save almost 60% of my income to savings/investments.
Which comes to be about 20k a year. Ten years down the line with compounded interest (10% in S&P 500) I should be able to accumulate about $330,000. The passive income streams I’m trying to create (Oneupblogs.com) will also bring extra income on top of the 4% withdrawal of the $330,000 annually.
Currently, I’m pursuing my passion to have a full-time blog in which I can express my thoughts and feelings. Blogging is very enjoyable; it provides flexibility to not work in an office and it lets me talk to people of different perspectives on different topics. I’m also studying different investment vehicles, like options, crypto investing, day trading, and real estate.
Learning about growing passive income
With a higher salary and multiple sources of income coming in, which I’m praying do come in… I will be able to invest about 80-85% of my income streams because I have such a low standard of living. Earning an extra $500-$1,000 per month in passive income and you’re able to re-invest that, will put you so far ahead of the FIRE game you’ll be successful.
FIRE has taught me you don’t need to be wealthy to build wealth but you do need to start. Also, it showed me to enjoy the simple things in life and not be influenced heavily by worldly objects that I don’t need. I am glad I joined the FIRE movement early. I still have another decade before I choose whether to retire and I can’t wait to enjoy my retirement.
Playing with FIRE (Financial Independence Retire Early): How Far Would You Go for Financial Freedom? by Scott Rieckens
Please be sure to check out our other posts on Business – https://oneupblogs.com/category/business/