Last Updated on August 12, 2021 at 7:51 am
I often get emails from readers who wish to achieve financial independence as soon as possible and retire early from their salaried jobs. The first question I ask is, “why do you seek early retirement?” Some people offer a crisp, clear response: “I have always wanted to pursue my passion in the fine arts; I have an idea which I would like to monetize with a start-up”, etc.
Many responses are vague, “I have always wanted enough money to travel the country or the world; I believe in the FIRE moment”, etc. So this makes me want to ask: Why do you desire financial independence early in life? Is it because you hate your job? Is it work stress? Poor work-life balance? Has work from home make things worse for you?
This is the typical stimulus for desiring FIRE. There is nothing wrong with this at all. This is a solution, not the only solution. Wanting to travel more is a desirable, doable objective but that cannot be the only objective for the rest of our lives.
Seeking early financial independence comes loaded with sacrifices. We will need to invest each month anywhere from 2-3 times our monthly expenses. This means less splurging on devices, holidays, entertainment etc. Is this sacrifice worth it when you are young? Particularly if you do not have a clear plan of what to do after FIRE. I am not suggesting one way or another here. Only pointing out that the importance of such questions.
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Can we address work-stress and poor work-life balance with a change in outlook instead of FIRE? Can we work on our time management to find some leisure time each week? Can we convert “aimless time pass” to learning new things? Can we learn to develop a sense of detachment from the office? Will doing this regularly reduce our frustration? There is a good chance it might.
I am not trying to say aiming for early financial independence is wrong. Just pointing out that is the not solution for our work frustrations if we do not know what to after. Extreme steps are not always necessary in life. A judicious mix of regular investing (an amount = monthly expenses), leisure, health, fitness can help us lead fulfilling lives.
The FIRE road is long and excruciating. Discipline plays a huge part, but luck can swing it from good to bad. More importantly, our work-frustrations will be unchanged during this time.
FIRE Dos and Dont’s
- What will do you after reaching financial independence? Unless you can answer this question, seeking FIRE has no meaning.
- Do not deprive yourself too much of wants in the journey to FIRE. Life is short. As long as your want does not cost the moon and does not interfere with investing for normal retirement – which is 50, not 60! – go ahead and enjoy.
- Actively seek ways to get some leisure time. Use it to think about your future and be creative.
- Health and fitness come above all else.
- Strive to reach a work position where you can afford to “say no” to additional assignments and workload. If you are in your early 20s, additional qualifications is a good way to get there quicker.
- Parents should teach children about the importance of regular leisure time and what they must do to enjoy this all their lives.
The accidental early retirees
Many people in my age group (45-50) have hit financial independence, and some have even quit their regular job for a second career. See, for example, Early Retirement at the 40s in India with financial independence: An Interview and How I achieved financial freedom and became an Investment Advisor!
I personally know quite a few people in this group (including me!) who did not plan for this. They suddenly realised that they had become financially independent and then planned a second career.
Maybe I am over the hill, but this route to financial independence is a lot more appealing: Put your head down and work; smartly invest as much as possible; do not let the work get to you; do not deprive yourself of reasonable wants; stay fit and balance work, family and personal needs. Maybe one day, when you look up and take stock, you will become financially independent.
Do not whine… Do not complain. Work harder. Spend more time alone. Author Joan Didion
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