Starting something new is always exciting (and sometimes scary). So take a deep breath, open your mind and get ready to change everything. Let’s start your Financial Independence journey today…

This blog is all about finding purpose in your life outside of your “9-5” job, its about living life to the fullest whilst also taking charge of it to really enjoy the precious time we have. It’s aimed at 30 somethings who want more out of life than the daily grind.

The most crucial aspect of this journey is achieving Financial Independence (FI) and ‘retiring’ early (RE). But what the heck is that?

Financial Independence Retire Early (FIRE)

Quite simply, reaching FIRE means that the money generated by your assets (adjusted for inflation) covers all of your outgoings; at FIRE, working for money is purely optional leaving time for you to pursue anything else!

The Lightbulb Moment

Think about that for a moment. You can take steps today, to retire early and do then anything you like. Take care of your children full time, work for a charity, travel the world, learn new languages or build your own business. All safe in the knowledge that you are doing it for joy and purpose and not necessarily for money (though you may still love your regular job and want to continue working, though with a little more swagger knowing you can quit any time!).

Say NO to a traditional retirement age

Traditionally, people achieve FI at retirement age around 65 years old. This is great! But what if you can reach FI earlier, MUCH earlier? What if you could retire by the age of 40, or even 30 (if you are lucky to have found out about FIRE in your twenties) and then have a lifetime of deep fulfilment and purpose outside of the rat race? Through some life hacking and intentionality, it’s possible to reach FI at very early ages and possibly in in ten years or less.

Take a look at this really simple explainer video by TwoCents on YouTube:

How to reach Financial Independence?

It’s important to know what you are aiming for and to do this, you need to know what your FI number is (i.e. how much you have in your investment account). As a general rule of thumb, to calculate your FI number you need to follow this formula:

FI = (Yearly Expenses x 25)

So if your yearly expenditure is $60,000, then you will hit FI when you get to $1,500,000. WOW, now that seems like a huge number. But it’s very possible to get there, and get there at warp speed if you follow the key tenets of FIRE below. There are also a number of different types of FIRE which you can read about in our post here.

Once you reach FI, you can safely withdraw a certain percentage (typically 4%) per year and your perpetual money making machine will work for you forever, and be inflation proofed.

The core tenets of FIRE are ridiculously simple, but in practice take a lot of dedication to follow:

1. Know your financial reality – calculate your net worth number and track it at regular intervals (ideally monthly).
2. Save more than you earn – set up an emergency fund, learn to live within your means, and increase your savings rate to as high as possible, 20% is not going to cut it. Think 60%, 70% or even 80%.
3. Do all you can do to earn more – help increase your savings rate by earning more money. This could be through a side hustle or by asking for a salary increase at work. The more you can earn, the more you can save and the quicker you can reach FI. Simple.
4. Invest what you save in low cost index funds – using an investment account, invest your money into the stock market using low cost index funds.
5. Let the magic of compounding make all that money work for you.

If you are itching to start doing something right now, then take the Money Mountain Goat #FruDayChallenge and start supercharging your savings immediately.

These are the basics, follow all the links in this post to read about all the ingredients of FI. If you are stuck and don’t know where to start, then check out this post on the 5 first steps on your road to financial independence.

Useful Resources

Check out the Resources for the bet content on the web on FIRE.

The Money Mountain Goat

This blog aims to set out you need to know to start your own FIRE journey, and will document the ups and downs of the personal journey of the Money Mountain Goat (MMG) at the same time.

I am a 35 year old, single professional who is aiming to reach FI at age 40. Traditionally bad with money, I am a born again FIRE enthusiast.

Let’s do this!

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