We’ve written a post before on how to reach FIRE, it’s been one of the more popular pages on this blog so now I’ve added it to the header and done up an easy-to-read infographic to help – see here and below.
Starting on the journey to achieving FIRE can be daunting, especially when you’re not sure where to start. However, by breaking it down into manageable steps, it becomes much more achievable. Take a deep breath and remember that every step counts towards your end goal. It’s never too late to start, so start small and work your way up.
In speaking to people and my personal experience as well, I find there are three stumbling blocks to the FIRE journey:
- Disbelief – is this even possible? Well, the numbers hold and don’t lie. As long as your projections are realistic and prudent, you should be safe barring for unpredicted circumstances. Even for that, you can build in sufficient buffers if you would like (of course that means a larger investment nest).
- Where to Invest. Personally, one of the biggest challenges I faced was deciding where to invest my money. Luckily, my partner takes care of that aspect, but for those who need a little guidance, we have a helpful video on our website that explains the basics of investing and building a strong investment portfolio (the 3rd link below). Here are all our videos (it will open on YouTube):
- Staying motivated and on track, it is a fairly long journey after all. Impatience often strikes, I know.
- I found a cool trick to motivate yourself on your FI journey is to use baby milestones to measure your progress. You can start by identifying recurring expenses and calculating how much money you would save once you hit your FI target. For example, if you have a weekly dinner routine that costs $100 (i.e. $5,200 a year), and you’ve attained a passive income of $10,000 per year, you can calculate that your weekly dinner routine is covered for the next 30 years. These baby milestones can be fun to track and celebrate, and they can give you a clear picture of how much progress you’re making towards achieving financial independence. By breaking down your FI journey into manageable, bite-sized milestones, you can stay motivated and focused on your longer-term goals.
- These shouldn’t stray from more traditional milestones like below (you are free to personalise this yourself):
- Positive net worth
- 1-3 Years of expenses saved
- Semi-FI: 12.5 years of expenses saved
- Lean FI: Basic living expenses covered at a 4% withdrawal rate.
- Flex FI: 15 – 20 years of expenses saved
- Full FI: 30 years of expenses saved
- Fat FI: 40 – 50 years of expenses saved
Remember, achieving FIRE is a journey, not a destination. It takes time, patience and persistence. Lots of humour certainly help and an enjoyable journey is crucial as well! Ultimately, the rewards are worth it. Good luck and have fun!
