What is FIRE / Financial Independence

FIRE: Financial Independence Retire Early

I’m sure like many people we all know what this is, but I have never been able to put it into words until I discovered the FIRE communities. I have read and heard many stories of success, and many of despair.

Disclaimers: There are valid warnings and disclaimers everywhere in finance. It is a standard part of the discussion around money and investing. People have to tell you what can go wrong. This is important. You must recognise that setbacks can happen, but it shouldn’t stop you from learning, trying, and profiting. Understand the many risks and make sure you have mitigations in place so one setback doesn’t wipe you out for life.

Always remember survivourship bias and that nobody can follow the exact same path as another person. Learn from the survivours, and don’t forget to learn from those who have failed.

Never forget the importance of understanding the Greater Fool Theory and always look to understand what the underlying value of an opportunity is.

Yes there is some skill involved, some personal discipline, and of course a handful of luck. Some argue that luck can be created, I actually believe this, luck doesn’t happen completely by chance.

And always remember, if it sounds too good to be true, it probably is. Don’t fall for scams. Create a community of trusted friends and advisors, and speak openly with them.

Is it about Retirement? What would you do with your time?

Financial Independence isn’t about retirement, it is about options.

If you are free to walk away from your current job, what would you do instead?

There are terrible options: drink your life away, sit inside and become a hermit, or party until you’re poor again.

There are great options: find a job doing what you love, leave that job that is creating a lot of stress, help others, improve humanity, enable progress…

With Financial Independence you get to sellect your future path.

Importance of Financial Independence

Financial Independence is about creating options. As you move towards your goals it can be difficult to see all of the options available, however as you progress and explore, new options will start opening.

You will begin to notice that the earliest result of your actions creates the ability for you to take a risk. Very quickly you will be able to do something new with more confidence. If that new action results in a possible reward you may find you can quickly and more confidently take another risk.

Being on the FI journey can help in situations if something goes wrong. Car breaks down? Need to move to another rental property? Need to change job?

Being on the FI journey is about more than having a savings account for a “rainy-day”. It’s about permanently changing and improving your life.

Financial Independence is about being rich, doesn’t that make you a bad person?

Many people criticise billionaires because they’re rich, without understanding how they became billionaires or what they’re currently doing for humanity. I’m sure we can name some rich people who are worthless for society, but that’s not all of them. There’s definitely a few rich people who are actively making many lives better.

Being rich doesn’t make you a bad person. Don’t be afraid of success. When you are rich, the same with being poor, you get to choose if you’re a good person or a bad person.

People criticise everything. Most criticism comes from misinformation, misunderstanding, or jealousy. Sometimes a combination of many factors. Unfortunately it is a part of life for those who have succeeded.

There are worthless people who are rich, there are valuable people who are rich, there are valuable people who are poor, and there are worthless people who are poor. It’s not the wealth that makes a person good or bad, it is the actions of the individual that matters. Sadly, it is easier for rich people to have the ability to do more. Most people have good intentions, only a few have the ability to make changes.

How long does it take to get Financial Independence

Do you mean I can read about Financial Independence and that’s it? Job done? Set for life?

I always believe that if you want a fulltime-salary you must work fulltime-hours. This means no matter what you do, you have to put in the time, effort, and dedication.

How long it takes depends on so many factors, including:

It’s not all about earning the most money, but it helps…

Most people who I follow that are on the journey or are nearing completion state openly to expect a minimum 20 year journey. But this doesn’t mean you have to wait 20 years for results. Check out the Fire Ladder post for ideas of some of the benefits you can get by starting this journey.

Have you done it? Tell me how!

I am on a journey. It is a life-long journey.

Can you do exactly what I have done so far? No. Everything is different every day. I am happy to help you understand options and build your own unique path. I will never tell you what to do. Anyone that tells you what to do isn’t worth listening to.