Want to Retire Early? Here’s How It’s Possible

Do you plan on retiring early? Are you into the idea of the FIRE movement?

As the world changes and more traditional jobs become relics of the past, folks are looking to retire earlier so that they could enjoy life. More and more people are joining the early retirement movement and I don’t blame them.

How’s it possible to join the FIRE movement? How can you retire early?

The FIRE Movement

Our parents and previous generations would work the same job until retiring at 65. Then they could finally do the things that they wanted to do. Then something happened. Folks started to question the idea of waiting until 65 to enjoy life and do what we want to.

Why can’t we retire earlier? Why can’t we explore the world when we’re still youthful enough to have the energy to gallivant? 

I wrote about early retirement on here recently. I wanted to explore this topic so that I could learn more about the FIRE movement and what it has to offer. I ended up learning a lot from my research and from what you guys had to say about it in the comments. I’ve always been into saving money. I just didn’t know how extreme I wanted to go.

The hidden gem of this blog is often the comments and insights that you guys share with us. I was excited to see that the man behind the Early Retirement Extreme movement himself, Jacob, stopped by to respond. I wanted to share these comments with you guy along with some additional research on the pros and cons of the FIRE movement.

What’s the logic behind the FIRE movement and still trying to make money?

A major criticism of the FIRE movement is that many of these folks still work or still have some sort of an income/business where they make money.

What’s the deal with that?

Jacob on the criticism of trying to sell books with the early retirement movement…

“If the point is to sell books or pageviews, it’s much better to write easily digested and semi-controversial posts for the working masses who clip coupons or dollarcost average into low-fee index funds. Plenty of advertising money there. Even better, real estate seminars and get rich quick schemes.

I can pretty much guarantee that writing about how to question society and how not to spend any money at all is going to backfire spectacularly if you try to monetize it—I mean, who is going to click on it? Think about it! I’ve had people telling me that they’ll be waiting 6 months to get my book from the library in order to save $10.

In any case, trying to decide whether someone is “retired” based on whether they used to be an athlete or an astronaut and now works in a bicycle shop, or whether their BFF or second-cousin’s dog still works, or whether they mow their own lawn (hey, that’s a kind of work, isn’t it?), or exactly when a hobby becomes work (IRS definitions, anyone?), or whether they beach-sitting quota has been fulfilled is a semantic and idiosyncratic non-starter and best avoided.

To me retirement is simply a frame of mind achieved once you have enough money in perpetuity to tell anyone, including managers, that you’re leaving now because you have better things to do.”

How do you cut your expenses down to make this possible?

Jacob then explained how he managed to reduce his expenses and live off so little…

“For the record, I’ve been living on $7,000/year for almost 12 years now. Making money doesn’t change that. Money doesn’t matter when you’re almost completely self-reliant and don’t rely on spending money to be happy. I have more money than I know what to spend it on.

I believe in voluntary simplicity as a lifestyle and in “doing” instead of “buying”. I’ve believed in that for over a decade and don’t foresee changing these beliefs anytime soon. This lifestyle leads to increased self-reliance, less waste, self-discipline, and more opportunities from having excess money and not being tied down by stuff and obligations like jobs and bills.

The more you know, the less you need.

I realize that this gets certain people’s goat(s) because it’s a rejection of consumerism and common materialistic values. Quoting Tyler Durden: “You’re not your job. You’re not how much money you have in the bank. You’re not the car you drive. You’re not the contents of your wallet. You’re not your khakis.”

And you’re not how much you spend per year either. Try asking a consumer to describe who they are as a person without referring to their job title. Try asking them to describe what kind of life they’re living without referring to their spending. Many can’t. I think that’s sad.

But to each their own.

The point being that with our combined savings, DW and I have enough money and skills to live off of our interest income for the rest of our life. So we aim to do whatever interests us. It doesn’t matter if we have a job; if we sit on a beach; if we sit in a plane flying somewhere.

We do what we want. Currently DW is back in school for yet another degree putting a few more letters behind her name and I got a gig as a trader on LaSalle St. staring at numbers. We’re both intellectuals, so we like to try new things. Mostly the kind of things and experiences that have to be earned.”

It seems like those who embrace the FIRE movement are still able to work fun gigs that they enjoy on their own terms.

What are other experts saying about the FIRE movement?

Dave Ramsey wrote about the FIRE movement:

“For those in the F.I.R.E. movement, ‘financial independence’ doesn’t just mean sitting on some tropical beach or playing golf all the time. It means reaching the point where you don’t have to work a full-time job if you don’t want to. You can scale back to a part-time job or simply stop working altogether. The choice is yours.”

Mr. Money Mustache shared his thoughts on flack that the FIRE movement has received:

“Everybody uses the FIRE acronym because it is catchy and ‘Early Retirement’ sounds desirable. But for most people who get there, Financial Independence does not mean the end of your working career.

Instead it means, ‘Complete freedom to be the best, most powerful, energetic, happiest and most generous version of You that you can possibly be.’

Does this mean you will quit commuting through traffic into a lame corporate office to sit in meetings about products you don’t really care about? Yes.

This article on The Globe and Mail has a different perspective on the FIRE movement:

“F.I.R.E. is a polarizing concept that sparks fierce debate among those who praise the hard work and frugality that comes with retiring young and those who believe these people are sacrificing too much to exit their working life early – only to wind up bored without a job to go to every day.”

The New York Times wrote this interesting piece on retiring early with some cool tidbits:

“Some practice ‘lean FIRE’ (extreme frugality), others ‘fat FIRE’ (maintaining a more typical standard of living while saving and investing), and still others ‘barista FIRE’ (working part-time at Starbucks after retiring, for the company’s health insurance). To be ‘Firing’ is to slash one’s expenses to maximize saving while amassing income-generating investments sufficient to support oneself. To have ‘fired’ is to have achieved that goal.”

Everyone has their own retirement plan. If you’ve thought about early retirement, this is how you can pull it off. The trick is to focus on decreasing your expenses while you try to increase your income. Then you save as much as possible to be able to live the good life and quit that job you hate so much.

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