What is FIRE?

Financial Independence and Retire Early

The idea of FIRE has been spreading rapidly over the past few years, it’s a way of breaking out of the hamster wheel, and not letting society choose when you should retire, but rather leave it up to you.

As the term implies, its about achieving financial independence, so you dont have to rely on getting a salary every month, but instead having enough money invested, so that you can live of the interest, profits or returns of your investments.

Why are people seeking FIRE?

There is lots of different reason people seek FIRE, for instance in the European Union the retirement age is about 65 years on average, and in America, its 66 years and 2 months.
But the age of retirement gradually increases as people live longer, and in wealthier countries people are getting fewer and fewer children, so there will be less people in the future to support the economy, and pay for the retiring generations pension. 

As of now, in Denmark where i live, I can retire once i turn 68, and on average men life till they are almost 79 years old.

That’s almost 50 years of work for 11 years of retirement

To me, and a lot of other like-minded, that doesn’t seem like a fair deal, I would prefer to choose for my self when I would like to retire, and not let society dictate it. 

Therefore a lot of people are without even knowing it seeking the RE part of FIRE.

They want to retire earlier, so they can have a lot of years to enjoy their senior years, without having to work.

What is FIRE to me?

In my opinion when FIRE, its a very individual journey, you have to sit down, and figure out with yourself how you want to life your life, while saving and investing enough money, to one day being able to live of your investment. 

Currently, I’m living in a one bedroom apartment with my girlfriend, space might feel a bit tight, and my girlfriend keeps asking for more wardrobe space, but the rent is very affordable, which enables me to save and invest a large portion of my income, and as of now about 33% of my income goes to investments, 20% goes to paying back the loan i took when i bought my apartment, so that’s a saving rate of just over 50%

Appreciate what you have

Both my girlfriend and I, have been very fond of traveling, I feel very fortunate having been able to see a lot of the less developed world, which i also hope we will be able to continue to do in the future.

Swamp house in Cambodia

It really puts everyday problems into perspective, and makes you appreciate what you have a lot more. 

My girlfriend and I are both 27 (2018), we have no kids
Hopefully that will change in the next few years, but then we will also need more space, so i have decided to stay flexible and open minded, and just invest as much as possible now, while i can.

Financial independence

FI in fire stands for financial independence.

To achieve the retire early part of FIRE, you will need to have some sort of financial independence.

You will have to be able to support yourself, without having an income.

I have written another article mainly related to my motivation for financial independence.

Of course one of the most important parts of achieving FIRE, is to make the right investments.

Good investments should hopefully supply you with a good return over whatever period you have set.

Make sure to check out how it is going with my investments here.

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