5 March 2016 –
So what does FIRE’d mean?
FIRE is a term that refers to Financial Independence and Retiring Early. While both financial independence and early retirement have a lot of commonalities, they are not exactly the same.
So what is the difference between financial independence and early retirement?
Most people think of retirement as a bunch of old people sitting around an old folks home waiting for the end.
But my preferred definition of retirement is that it is reaching the point in your life when you finish full-time work, whether it’s 30, 40, or 75.
In fact many people finish their full-time career and then continue working for many years afterwards either part-time or getting much satisfaction from doing volunteer work.
The key point is, that you can focus on doing whatever you chose to do each and every day without being reliant on that regular pay cheque.
Financial independence, however, is that the glorious day when you finally realise that you no longer have to go to work for the money.
Essentially, the money you have invested and saved provides you enough of a passive income that you no longer rely on a traditional work-based income anymore. That’s the day you can choose to give up work if you want to.
The key to this is……it’s not how much you earn, but how much you save.
I’ll show you how simple this can be done. It may seem a little daunting at first but you can do it. It just takes time and effort but take it from someone who’s done it, it’s a goal well worth reaching.