Playing With FIRE

Playing With FIRE will teach you how to be happier with your financial life and worry less about money by getting into the Financial Independence, Retire Early (FIRE) movement.

The author discovered that FIRE isn’t just a good idea, but that there are many people practicing it already. As he began it himself, he saw the potential it had to free him of a lot of stressful money woes.

But you might be thinking that super early retirement sounds boring, right? In reality, a lot of people don’t actually completely stop working. They just use the freedom of not having to work for money for better things. Like being flexible with their career, traveling, donating to charity, or pursuing passions.

In 2005 a woman named Sylvia had just completed law school and got her first job in New Orleans. Then Hurricane Katrina hit. The aftermath made Sylvia drop most of her possessions and move.

This sudden loss of her things motivated a change to a more frugal lifestyle. Working extra on weekends and saving like crazy gave Sylvia the opportunity to try beginning her own law firm.

To start with FIRE yourself, find your annual expenses and multiply by 25. That’s the amount that, if you saved and invested, you could live off of forever because of the 4% rule. This comes from a study that found that only withdrawing 4% of your investments allows you to survive market dips and inflation.

If you have $60,000 yearly expenses, for example, you’d need $1.5 million to live only off your investments for the rest of your life!

So you know what the end goal is, but how do you get there? The next step toward financial independence is to look at your finances in detail. You’ll need to maximize assets and minimize expenses. Start by tracking where each bit of your money is going. Look at all spending and savings over the last year. With a FIRE mentality, you should aim to save and invest 50-70% of your income. A good place to begin is with the main expenses of food, transportation, and housing. The author began traveling after he began his FIRE journey but lived with family to cut costs. They then found a more affordable city to live in. Biking to work made it possible to only get one car. For this, the blogger behind the FIRE blog recommended looking for used cars in the $5,000 price range as they don’t depreciate as poorly as leased cars. They needed something that could handle the terrain, so they settled for a $7,500 Honda CRV. Then it came to savings. The author focused on just three types: stock market investments, business…