Do you want to learn how to retire early? A lot of people who first hear about the FIRE (Financial Independence / Retire Early) movement are put off by thinking that they need to know a boatload of information about investing and personal finance in order to benefit from the concept.
These people sometimes ignore the movement, never to hear about it again without realising that they’d just stumbled upon a gold mine.
FIRE is actually an incredibly simple concept which anyone can follow, the information out there should represent this. So, I’ve compiled a list (in priority order) of the 10 basic steps that you need to follow to obtain financial independence.
1. Know thy spending
Create a budget and stick to it. Understanding your outgoings is a fundamental step on the pathway to financial independence.
2. Do not buy gluttonously
Don’t buy what is not needed, it will only bring unhappiness and increase your working life.
3. Increase thy savings rate
Your savings rate is the magic number which will dictate how long you have left to work. Increase your savings by budgeting and being frugal, this will help financial independence come sooner.
4. Fill thy emergency fund
Aim to save 3 months of expenses for an emergency fund. This money will give you the flexibility to not need to take out credit when things go awry.
5. Invest in low-cost index tracker funds
90% of people who try to beat the market lose. Invest in low-cost index tracker funds to guarantee a steady return over a long time period.
6. Choose free time over material possessions
Spend your money on the things that matter: time. Whether that’s on yourself or with your loved ones, material possessions will never bring you the same level of prolonged happiness.
7. Take pleasure from manual labour
Our bodies were built for manual labour, practice taking pleasure from it and see your money grow as well as your happiness.
8. Increase thy income
The more you earn, the more you will be able to save. Focus on increasing it as early as possible, back off only when your stash is sufficiently plump.
9. Seek joy from the things that truly matter
Look within yourself to understand what truly makes you happy, pursue what you find with passion and set yourself up for life after reaching financial independence.
10. Become a renaissance man
Move away from the singular pinpoint learning that you needed in the rat race, move towards learning many skills.
Now, go forth and prosper :)