Financial Independence and Early Retirement (FIRE) is the buzz word and as millenials have embarked on this journey to save money, live frugally and crunched all the numbers in their fancy calculators to estimate a perfectly balanced FIRE number, you have been wondering what’s all the hoo-ha behind FIRE ?
‘ What’s the rush ? ’, you ask.
‘ I’m only 28 ! ’
Here’s 5 Reasons To Pursue Financial Independence Retire Early (FIRE)
1. The Feeling of FREEDOM
You long for that day when you can grab your comfortable chair and that classic novel you’ve always wanted to read and not have to think about which powerpoint template to use for that boring presentation. You’re FREE and while you may not necessarily stop working altogether, you will definitely have a choice.
2. More Time for Loved Ones
‘ We should all definitely catch up like before man. It’s been forever ! ’
You want to spend time with your friends and family, plan a weekend trip to the mountains, give in to those spontaneous plans, but each time you’re too busy or too stressed from being busy to act on it.
FIRE will Make Time
3. Opportunity to say Let’s Do This !
Secretly, each one of us has a when-I-have-enough-money-plan. Whether it is to write a novel, travel the world, read one book a day or simply move to a quiet place to be with nature while you explore your deepest desires, financial independence is the ticket that helps to take you closer to your dreams and say Let’s Do This !
4. Security & Stability = STRESS FREE !
You’re often stressed with your work and schedule, but the underlying reason for stress is to make ends meet and survive. When you are financially independent, you aren’t worried about putting food on the table or paying that internet bill, because you have it covered. Securing one’s finances can be THE biggest cause for stress, and is reason enough to pursue FIRE.
When you are at peace mentally, it is the beginning of a new you, willing to surpass your own boundaries. Having one less thing to stress about in your life is only one of the perks of financial independence.
5. Wealth Building For The Next Generation
Would you rather have your kids learn the act of grinding through survival, or help them learn how to manage money and how to build wealth to be able to enjoy life ?
Age is a major factor to consider when you think about the power of compounding and the sooner you start pursuing FIRE, the quicker you start building wealth and can teach your kids the rules of growing that money tree.
To put this in perspective take this simple example of Ms. X who invested $10,000 at the age of 25 at 7% and Ms. Y who invested the same amount at the age of 30. Assuming the interest rates remain constant, here’s the amounts each one would have accumulated at age 50
Ms. X — $54,274
Ms. Y — $38,697
A simple 5 year difference on a $10,000 investment can cost you nearly $16,000 in accumulated interest.
The sooner you start your journey to FIRE, the faster will you build wealth.
Each one of you may have many more reasons to pursue financial independence, and while there is no dearth of useful information to guide you on your journey to FIRE, it is certainly a goal that demands utmost commitment and dedication on your part.