FIRE: Financial Independence, Retire Early

I spent a lot of time reading specifically financial sort of stuff and business related stuff throughout the week. And just making sure I stay on top of trends that are happening and all that sort of stuff. And if you spend any time at all on the internet, maybe even social media or just looking through general news articles. I’m sure you’ve come across one of these articles that talks about some person that’s 30 or early 40s that’s retired and they’re living this luxurious retirement lifestyle and you’re thinking to yourself, how do they do that or what the heck? So there’s a term out there, retire by FIRE. FIRE stands for Financial Independence Retire Early. And this is gaining some momentum around. And I think it’s gaining it more from like I’ll say a younger generation, Millennials, you know that sort of group. Where they start there looking out. They’re oftentimes that maybe parents or grandparents that they’re saying they’ve worked their whole life and now this retirement seems like such a short piece of that. I want to have it the opposite. I want to have my retirement be the bigger piece. I want to work a less amount of time. That all sounds great, right? But they’re figuring out ways to do that. You know there’s a couple of different versions of this FIRE and I’m primarily going to talk about one of them on this. But just know that there’s a couple of different versions of this. But the concept is, is that basically you’re going to live more of a frugal lifestyle and live like you’re in retirement even while you’re working. So you’re putting away a much bigger portion of your income knowing that you’re going to need this for a longer period and you’re going to have shorter period in your accumulation phase, okay? You’re also probably going to do without many things. Some of these folks are not having children, not all, but some are not having children. They may not be owning homes. They might only have one vehicle versus two. They might not be taking vacations because they know they’re going to have all of this opportunity later on. So there’s different things that they’re kind of foregoing to try to get to this retirement faster, okay? Because they know this accumulation phase is where you’re accumulating assets to retire. They say you’re practicing living in retirement basically from very early on. Also, you recognize there’s going to be challenges. It’s not all going to be perfect. It’s not going to go from, you know you’re going to come across challenges in why you’re accumulating it. And you’re going to come across maybe challenges in retirement. So again, because you’re shortening the time horizon on the accumulation phase, but extending it on the retirement phase. It’s going to cause some different things. And they’re having very specific goals. So they’re taking this retirement date of whether they want to retire when they’re 40 or 45 or whatever the time is and they want to have very specific goals and then they’re working backwards on how to get to those goals. So kind of the take away is here when you’re reading those articles and you are hearing about these people that are retiring early, some of them are kind of having this FIRE approach. And they’re practicing this and they’re doing that. And there’s of course there’s always the one that hit it big and won the Lotto and retired or whatever. But the thing is, is you’re going through this. And maybe you’re in this situation and you’re doing that. It’s an interesting concept, right? We all, many of us, I shouldn’t say we all, many of us would want to extend our retirement if we could and have better, more years than that. We don’t want retirement to be so late in life we can’t enjoy the things we want to do. But we want to have that time and enjoy that. So there’s different pieces of that and it’s not for everybody, right? That’s a piece of that. But the financial independence part, we all want to be financially independent. That means different things to different people. But when in retirement, we always talk about there’s a fundamental change in your life. That fundamental change goes from having a paycheck and earning that and having that consistent coming in to now having this. You’re no longer contributing. You’re no longer having the consistent income. You’re responsible and your money is responsible for producing that. So it’s a fundamental change. Being financially independent allows you to do those things and have those with confidence so you can produce that income and live the lifestyles that you so want to. So if you’re somebody that’s hoping to retire early or retire at any date for that matter. Centennial Wealth Advisory, that’s what we do is retirement planning and helping people of all ages, help them build a plan for their retirement so they can plan on the income, investments, taxes and estate and health insurance.