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Woman Planning FIRE

FIRE: How Aussies Retire Early with Financial Independence

A movement called FIRE (financial independence/retire early) is catching on as a way to retire at 30. It means living on a budget while saving and investing as much money as possible. Many Aussies are planning to retire at 35 with an investment portfolio worth $2 million, which will not only let them live comfortably but without the need to ever work again.

The key to a smart early retirement plan is to seek the guidance of an experienced financial adviser who can personalise a financial plan for you based on your goals and needs, and then support you on an ongoing basis to refine your cash flow and maintain your investment portfolio.

In fact, the IOOF The True Value of Advice 2020 research paper showed that 90% of those with an adviser agreed that their adviser is a critical partner in their financial success.1

FIRE: How Aussies Retire Early with Financial Independence

FIRE is a big lifestyle shift. It means changing how you think about money and finance. Rather than spending to live, you live to save and invest. Saving is the focus, not spending or getting out of debt. This is not for everyone, but for many, it is the way to financial independence.

A traditional lifestyle is one where people spend money to live. The FIRE movement is the opposite, where people live to save money. It means living on a budget to provide for the future – saving first and then spending.

This lifestyle is simple and frugal, and it takes a lot of willpower to succeed. It’s a different way of life – one that is focused on sacrificing your consumption today for tomorrow. It’s not what you would expect in the traditional sense of FIRE because the savings come first before the spending.

Introducing the FIRE Principles

1 – Frugality

Living on a budget and being frugal is the central idea behind FIRE. Only spending what you can afford is the cornerstone of this movement. Spending less than you earn is the cornerstone of frugal living.

2 – Investing

Investing is central to FIRE. It’s the only way to save enough money to retire early. The goal is to create a surplus of income over the cost of living. That surplus is then invested in savings accounts and investment portfolios – the ultimate goal being financial independence.

3 – Financial Independence

Financial Independence is achieved when you have saved and invested enough money to support your living expenses for the rest of your life. In other words, you can live comfortably for the rest of your life without ever working again.

4 – Retire Early

The ultimate goal is to retire early. No one wants to work forever. Retiring early means you get to choose how and when you want to retire. The key is to live on a budget and create a surplus of income over the cost of living. The surplus is then invested so it can grow to become your financial independence and provides you with the ability to retire early.

5 – Financial Security

Financial security is a key benefit of the FIRE movement. It means that you can live fully and comfortably even when the money runs out. You can retire early, knowing that your future and retirement will be secure.

Ready to Retire Early?

The FIRE movement is catching on. They’re becoming more popular as the internet community discusses the benefits and the disadvantages of such a lifestyle. The movement appeals to those who want to retire early and secure their financial future.

FIRE is not all about spending and saving, but living on a budget and living to save. The ultimate goal is to have a surplus that you can then invest in savings accounts and investment portfolios. The goal is to achieve financial independence and financial security.

If you are looking for the best retirement plans to achieve your goals, come to Coastal Advice Port Macquarie. At CAPM, we guide our clients to enjoy their dream retirement through the delivery of personalised financial advice. Call us or book online to secure your complimentary first meeting with our advice team today!

 

REFERENCES:

  1. https://www.ioof.com.au/financial-advice/the-true-value-of-advice#:~:text=93%25%20believe%20advice%20provides%20clarity,towards%20and%20reach%20their%20goals

 

DISCLAIMER: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Sydney Wealth Advisers, Coastal Advice Port Macquarie and Coastal Advice Ballina Byron are subsidiaries of Coastal Advice Group Pty Ltd which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.
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