FIRE Up Your Life in 2021
FIRE, Financial Independence, Retire Early, is so appealing because it lets you choose your own destiny. FIRE allows you these options because you are the architect of the life you want. You curate your activities and income streams by the things you choose whether its investing in real estate, selling products you create or becoming a YouTube personality.
Financial independence is a process and a mindset. It’s not about reaching a certain net worth or having a specific amount saved that makes you financially independent. Yes, the money part is important. It’s the vehicle to let you choose your dreams. However, dozens of articles outline people who figured out how to quit their jobs and live off of $500,000, a million dollars, etc. in savings. It’s not attainable without prioritizing values, time and energy.
You can be financially independent and still work a nine to five job. You can be financially independent and only work a four-hour work week. You can be financially independent and not work at all. It takes so many shapes because it’s based on what you want–not a framework of what should be.
Take a person who works a full-time job and considers herself financially independent. Why is she still employed? It could be that she’s doing work she loves whether it’s for a nonprofit for a cause that’s close to her heart or because she really enjoys a job she has. Her place in the workforce is a choice. She could have real estate investments that generate $100,000 in income or just $25,000. Whatever it is, she is spending time doing things she loves, or rather, that she chooses.
The Four-Hour Work Weeker
Then there’s the Four-Hour Work Week folks. This person may have an amazing widget that generates all the money he needs. He checks in on his teams and helps troubleshoot issues, but mainly lets the people he hired run the show. Then the rest of the time, he’s traveling the world, learning new languages and training to be an Olympic curler. It’s the same with the Nine-to-Fiver. This person is choosing to spend his time doing the things he loves.
The Frugal Lifer
You’ve read about the people who save a certain amount of money and quit their jobs. This type of person really has to hone in on his or her values because a limit has been set on a fixed budget. A life like this is possible because this person has decided that he can live a certain way based on a dollar value. This can mean all sorts of things like the person only eats Ramen but will spend thousands of dollars on vacations each year. Or person doesn’t value name brand clothes and will only buy used or traded items. A person in this category tends to be more extreme, depending on the size of the pot they have chosen to live off of for the rest of his life.
Generally, people are a mix of these types. The common theme is choices. But how do you choose?
- Determine leisure activities that add value to your life. This is probably the easiest place to start because generally, you know what you like to do when you don’t have work. Do you love expensive wines? Are brand name clothes important to you? Is a fancy car a life goal or dream of yours? It doesn’t really matter what your values are. What matters is what you don’t value. If eating organic isn’t important to you, don’t buy organic food. If you hate going to the gym but love your Krav Maga class, stop paying for gym membership and spend that money on a martial arts facility that supports your passion. You have to sift through how you spend your time and use your money to back the things that you care about. If going drinking every Friday night just kills your weekend and you don’t enjoy it, stop doing it.
- Differentiate what you need in life to be fulfilled. I’m not talking about needs in terms of necessities. I’m talking about lifestyle choices. Do you need designer clothes to be happy or feel good about yourself? Does going out with friends once a week, a month, a quarter fill your cup? Does having that cable package with all the sports games truly provide a value add to your life? If it does, that’s ok. It becomes a budget item on your list. As with item 1, if you’re spending money on material items just to keep up with the Joneses or it’s a habit, stop doing that. Spend money on what matters to you, not other people or an older version of you.
- Devote your time to the activities that allow you to achieve your goals and are the highest and best use of your time. If you need to free up your time to review investment deals, start your virtual cooking class business, let go of whatever it takes up that time or pay someone else to do something that’s eating up important time. This could mean you clean your house less frequently than you normally do, or even hire someone else to do it. Perhaps you decide that to save time and money, you’re just going to eat PBJs for dinner so you can use more of your evening to launch your business. It could also mean getting a meal service so you can free up time you would have spent cooking. Make sure it makes sense. Hiring services is extremely handy, but it might not make good financial sense until you actually have some income going or your business is launched and is earning a profit. Don’t do busy work. This can also pare down to simpler things like reducing the amount of time you spend on social media. Another time suck is e-mails. Get rid of newsletters, retail e-mails and other time-wasters that fill up your inbox. Limit your Netflix time so you aren’t binge watching a show that doesn’t contribute to your financial independence journey.
- Figure out what people in your life add to the quality of your life. Cut out the people that don’t. This is definitely the hardest one. It could mean ending a long-time friendship. If your best friend is your drinking buddy and after meeting up, you regret spending the money and the time you lost being hung over–it’s time to cut the cord. It doesn’t mean that you or that person is bad. It just means that the role that person played in your life is no longer needed. This could go even more deeply to someone like a parent or sibling. Do they support your goals and priorities or are they a drain on your energy? Make less time for these folks and hang out with the people that fuel your dreams and align with your values. It’s impossible to pursue financial independence or any goal if you have someone doubting your potential, questioning your intentions or diminishing your plans with negativity.
- Finally, go live your values. Reduce the crap in your life and focus on the things that really matter.
FIRE is transformational. It’s not easy, but it’s not necessarily hard. MsFIRE Mama is here to help guide you through this journey to achieve what you want out of life. We got this!
What are your questions about FIRE? What step are you most afraid to take? Let me know your thoughts in the comments below.
GET FIRE SMART
- Tim Ferriss’ The Four Hour Work Week Website, Book, Blog, Podcast
- Frugalwoods Blog – Financial Independence and Living Simply
- Kendra Adachi’s The Lazy Genius
- Screw The Nine to Five Podcast: 3 Environmental Factors To Upgrade If You Want To Quit Your 9-To-5