The FIRE revolution

Thrugelmir

Spam reported. 

barnstar2077

I'm not sure if I would qualify as FIRE, but I live on half my money and invest the other half.  Most of which goes into my pension, and the rest into a SIPP to cover the gap before I can access my pensions.  In theory I should be able to retire by 55 at the latest.

Living on half your salary may sound impossible to some, but from my early twenties I decided to keep my expenses low (I cycle instead of owning a car for instance) as I couldn't guarantee that my next job would pay as well as the one I had at the time, and I also wanted to be able to turn off my spending and save large amounts of money at short notice to pay for one off bills or big purchases.  So far, it has worked for me.

Nothing I have read regarding FIRE has ever suggested doing the kind of gambling suggested in the original post.  Quite the opposite really.  FIRE is normally about living a frugal life style and investing to gain financial independence in a very mathematical way, eg if I live on half my salary and save half my salary then every month I am banking a month+ of not having to work in the future.

barnstar2077

I just realised how old this thread is.  Weird. 

Thrugelmir

barnstar2077 said:

I just realised how old this thread is.  Weird. 

Was spammed earlier today. Now removed. 

barnstar2077

Thrugelmir said:

barnstar2077 said:

I just realised how old this thread is.  Weird. 

Was spammed earlier today. Now removed. 

Ahh, that makes sense! : ) 

DireEmblem

barnstar2077 said:

I'm not sure if I would qualify as FIRE...

There is two key components - the Financial Independence, and Retire Earlier.  Thats how I read it.  If you can balance your own books, so incomings > outgoings, then you are technically financially independent in my opinion and half way there.

The second part to me, is all about looking after the pennies and the pounds take care of themselves type of scenario.  It sounds obvious, but look at reducing your outgoings as they are more in your control(walk if you can to work rather than bus/car), and then work on your earnings.  This part is all about compromise towards the goal of retiring early, and putting your spare pennies to work.

You are well on your way, well done.

Apodemus

DireEmblem said:

There is two key components - the Financial Independence, and Retire Earlier.  Thats how I read it.  If you can balance your own books, so incomings > outgoings, then you are technically financially independent in my opinion and half way there.

I've always understood Financial Independence to mean that you have sufficient passive income to cover your outgoings, without the need to undertake any actual labour. So in terms of FIRE, the FI is the point at which your investments are capable of sustainably meeting your needs for income, and consequently the point at which the RE becomes a realistic option.

Eco_Miser

Apodemus said:

DireEmblem said:

There is two key components - the Financial Independence, and Retire Earlier.  Thats how I read it.  If you can balance your own books, so incomings > outgoings, then you are technically financially independent in my opinion and half way there.

I've always understood Financial Independence to mean that you have sufficient passive income to cover your outgoings, without the need to undertake any actual labour. So in terms of FIRE, the FI is the point at which your investments are capable of sustainably meeting your needs for income, and consequently the point at which the RE becomes a realistic option.

If you have sufficient capital to cover your outgoings for the rest of your life, you are also Financially Independent, even if you have no income.

In practice, most people combine investment income with capital drawdown and, eventually, pensions.

The famed 4% SWR is based on a 30 year retirement, with no capital left at the end, in the worst case scenario.

MaxiRobriguez

barnstar2077 said:

I'm not sure if I would qualify as FIRE, but I live on half my money and invest the other half.  Most of which goes into my pension, and the rest into a SIPP to cover the gap before I can access my pensions.  In theory I should be able to retire by 55 at the latest.

Living on half your salary may sound impossible to some, but from my early twenties I decided to keep my expenses low (I cycle instead of owning a car for instance) as I couldn't guarantee that my next job would pay as well as the one I had at the time, and I also wanted to be able to turn off my spending and save large amounts of money at short notice to pay for one off bills or big purchases.  So far, it has worked for me.

Nothing I have read regarding FIRE has ever suggested doing the kind of gambling suggested in the original post.  Quite the opposite really.  FIRE is normally about living a frugal life style and investing to gain financial independence in a very mathematical way, eg if I live on half my salary and save half my salary then every month I am banking a month+ of not having to work in the future.

Well, I consider myself as following the FIRE principals, if not to the extent some do. I have 40% of pre-tax salary going into my pension and 14% into a S+S ISA so broadly similar to you, but I also count 13% to mortgage payments as ultimately that's improving my net wealth with every payment made.

I have scenarios ranging from 48 through to 63 as retirement ages, depending on the performances of my investments over the next 15-30 years. (7.5% and 2% compounded respectively)

Our first born is due summer next year which may change things though. Going to be interesting to see if we can fit in what he's going to cost us without sacrificing savings and investments.

Thrugelmir

If it sounds too good to be true then it is. Low risk 15% returns. Pull the other one.