Choosing to FIRE is the easy part. Living a FIRE life is more challenging, especially when most of your friends and family are still living their ‘normal’ life. Although our 3 years break was a God saving from our stressful careers, the rest of our life still needs to be written.
Living the “normal” life
Living a typical life means going through the motions of society’s expectations. From childhood, we are told to eat our vegetables and go to school. Then, we are expected to find a job, get married, have children, buy a home, and work until retirement. This cycle is what we are conditioned to believe is the “normal” life.
However, the path towards Financial Independence Retire Early (FIRE) challenges this notion of a “normal” life. It takes a lot of hard work, discipline, and sacrifice to achieve financial freedom and retire early. And even then, the journey towards FIRE is not easy.
Taking the red pill and discovering FIRE
Discovering FIRE and deciding to take the path towards it is like taking the red pill. Once you’ve seen the possibilities of early retirement, it’s hard to go back to living a “normal” life. However, the decision to pursue FIRE comes with its own set of challenges.
“If it were easy, everybody will do it”
What are you giving up?
For starters, the decision to retire early means giving up a steady stream of income that can make it difficult to maintain your current lifestyle. This can be a difficult decision to make, especially when you’re in the prime years of your career. Additionally, there is always the fear of the unknown, especially if the stock market crashes or if you encounter unexpected expenses.
Money
Money is the most obvious thing that you give up when you retire early. A steady salary, good bonus or even some unvested shares can be hard to leave behind, especially when you’re at the peak of your earning potential.
Financial security
But does the money matter that much anymore? By now, you should have mastered your finances (expenses, budget, investments…), so money should not be an issue. However, the fear of the unknown can still linger in your mind. What if the market tanks by 30% after you waved goodbye to your boss? You might still feel that something is wrong. But if money isn’t the missing piece of the puzzle, what could it be?
Social status
In addition, retiring early also means giving up social status. While working, you were expected to wear your “active person mask”. It was normal to not like a job, so much so that people may be suspicious if it you enjoyed it. Although not enviable, it was the life that almost everyone passively accepted without questioning nor resistance. Retiring early can also mean giving up the prestige and social status that comes with certain careers.
What are you gaining?
15 weeks of holidays
Once you’ve achieved FIRE, you can enjoy as many weeks of holidays as your children. When you account for summer, Christmas, Spring, Easter and a couple of other national days, you will likely enjoy 15 weeks of holidays. Additionally, you can also plan and take time off from home even during school week. Last winter, after a fresh snow fall, we enjoyed great ski rides during weekdays, while kids were in school.
These new holidays will dramatically change your perspective on managing your free time with your family. It is important to plan in advance and take time off from home even when you are retired.
5% of your kids life per year
Likely, your kids will go study outside home after 18 years old. Afterwards, they may come back home only every other holidays. And after graduation, you might see them only a few time per year. Thus, the time you spend with them before they become adults will be the most significant. Every year with them will account for about 5% of the time that you will be together.
Full control over time management
Pre-Fire, you don’t realize how little control you have over your time. Your time during office hours represents half of your waking hours. Professional responsibilities or demanding customers are actually driving how your time is spent.
“I am the master of my fate, I am the captain of my soul.”
Invictus, BY WILLIAM ERNEST HENLEY
After achieving FIRE, all this obligations are gone, and you become the master of your time. Your calendar which was overly busy, is now fully clear. It is surprising at the beginning, but don’t be surprised by how much your kids’ activities are promptly filling up the void in your calendar! If you have passions or interests, these will be a new beginning when you can devote as much time as you wish. You have worked very hard and earned to right to spend your time the way you want!
Better health
Now that you have so much free time that you can allocate to perform activities that you enjoy, you realize that you can’t have enough of it. Indeed, days are too long at work, and too short on holidays. In order to maximize the time and your quality of living, you might consider that getting healthier is also a priority.
In addition to watching your diet, exercising, and getting a good night’s sleep, there are other ways to improve your health during your FIRE journey. You can take up a new hobby that promotes physical activity, such as hiking, dancing, or swimming. You can also try out meditation, which has been shown to reduce stress and anxiety levels. Additionally, you can take advantage of your newfound free time to schedule regular check-ups with your doctor, dentist, and other healthcare professionals.
Geographically mobile
How about your dream trip that you have been thinking for your whole life? How about the yoga and mindfulness retreat that your body and soul has been craving for? How about just enjoying a slow pace holiday across Thailand? The world is now opened to you without (or much fewer) constraints. If you have kids, your major constraints will be the holiday schedule of your children.
Even with children, you can still relocate to another country. It will be a fantastic life experience for the whole family. You will discover a new culture, a new language, and new food.
Being geographically mobile during FIRE also means that you can take advantage of different tax laws and lower costs of living in other countries. For example, many retirees move to countries like Mexico or Panama, where the cost of living is much lower than in the US; or Spain and Portugal who offer a warmer weather for a lower cost of living in Europe; or even Thailand or Malaysia to add more new experiences. If you want to learn more, I would recommend you to read my previous post How to tackle Spain’s tax system for early retirees, or How to get residency visa to FIRE in Thailand?, or even How to successfully settle for FIRE in France?. Additionally, many countries offer retirement visas or residency programs that make it easier for retirees to settle down and enjoy their new surroundings.
What does it take?
Changing Your Mindset
Achieving FIRE requires a shift in mindset. You need to start thinking about money in a different way than you were taught in school. Instead of spending every dollar you earn, you need to start saving and investing for the future. You need to stop worrying about keeping up with the Joneses and focus on your own goals. This mindset shift can be difficult, but it’s necessary if you want to achieve financial independence.
Living Below Your Means
Living below your means is an essential part of achieving FIRE. You need to be able to save and invest a significant portion of your income to reach financial independence. This means that you’ll need to cut back on unnecessary expenses and live a more frugal lifestyle. If you are curious, you should read How to get a 5% or 10% increase?.
Investing Wisely
Investing your money wisely is crucial if you want to achieve FIRE. You need to invest in assets that will grow over time and provide you with a steady income stream. This means that you’ll need to do your research and find the best investment opportunities for your situation. ETFs are widely used by the FIRE community, and you may want to look at How to choose a good ETF?.
Building Multiple Streams of Income
Building multiple streams of income is another important aspect of achieving FIRE. You may need to have more than one source of income to ensure that you can weather any financial storm that comes your way. This means that you’ll need to find ways to generate income outside of your regular job.
YOU are now in charge!
Most of your life, you have been making decision to satisfy your parents, your bosses, your customers because you needed the money to survive. Now that making extra money has a very marginal impact, money should have a relatively minor effect on making a decision. I say ‘should’ because it takes time to unlearn or change the behaviour that you just got so used to your whole life.
Recently, I have been offered to be a co-founder of a start-up in a field of my interest. I have been working for free for the past months and really enjoyed it. However, when faced with a full-time commitment over the next 4-5 years just to get some extra buffer, I struggled to decide. In the end, I realized that my freedom to manage my time was paramount. I might continue as a consultant or not. But I won’t replace my ex-boss with investors or clients.
Now that you are in charge of your own life, you can pursue your passions and interests without worrying about what others think. For example, you can start a business, volunteer for a cause you care about, or write a book or a blog. You can also take the time to learn new skills or take classes that interest you. Whatever you decide to do, remember that your time is your most precious asset, so make sure to use it wisely.
Time is your most precious asset
Even when you have reached FIRE, you might still encounter new life crossroads. These new experiences can be very tempting. It can be a way to get back what you gave up: financial reward, social status, career advancement… Nevertheless, it’s important to regularly assess whether the trade-offs you made were worth it. Did you sacrifice too much for financial independence, or are you happy with the choices you have made? It’s okay to change your mind and adjust your plans as you go along. Remember that the ultimate goal of FIRE is to create a fulfilling and happy life, so make sure to enjoy the journey along the way.
What have you gained and lose in your fire journey? Were the trade-off worth it? Would you have any regret? Keep things simple and enjoy a happy FIRE journey!
Image credit: Photo by Elina Fairytale