With the 1992 best-selling book, “Your Money or Your Life,” people started thinking about becoming Financially Independent enough to Retire Early. And so, the FIRE movement began.
Investopedia says followers of the FIRE movement save up to 70% of their income. Eventually, they quit their jobs and live solely off small withdrawals from their portfolios.
Continuing, Investopedia points out, “Millennials in particular have embraced the FIRE movement with the aim of retiring well before the age of 65. Once their savings reach approximately 30 times their yearly expenses, often roughly $1 million, they may quit their day jobs or completely retire from any form of employment altogether.”
Have You Considered FIRE?
If so, have you noticed any challenges during 2020? It’s important to stay on track especially in a volatile market.
An article at Ticker Tape outlined three ways to potentially protect your portfolio during uncertain times.
- Review Needs vs. Wants
“Figure out your ‘need to have’ and ‘nice to have’ spending. No matter what your age of stage of retirement, reviewing needs and wants can help you avoid problems later. Cover your needs and adjust spending on wants as necessary.”
- Consider Using a Bucket Strategy
“Everyone has different comfort levels and risk tolerance, but it can make sense to protect at least some of your assets from immediate dangers related to economic stresses, while still leaving a portion of your portfolio in stocks to benefit from a potential recovery.”
- Review Your Plan Annually
“You never know when life will throw you a curveball. You need to make sure your plan still makes sense for you.”
Not for Everyone
Several articles and blogs tell you how to be part of the FIRE movement. You’ll also find stories of those who tried it and realized it wasn’t for them. If financial independence and retiring early are your goals, make sure you’re following that path for the right reasons.
This article on Business Insider details one woman’s eye-opening experience. She says, “During my FIRE years, I delayed experiences and said no to opportunities that I can’t get back. I was so busy obsessing over my dreams that I missed making actual memories. I wasn’t living my life.
“I still save a lot of my income. My biggest goal is still to achieve financial independence. But I’m in less of a hurry to get there.”
FIRE Concepts for Everyone
Maybe you can’t or don’t want to save 70% of your income. Another article on Business Insider gives five concepts anyone can use.
- Live on less: Live on a reasonable budget. Make prudent purchasing decisions to help you save more and retire early.
- Increase your savings: Say you save 10% of your income today. Your next goal is 30%, but you only save 22%. That’s still a lot more than the average person saves! Every additional dollar you save and invest gets you closer to financial independence.
- Know your numbers: “FIRE-minded individuals and households can’t just spend willy-nilly and hope their retirement works out as planned. They tend to follow a budget and closely track their financial progress.”
- Don’t risk your retirement: No investment is risk-free. FIRE investors know their money must last a long time.
- Invest for the long-term: It might be fun to try to make a lot of money day trading, but it’s not right for your money. “Instead of tinkering and trying to make money in the short-term, focus on long-term investment goals and avoid risk.”
Personal Retirement Planning
With several ways to implement your own version of FIRE, your personal retirement planning should include the smartest way to invest in your future. At iFlip, that means achieving your goals, mitigating your risk and growing your wealth.
Investing long-term with iFlip’s A.I. SmartFolios lets you preserve, protect and grow your wealth. The best algorithmic trading software is built into iFlip’s SmartFolios. This automated trading software constantly analyzes your positions and makes trades for you.
If you’re going to play with FIRE, make it less risky. Jump over to iFlip. Learn more about A.I. SmartFolios for desktop and mobile stock trading. See how easy it is to create an account.