23. What is FIRE (Financial Independence, Retire Early), & how do I calculate it?
Sep 4, 2023
Explore the FIRE movement - strategies like Lean FIRE, Fat FIRE, barista fire, and geo fire discussed. Learn how to calculate your FIRE number and plan for early retirement. Discover the principles of frugal living, income growth, and investments for financial independence.
19:45
forum Ask episode
web_stories AI Snips
view_agenda Chapters
auto_awesome Transcript
info_circle Episode notes
insights INSIGHT
What FIRE Really Means
FIRE means building enough passive income through investing to cover living expenses so work becomes optional.
It focuses on frugality, income growth, and long-term investing, often via ETFs and shares.
insights INSIGHT
Origin Of The 4% Rule
The Trinity Study established a 'safe withdrawal rate' for retirement portfolios using historical data.
Its commonly cited 4% rule comes from testing withdrawal rates for 30-year retirements with typical allocations.
volunteer_activism ADVICE
Use The 25x Rule To Find Your Target
Calculate your FIRE number by multiplying your annual expenses by 25 to use the 4% rule.
Adjust the multiplier if you want a more conservative buffer (e.g., 30x) to protect against longevity or market risk.
Get the Snipd Podcast app to discover more snips from this episode
“Financial Independence, Retire Early”. It’s one of those terms that sounds too good to be true, like “guaranteed return on investment” or “zero calorie donuts”. Add the fact that it forms a soundbite-worthy acronym – “FIRE” – and you’d be forgiven for smelling a Ponzi scheme.
Give it a closer look, though, and you’ll find a money mindset that embodies the Get Rich Slow Club ethos. In fact, FIRE has inspired a community of long-term investors, savers, and budgeters across Australia. And best of all, FIRE doesn’t discriminate; all it asks of you is patience and consistency.
In this Get Rich Slow Club episode, Natasha Etschmann (Tash Invests) and Ana Kresina (Head of Product & Community at Pearler) discuss this long-term strategy in all its glacial glory. They also help you calculate your own FIRE number, so you can work towards the right early retirement for you. Give this episode a listen, and it will give you a solid structure to plan your own FIRE!
Disclaimer Any advice is general and does not consider your financial situation needs, or objectives, so consider whether it’s appropriate for you. You should also consider seeking professional advice before making any financial decision.
Natasha Etschmann is an Authorised Representative 1299881 of Guideway Financial Services Pty Ltd AFSL 420367. Read the FSG available from https://tashinvests.com/links
If you are considering any of the products we spoke about during the show, be sure to read the Product Disclosure Statement & Target Market Determination available from the product issuer’s website before deciding.
Get Rich Slow Club