8 Tips To Help You Be On F.I.R.E
In case you haven't heard of the F.I.R.E movement 🔥🔥🔥, it is spreading like wildfire worldwide right now. For the uninitiated, F.I.R.E stands for Financial Independence, Retire Early.
Many have dreamt of retiring early and enjoying the rest of their lives sipping a cocktail on the Bahamas. But dreaming alone isn't going to make it happen - you need to TAKE ACTION! It's hard, but life will be so sweet once you get there.
Here are 8 tips to help you get fired up (pun intended 😆).
#1 - Start saving aggressively
I have seen F.I.R.E. advocates saving between 30% to 60% of their income. The more you save, the more you can invest and grow your wealth!
#2 - Cut unnecessary spending
Live like a minimalist (check out The Minimalists). Practise delayed gratification - do you really need that Apple Watch now? A dollar that you don't spend is an extra dollar that can be invested to make more money.
#3 - Have multiple sources of income
Don't depend solely on your salary. As the COVID-19 outbreak has shown so clearly, no job is secure. Start building multiple streams of income - rental, dividends, side business, capital gains, freelance work, etc.
#4 - Avoid / minimise consumer debt
These are 'bad' debts that are use to buy things that end up with no intrinsic value, such as car, credit cards, renovation, hire purchase, etc. Property debt is excluded from this category.
#5 - Have a solid retirement plan
When do you want to stop working and start living? How much do you need? Where is your income going to come from? If you fail to plan, then you are planning to fail. Have your plan written down, and start as early as you can.
#6 - Invest for passive income
To retire, you don't need more assets. You need more income. Focus on building up an asset pool that is capable of generating a consistent stream of income. For example, $1m invested in a dividend-producing asset at 4% yield, is $40K income per year - enough to cover most basic needs.
#7 - Have clear goals and milestones
Most people have no idea what they want to achieve financially, and if you can't measure what you want, you can't work towards it. Have a S.M.A.R.T goal, and break it up into milestones. Want $2m by 60? It would be a good idea to work backwards and aim for $1m by 50 and $500,000 by 40. Goals and milestones keep you on track.
#8 - Work with a good financial advisor
I meet and consult countless people from all walks of life, from cash-strapped fresh graduates to multi-millionaires. There's something to learn from each client. By working with a good financial advisor, you have an accountability partner to keep you on track for your goals, and tap on our experience and knowledge to adopt best practices and avoid the pitfalls.
See you on that beach in the Bahamas! 🌴
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