When you’re starting out in the workforce and building your career, retirement can seem like a long way away.
And with the age at which you can access your super and age pension creeping up—not to mention the increasing cost of living—you might be steeling yourself for a longer working life.
The stats don’t lie—Australians are staying in the workforce for longer and any thoughts of retiring early are becoming a distant dream for many of us.i
But there’s a growing movement of younger Australians who believe that by following the right set of rules, it’s possible to achieve early retirement.
Popularised by US-based blogger Peter Adeney, better known as Mr Money Mustache, the Financial Independence, Retire Early movement looks more closely at what makes us happy.ii
FIRE is all about following an extremely frugal lifestyle with the aim of retiring as early as your 40s…or even your 30s!
At the core of the FIRE philosophy is changing your attitude towards spending and saving.
But FIRE is more than just following a budget. It’s a whole-of-life movement that inspires fervent belief in its followers.
The FIRE movement encourages its followers to build up seven levels of financial safety by:
Like any movement, FIRE inspires some committed followers and some of the lifestyle advice can seem a little extreme—churning credit cards to access freebies, living in a truck to avoid rent and even sifting through bins outside restaurants for free food.
Now, if the thought of going without your daily latte…not to mention movie outings, fine dining and regular holidays…sounds like a living nightmare, then perhaps FIRE isn’t for you.
But if this sounds too much like hard work, don’t worry. You don’t have to be quite so committed. You could consider making some simple changes to your daily habits to reduce your spending and boost your savings.
Once you’ve ramped up your savings, you could think about being a little more savvy with your money.
You may not retire quite as early as the more committed FIRE followers. But you may just put yourself in the box seat to retire on your own terms.
And along the way, you might find yourself reappraising your attitude towards money and happiness.
Need help starting your FIRE?
For more help and to take a fresh look at the way your managing your money, speak to your financial adviser at SFP, or contact us on 02 9328 0876.
Article by AMP Life Limited
General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.