Retire before 50 and live your best life. That is the message of the FIRE (Financial Independence, Retire Early) movement, which is drawing interest worldwide.
Adherents of the FIRE movement contend that many young adults can pursue financial freedom and retire in their 40s (or 30s) through sufficient commitment, investment, and resourcefulness. Detractors think this idea is not only radical, but also radically unrealistic for many.
Is it really possible to retire so young? Actually, yes – there are people who have done it, and their stories often appear on financial websites. These early retirees tend to have some things in common.
They spent far less than their peers did, and that gave them extra cash, which they could use to pay down their debts and invest.
They invest enthusiastically, with a focus on building their net worth. They started the effort early in life and kept at it.
They retired with purpose. They were motivated to do something extraordinary with their lives; they had a dream to realize, a calling to answer, and a reason why they did what they did.
Those who dream of retiring before age 50 might want to emulate these behaviors.
Of course, some people have more of a head start on realizing the FIRE dream than others. Read enough FIRE stories, and you will probably notice three other common characteristics about these unconventional retirees.
They sold a company or had a career in a “hot” industry. Early entrepreneurial success or “right place, right time” often applies.
They are single and/or child-free individuals. Raising children implies greater household spending for many years to come.
They are in good health. Most people get their health insurance through employer-sponsored plans. Early retirees face the prospect of paying for their own coverage. Anyone with a chronic (or for that matter, suddenly serious) medical condition could face a financial strain in a FIRE scenario; those who lack health coverage need to be prepared to pay for their own medical expenses.
Do you have dreams or life goals that you want to realize within 10 or 20 years, including retiring from your business or employer? Now is the best time to financially strategize for those ambitions. Whether you retire before or after age 50, an early start on your strategy might be instrumental in the pursuit of your objectives.
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