If you are a Treasury pals who does not want to work until the age of 55, you should be familiar with the concept of FIRE Movement. A movement for people who have the goal of achieving financial independence and early retirement. But, how to make it happen? Let’s look at FIRE financial strategies that can help you achieve early retirement.
What is Fire Movement
The FIRE Movement is a movement that encourages people to achieve financial independence as quickly as possible, so they can retire early. This concept is popular among gen Z and millennials who want to escape conventional work patterns and enjoy life without being tied down to a full-time job.
FIRE itself stands for Financial Independence, Retire Early which means financial independence and early retirement. This concept first appeared in 1992 in the book Your Money or Your Life written by Vicki Robin and Joe Dominguez.
This concept teaches us to cut daily expenses and emphasizes saving or investing 50% of your monthly income. You are also required to accumulate assets until you are able to cover your daily living expenses.
FIRE Movement Category
Treasury pals know that there are levels of FIRE. This category is based on a group of people who are very strict in applying the FIRE Movement to the most lax in applying the FIRE Movement. The levels include:
1. Lean FIRE
Lean FIRE is when a person achieves financial freedom with a minimalist lifestyle by limiting unnecessary expenses. Lean FIRE tends to divert their income to save and invest their money.
Friends who follow Lean FIRE usually reduce living expenses to a minimum and only spend money on essential needs in order to retire early. Friends who apply Lean FIRE usually have a very minimalist lifestyle or frugal living.
2. Fat FIRE
If Lean FIRE saves money as tightly as possible then Fat FIRE is the opposite. Fat FIRE is the stage where someone who wants to retire early but still maintain a comfortable lifestyle. Enjoying certain luxuries such as traveling, eating at restaurants, or living in a big city without worrying about their finances being compromised.
This Fat FIRE category usually has a high income or has a lot of assets so that it can cover the costs of their lifestyle. Fat FIRE shows that it turns out that for early retirement we can still live luxuriously as long as our income is able to be used in the long term.
3. Barista FIRE
The most popular tier is Barista FIRE, where one achieves partial financial freedom, but still chooses to work part-time or freelance to cover some living expenses.
Working part-time allows you to enjoy time flexibility, not relying too much on a full-time job, but still earning extra income while relying on the investments you have accumulated.
Strategies to Achieve FIRE Movement
1. Determine the desired FIRE
From the three levels above, which one would you choose? Do you want to live a minimalist life with Lean FIRE, enjoy financial freedom with a comfortable lifestyle through Fat FIRE, or keep working part-time with Barista FIRE. Determining this goal is important so that you can design the appropriate strategy.
2. Increase Savings
Next, you should start increasing your savings and cutting expenses. Ideally, FIRE adherents save about 50-70% of their income by cutting unnecessary expenses.
These spending cuts include eating out less, using more efficient transportation, and avoiding consumptive debt. If you manage to save and cut expenses then this is a good step in achieving FIRE.
3. Increase Income
In order to reach FIRE faster. Don’t just rely on one source of income, but try to find side jobs such as freelance, small business, or passive income from investments.
For example, if you have writing or design skills, you can become a freelancer. Monetizing hobbies such as creating content on YouTube or selling digital products can also be a significant additional income.
4. Invest
The key to the FIRE Movement is smart investment. Don’t just save in a regular account because the value will be eroded by inflation. Instead, allocate funds to various investment instruments to reduce risk. Don’t forget to choose investments that are safe and profitable in the long run.
By starting to invest from now on, you can build assets that will sustain your life in the future. One of the most popular, safe and easy investment instruments is investing in digital gold. Gold has a stable value and can protect wealth from inflation.
By choosing the right and safe investments, individuals can be better prepared for the impact of a recession, preserve the value of their assets, and still have a source of income despite economic uncertainty.
So, from the explanation above, are you interested in starting this FIRE Movement? Choosing to retire early and live independent of salary requires careful and long preparation. For this reason, you need to start early so that you have enough time to prepare.
If you want to invest in digital gold through a safe, practical and reliable platform, you can try Treasury. Treasury is the first digital gold investment application that has an official BAPPEBTI license so that its security is guaranteed.
In addition, you can also buy digital gold starting from a small nominal and manage it easily directly from your smartphone. What are you waiting for? Start your FIRE Movement from now with Treasury!
