Irish Financial Independence & Personal Finance Podcast

Tailoring your FIRE journey to your lifestyle

Saturday 19th October 2019

There’s no denying that the FIRE movement is gaining popularity around the world, but it’s important to keep in mind that what works in one country, may not work for them all.

Here are a few tips to apply your FIRE journey in Ireland to your lifestyle.

Ease into FIRE by tracking your expenses

The easiest place to start is to track your expenses. Your first steps in FIRE shouldn’t be about investing – the first step is getting on top of your expenses and clearing high interest debt.

There are plenty of budgeting apps out there, or you could take the traditional route and record and categorise every single transaction in a spreadsheet. Allocate a budget each month into various categories such as housing, food, transport, household bills, entertainment, dining, hobbies, and manage your expenses on a daily basis.

After doing this for a couple of months, take a look at your spending and identify a few areas where you can cut down on unnecessary expenses that aren’t bringing you additional happiness. While it’s important to allocate a small monthly budget for little treats such as a coffee or ice cream, a movie date or a nice bottle of wine occasionally, these luxuries can add up quickly and are a good place for you to start attacking your unnecessary expenses.

Figure out what FIRE means to you

The FIRE movement means different things to different people. Traditionally, it was based on the principle of working out your annual expenses and multiplying them by 25 – that was your investment pot.

This is all well and good if you live in an area where you can dramatically reduce your expenses, or live in a country where the tax system makes it possible to build an investment pot that big easily, but it’s not that easy in Ireland.

But one of the beauties of FIRE is that you can set your own goals. For many, being financially independent just means not needing to work a regular job. It could be about building a ‘side hustle’ and living off that as a way to achieve financial freedom.

For others, financial independence is more about time freedom. The freedom to work your own hours, on your own terms, when you want. Breaking out of the 9-5 slog, spending more time with your family, working hours that suit your lifestyle, being able to do the school drop-off and pick up, coaching your kid’s sports team, or purising meaningful hobbies of your own are common goals.

And for many in the FIRE community, retirement doesn't mean doing nothing – it means working on your own projects, at your own pace and not answering to anyone else.

Figure out what FIRE means to you, and your next steps will be that much easier.

Approach FIRE as a journey, not a destination

The FIRE movement is a journey. Very few of us get a proper financial education in our school years and find ourselves coming out of college buried in debt. This forces us to take a job to pay the bills. Immediately we find ourselves in the work / spend cycle (also known as the rat race). FIRE is all about breaking this cycle and finding a new way to generate money.

For 95% of people following FIRE, the net result is that they will become financially educated, save more money and reduce their expenses and debt. This can only be a good thing. For many, financial independence is about that "ah ha!" moment – that moment when you realise that there is another path from the traditional approach of ‘go to school, get good grades, get a good job’, that we have been programmed to follow since a young age.

How achievable financial independence is, really comes down to the individual – your potential to earn income, where you live, the house you live in and your partner and friends. There are so many variables, but the core principle remains the same – reduce your expenses and debt, start saving money and keep saving until you have enough passive income to cover your expenses.

Financial independence is a bit like trying to reach a pot of gold at the end of the rainbow – there is no magic number. Take it year by year. Evaluate your progress and set new goals each year so you can see how far you’ve come, and work towards where you want to go.

Connect with like-minded people

In much the same way as new parents go to coffee groups, or runners go on group runs together, you’ll be more successful in your FIRE journey if you connect with a group of like-minded people.

Money can be a taboo topic in many social circles, so if you want to network with some FIRE-friendly locals, check out the MeetUp groups in Dublin, Limerick and Cork.

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