Quit Fulltime Work Decades Early

Today let's review a way to quit the 9-5 decades early.

Leaving fulltime work early offers many benefits like:

• More family time.

• More sleeping in.

• Less stress.

Unfortunately, working fulltime 40 years is the only option society presents.

Schools Don't Teach Money

Most high schools and colleges don’t teach:

• How to build wealth.

• How to manage money.

• How to create a freer life.

Working 40 years followed by a short retirement is the expected path.

Fortunately, there’s a growing community of people that prefer freedom sooner.

It's called the FIRE community.

It stands for:

Financial

Independence

Retire

Early

I first discovered FIRE while working in banking.

It allowed me to quit fulltime work in 2020.

FIRE is a lifestyle choice many people are opting into—

Especially Millennials.

Here’s how it works:

Understanding FIRE

FIRE is often described as:

“a lifestyle that prioritizes savings so you can quit full time work early”

There's a few different versions of FIRE.

I like to think of it as—

FIRE Version 1:

Quit working & officially retire.

FIRE Version 2:

Quit working fulltime and work parttime.

Version 2 is often called F.I.

Financial

Independence

You leave off the RE part of FIRE.

People picking it often want to spend more time with family— and do something they love.

It's not about retiring early.

It's about taking control of your time.

• No more conference calls.

• No more work meetings.

• No more 5am alarm.

Making Sense of FIRE

There are 5 main steps to FIRE.

Step 1: Increase your income.

Step 2: Pay off your debts.

Step 3: Save and invest.

Step 4: Hit your FIRE number.

Step 5: Quit fulltime work.

The journey looks slightly different for each person.

Here's an Example

Dave reads about FIRE.

He likes the 2nd version (F.I.)

He wants to quit his job and spend more time with family.

He's also passionate about fixing up cars. He wants to buy old cars, fix them, and sell them for a profit.

It would be his dream job.

Unfortunately, he doesn't know if he'd make enough money doing it.

After discovering FIRE, Dave believes spending more time with family and cars can become his new reality.

Dave’s FIRE Plan

This is the plan Dave put together.

1. Increase his pay from $60k to $80k per year by getting a promotion.

2. Budget and cut back his housing, transportation, and food expenses.

3. Payoff his debt with the extra money he now has: a $10k credit card and $18k car loan.

These changes give him a lot more money at the end of each month.

After his debts are paid off—

He plans to save and invest each month.

His goal is to save 30% of his total pay each year.

He figures he'll have $225k after 7 years.

This assumes he makes 8% per year on his invested money.

He decides $225k is his F.I. number. Some people call this F.U. money.

His monthly expenses are $4k since he has no debt except his housing payment.

With $225k saved and $4k in monthly expenses—

He has enough to get by for 4.5+ years ($225k saved / $4k monthly expenses = 4.5 years).

But, spending all that money on living expenses isn't his plan.

He wants to work parttime for himself doing what he loves—fixing and reselling old cars.

His goal is to make enough fixing up cars that he doesn’t touch the $225k.

He wants it to keep growing.

If 1-2 years pass and he's unable to make the money he expects— he figures going back to a regular job will be his back up plan.

There are several online FIRE communities. Dave follows a few of them to stay motivated.

Mr. Money Mustache is one that's been around a long time.

Picking a Strategy

If you find the FIRE movement interesting, picking your own strategy is the next step.

As a reminder—

FIRE Version 1:

Quit working and never work again.

People going this route usually save 25 times their annual expenses.

In Dave's case, it would take him around 20 years.

That's a long time.

But if Dave was 27, he'd quit fulltime work in his 40s.

He could always double down and save more money.

That may allow him to quit in—15yrs, 12yrs, or 10yrs possibly.

But Dave was more interested in the other version of FIRE—

FIRE Version 2: 

Quit working full time and go parttime.

Dave wasn't interested in retiring early. 

He just wanted more control of his time.

Conclusion

You may be reading this thinking—

Save money?

Yeah right...

I get it.

When I first came across FIRE 10+ years ago, I was in a similar place.

Think of FIRE as a roadmap. It's a plan you work on for several years.

For many people, it's a motivating concept that gets them moving in the right direction with their money.

The idea is to get to a better place over time.

A place where fulltime work eventually becomes optional.

A place where you can do more of what you want in life...and less of what you don't want.

A tough but worthwhile journey.

That's all for today.

See you next week.