Retirement
How to live a ‘kick-arse’ lifestyle and retire early
Financial independence retire early, or FIRE, has become an increasingly popular movement, with would-be retirees saving large percentages of their salaries and living off the returns.
How to live a ‘kick-arse’ lifestyle and retire early
Financial independence retire early, or FIRE, has become an increasingly popular movement, with would-be retirees saving large percentages of their salaries and living off the returns.

In conversation with nestegg, “Aussie Firebug”, who has chosen to remain anonymous, explained why investors don’t need to be a multimillionaire to walk away from the workforce 30-plus years before reaching the traditional australian retirement age.
“You don’t need $10 million to retire early. It’s realistic for people in a first world country, where we have social security nets around us, to be able to cut down the expenses, so they don’t actually need a ridiculously big portfolio,” Mr Aussie Firebug said.
The math is simple. A person needs to save and invest 25 times their annual expenses in order to become financially independent, assuming they plan to withdraw 4 per cent of their retirement funds thereafter, Mr Aussie Firebug explained.
“Traditional financial advice is on the conservative side of things. While it isn’t a bad thing at the heart of the FIRE movement, this lavish lifestyle that people are living is really unnecessary,” Mr Aussie Firebug said.

Explaining that “retirement savings are like a snowball” with money saved compounding and growing, Mr Aussie Firebug said a dollar saved has a “double whammy” effect on retirement.
“If you’re only spending a small amount a year, it reduces the size of the snowball needs to be at the end.”
Every dollar saved equates to $25 less a retiree will require, assuming the portfolio invested generates 4 per cent income.
While acknowledging a higher salary means it’s easier to save a large proportion of income, the Firebug argued that it’s more important to lower expenses than have a higher salary.
“Without a shadow of a doubt, it is more important to have lower expenses. That is the most important thing with the equation behind FIRE.”
Using the example of a person who is making $50,000 that saves $12,500 and another person who is on $100,000 who is saving $25,000, the two will retire at the same time despite one earning twice the salary of the other.
“If you increase your savings rate, you wipe so many years off your retirement,” Mr Aussie Firebug said.
He believes superannuation is a nice perk later in life, but it will not help younger Australians looking to retire early due to access restrictions.
“People who are quite young looking to FIRE usually do not add anything extra to superannuation, but people who are older definitely take advantage of the tax benefits that come with super,” Mr Aussie Firebug said.
Finally, the Aussie Firebug explained his number one tip for anyone looking to get into FIRE.
“If you want to create financial freedom later in life, try not to sacrifice too much in lifestyle at the start.
“Start tracking your expenses. Even if you don’t do anything else, just know where your money is going and review it once a month.
“You’ll find stuff that doesn’t make you happy or that you didn’t even know you were spending money on, so you’ll cut it out of your life.
“Once you start doing it and done it for a year, you’ll have your baseline and then you can go from there,” Mr Aussie Firebug concluded.
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