Why are you doing it?
Anything in life that is not part of the natural world, you must consciously critical about it. Life has been on this planet for over 4 billion years. It has been established that all life must move toward a target – regardless of the tendency of choice.
The very moment you chose not to participate in one particular activity, unless you are preparing to die as the next plan, a replacement in endeavor must matches up with your gift in potential at that particular moment.
For ease of understanding, we will use an example from the sport world.
Let’s say you were a baseball star in high school. Earned a full ride scholarship to college and turned professional after 4 years.
After 13 years played in the MLB, you came to the conclusion that you were not as competitive as other players in the sport regardless of reasons – slowly and surely you lost the passion for the game.
You came across an awesome financial website with a meticulously article that read “An Early Retirement Master Plan: FIRE By 45”. You adopted the writing in its entirety as your financial plan for execution.
You were able to take the training and discipline from the years of playing the sport and applied to the game of Finance – slowly and surely the passion you lost in the game of baseball, incrementally you gained it in the game of Finance.
With a wife and 2 children and after 10 years of full throttle, you scaled the Financial Independence summit – “Hooray!” you popped a bottle of champagne to share with your mate and hugged both of your children, thanking them for giving you the strength and the inspiration along the journey.
As you lift your head to sip the celebratory champagne, you noticed another family celebrated their financial journey in the same way but different – 5 million dollars difference.
Certainly, you felt less victorious. The feeling was a déjà vu!
An exact moment 10 years ago, you decided to shift your investment of time and effort from baseball to FIRE – since you could not imagine yourself to be inducted into the Baseball Hall of Fame at the end of your career because of the many great players.
This is where the fallacy of FIRE manifested itself. You got to your destination “Retire Early”. But the nature of living is clear – you must move forward to FIRE #2, FIRE #3 and FIRE #4.
If you devoted a fair amount of time inward to investigate the “Why you are doing it…”, you will discover that Financial Independence and to be the best of who you are actually two different things.
Just because you have successfully crossed an arbitrary Financial Independence number, the same path forward may or may not in line with the natural gift within you.
What is your next move?
Do volunteer work!
Go back to baseball!
Change the original Financial Target to add on an additional 5 millions!
With a full understanding at the beginning of the “Financial Independence” journey, why you are doing it, and less emphasis on the “Retire Early”, all next moves will naturally match up with your potential at that particular moment.
What is your FI target?
The Financial Independence math is shamefully simple. It has been worked out by many generations of entrepreneurs in the past and field tested by the countless generations of retirees.
I mentioned this fact throughout my writings – thus, it is repeated here for convenient.
In 1994 William Bengen, a financial advisor, articulated the 4% withdrawal rate as a rule of thumb. Two years prior, Vicki Robin and Joe Dominquez published the 1992 best-selling book “Your Money or Your Life”.
These two events served as the foundation of the FIRE movement for the last 25 years.
I am going give you the Financial Target for all incomes levels. But, I will not repeat the math proofs in the books and the related studies.
As I said, the math is extremely and shamefully simple.
Regard of your incomes, if you want to scale your own personal Financial Independence summit in –
- 10 years – Save and invest 60% of your after tax income
- 15 years – Save and invest 50% of your after tax income
- 20 years – Save in invest 40% of your after tax income
- 35 years – Save and invest 15% of your after tax income
In the beginning of the article, I asked you to invest time in self-reflection and know yourself a little better.
Let’s say you are a 25 years old and have no clue what to do with your life – take the 35 years path and figure things out along the way.
In another 10 years or so, with a better understanding of the reality at the age of 35, take the 20 years path and continue to figure things out along the way.
In another 10 years or so, with a greater perspective of the world at large at the age of 45, take the 15 years path and continue to figure things out along the way.
In another 10 years or so, wiser at the age of 55, take the 10 years path and continue to figure things out along the way.
This tier-up approach will give you the most sensible strategy for doing FIRE – life is a journey not a destination.
If you take the 35 years path all the way the pictures below illustrated the expenditures Vs savings and the future value of the investment in 35 years for incomes from 20K to 200K.
Where is the money?
Sam at Financial Samurai is a good source for the education (2019 top pick by TheEngineer). Sam has the financial experience to carry 90% of the population. But, what made him one grade above other bloggers is his humility – simply put, he is opened to all stupidities.
Millennial Revolution is a good source for the education.
White Coat Investor is a good source for the education.
The entire FIRE community is a good source for the education, if and only if you have established your Financial Target on your own prior to the financial education.
What is your daily Body & Mind ritual?
Life is a journey – you must prepare for the sound of body and mind. Every 10 years, you are a completely different person in body and mind.
If you fall behind of your personal endeavor, you must condition your physical and nurture your mind to stay on path.
I wrote an article about “Body & Mind” awhile back, read it and if it does not make sense then I will keep it simple with the following steps –
- You must sleep 7 to 9 hours a day
- When you first get up, drink a glassful of water and stay hydrated throughout the day
- Be physical active 5 days a week
- Prepare foods with raw ingredients
- Social with another person 1 hour every day
- Invest 1 hour in quietness and without distraction in solitary
It is that simple!
Let’s play the game of life!
