Take The Money And Run

Retiring 20 years early and not having to worry about cash flow? What was once a pipe dream is becoming reality for one BAZAAR reader

- Hannah James

FIRE stands for Financial Independence, Retire Early. The method, however, is much less glamorous than the goal: you save aggressively for years and make smart investments so you can eventually live off the passive income. The movement was popularised in the US by software engineer Peter Adeney, known online as Mr. Money Mustache, whose creed of saving the majority of his income saw him retire in 2005 at the age of 30. Since then, blogs and discussion forums about FIRE have proliferated online and it is taking the Australian media by storm. At its extreme, FIRE might not appeal to many, but I believe you can still live a beautiful life while saving for the future.

My husband and I started investing in our mid-twenties (I’m 35 now) because we wanted to retire 10 years early, at 55. Honestly, we’d always been lackadaisical with our investments, happy for them just to tick along. But when I started reading about FIRE, I realized most people following the lifestyle were retiring even younger. I became more conscious of my investments and realized if I pushed a bit harder, I could get there too.

In practical terms, we’re aiming to retire with about $2.5 million in assets, returning at least five percent yield per year. We’re more than halfway there — as of February 2019, our net worth is $1.5 million, excluding the family home. After tax, we jointly earn about $213,000. We also have four investment properties, and right now we’re saving about 19 percent of our income, although I’d like to increase that to 30 percent. We should be able to retire in 10 years.