FIRE Mindset (Part 2)

In Part 1 What is Fire? - we defined FIRE and an endpoint.

However we didn't address what it takes to get there.

This FIRE Series Part 2 of course involves more FIRE maths, but first we must explore what this means for your mindset and lifestyle.

Mindset

Most people spend everything they earn and then some. They have a vague idea of the decades ahead which may be centred around “the government will care for me”, or fatalistic with “I will never retire anyway” and “this is out of my control“. Others are slightly more interested but limited to “I’m already contributing to a work pension“ and “the pension company illustration will advise when I’m ready“.

Those pursuing FIRE and indeed those owning their path to retire Retire On Time are different. They want control of their time and life, deciding themselves when to go part-time or retire - not when the state pension, the pension firm, or their employer says so!

These people plan ahead strategically, and are masters of delayed gratification.

So the question is, how much do you want to wrest this control, how willing are you to contribute to your future self? (they will thank you!)

Ok sorry more FIRE maths

Note these are basic examples - full forecasts are more complicated - for a personalised model check out our Retire Earlier coaching package

The key to achieving FIRE is your Savings Rate, meaning how much of your current gross income is invested.

Imagine the current UK default auto-enrolment savings rate of 8% (employer contributes 3% and you add 5%), this means you would need to work 56 years to reach FIRE, hardly early.

Say you increase this to 10%, now you can FIRE in 51.4 years. Remember those fatalists? They say so what, 51 years is still ridiculous, I may as well travel to The Bahamas now. But you understand, you just gained 4.6 years of freedom.

How about 12% savings rate? 47.5 years. 15%? That’s 42.8 years.

20%? now we are getting somewhere, 36.7 years means almost 20 years more freedom from a small adjustment.

Hmm interesting… 30% results in 28 years worked, 45% is only 19 years, and 60% means just a 12.4 year career.

Now you’re addicted, already wondering what savings rate you can achieve, measuring your spending on consumable items in life months and years.

You are FIRE.

Years worked to FIRE by savings rate

Lifestyle

This is where it gets personal.

You need to decide your values, how to prioritise spending, model out how these choices will impact your life and how far you are willing to go.

You will need help to spark the FIRE motivation and maintain this along the way.

Check out our Retire Earlier package to build a FIRE strategy and get coaching support through this.