Are there steps to follow for FIRE or?

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1) work for money
2) make the money work for you

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First you reach FI. Then you RE. Don’t do that backwards.

likefunny

Very basic, but if you follow these steps - you should get there sooner or later ;-)

1. Define your FIRE target:
This can be in terms of NW or income generated per year. Basically the idea is to consider what your ideal FIRE lifestyle would be, figure out how much it costs and then ensure that the FIRE income you have is sufficient to cover that plus buffers included for downturns, family emergencies, medical emergencies, future house/car purchases, kids, etc. Remember to account for inflation as well. And ensure you have multiple streams of income so if one income stream fails, you have others as backup.

2. Earn more than what you spend:
Maximise earnings if possible, if you can widen the gap between your income and expenditure thus makes saving and investing a lot easier and less painful than trying to tighten your belt till it hurts

3. Save a significant portion of what you earn:
Save at least 20% of take home pay or higher if you want to retire earlier. For those targeting to retire in their 30-40s, you’d likely need to save much more (eg 50-60% of take home pay)

4. Invest your savings so that they generate passive income (either in the form of dividends that you can live off of without touching principal, or capital gains which your realise when you sell an asset that has appreciated over time)

5. Repeat steps 2-4 until you get to your FIRE target.

likehelpful

I’m sad there aren’t real helpful answers here

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A. My investment/401K/IRAs reach $3M (or 5M or a number);
B. My investment can generate income (dividends/interest) that equals to 75% (or some %) of my current salary;
C. My mortgage paid off or/and kids college paid off;
D. When I reach 62.5 yr old (or certain age);
E. Some other consideration (please specify)

One of the above, or some combinations of above - please specify.

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likeuplifting
likehelpful

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