FIRE (financial independence, early retirement) is a growing trend worldwide. The majority of people who join this movement actively save most of their income for retirement in their 20s to 30s or just focus on activities or projects they are enthusiastic about in their 30s and 40s.
If you’re into FIRE, you’ve heard of Grant Sabatier, author of “Financial Freedom” and founder of the websites Millennial Money and BankBonus.com. This self-made billionaire is one of FIRE’s notable success stories, having earned over a million dollars in only five years by diversifying his income and conserving more than 80% of his earnings.
On the other hand, Sabatier believes that his tale should not be used as a guide for others to follow. “Watching a YouTube video or an internet article about someone’s road to financial independence, early retirement, and following through is one of the most common blunders individuals do.” That is not the case for me. “Nice idea,” he remarked.
Here are four questions Sabatier recommends you ask yourself before seeking financial independence as a goal.
1. How would money help me achieve my goals?
Sabatier suggests considering money as a form of power – a power that gives you the time and flexibility to widen your activities and feel more alive. If you are starting with little money, he advises against setting a large dollar figure for yourself to retire.
“It’s distracting whether you’re striving for $5 million or $10 million. Get to $5,000 if you have nothing. Get to $50,000 if you have $10,000. Set the next barrier to aim for and do all your power to reach it as soon as possible.”
2. What am I prepared to give up?
Any FIRE advocate will tell you that the path to massive savings is to limit your expenditure. “Never save money when you spend it,” Sabatier advises. “You’re making a concession. You are surrendering a chunk of future freedom.”
According to Sabatier, the difficulty many individuals face is that they trade present happiness for future prosperity by denying themselves the things that offer them joy.
“The simplest approach to strike that balance is to write a list of the things in life that make you the happiest and calculate how much those things cost,” he explains. “Pay attention to those things and save on everything else.”
3. How should I invest?
According to Sabatier, real estate ownership is one of the most common methods to achieve financial independence today. “The bulk of young investors who attain financial independence do it through real estate.” That’s what I overlooked along my financial path. I’m sure I could have done it. “Investing in real estate will help you reach your goals faster,” Sabatier explained.
4. How can I improve my skills?
Sabatier believes that learning new talents and trying out other occupations can help you discover a job that is both appealing and pays well. “Skill is a tremendous asset to everyone.” The more abilities you have, the more options you have to generate more money. Things like developing a website, running Google advertisements, designing graphics, videos, and so on can be learned for free online. “The earlier you sharpen and master new talents, the easier it is to reach your goals,” the billionaire explained.