This blog is 3/4 of our FIRE- financial independence, retire early mini-series brought to you by Kate Cambell, founder of How to Money (HTM).
The FIRE movement is often criticized in the media by sceptics and financial professionals alike. Often the reasons they put forward aren’t coming from a place of reason or experience, and aim to tear the movement down with shock statements. For this exact reason, I want to dive into some of the key myths around reaching financial independence and retiring early.
FIRE is just about quitting your job and watching Netflix all day.
When I talk to people about wanting to achieve FIRE, a lot a people say “retire and do what?” In my mind it’s retire and do anything! Everyone’s working towards FIRE for different reasons, whether that be freeing time up to spend with family, start a business, volunteer or travel, generally those who are motivated and dedicated enough to achieve FIRE are not going to be lazing around all day once they quit the rat race!
Frugality and deprivation is the only way to achieve FIRE.
Absolutely not! There are so many paths to FIRE and if you start looking online there are many people sharing their journeys with the world. Achieving FIRE is not something restricted to the wealthy or the frugal, and it’s a goal that people from all walks of life have achieved. It does require a plan and hard work, it does require sacrifice and it may take you much longer to achieve than the person next door. The good thing is that whatever the outcome, the earlier you start saving and investing your income the better you’ll be down the track, regardless of whether you reach your FI number in 10 or 30 years!
You’ll have no identity without work.
Think about all the components of your job that your enjoy outside of the steady paycheck – is it people you work with, the chance to get out of the house, the challenges you face and the problems you get to solve, the networking opportunities or the feeling of control? These are all areas of your life you can fulfill without a job (unless you stay on the couch watching Netflix all day)! Having the freedom to pursue your interests and develop new skills should be something that empowers you, and enables you to find happiness and fulfilment outside the workplace.
You need to know a lot about finance to achieve financial independence.
Funnily enough we aren’t born with an innate knowledge of the global financial system, and unfortunately personal finance isn’t a topic commonly covered in school. Luckily for us these days the internet provides, and everything from budgeting to buying shares can be learnt online. It will take some trial and error to work out the systems and products that suit you, but don’t let your lack of a PhD in Economics stop you from starting your financial education journey today (as it’s definitely not necessary)!
It can be scary and overwhelming to get started, so I’ve included some of my favourite financial resources to start with below.
- Investopedia (aka Wikipedia for Finance)
- MoneySmart (great independent resource for Aussies)
- ChooseFI (US Focused FIRE Podcast)
- The Happy Saver (great NZ money blog)
- Big list of UK based personal finance websites
In part 4 of our FIRE miniseries, we’ll be looking at how you can go about planning your own journey towards FIRE!
Kate is the Founder of How To Money (HTM). Kate created HTM to help young Australians start talking about personal finance, and share the resources she finds along her financial education journey. Kate started her own journey a few years back and now works in the finance industry, while completing her undergraduate degree.