The road to FIRE (Financial Independence Retire Early) is definitely not a quick journey, but it beats the rat race most people compete in to get to traditional retirement - not that they get there any quicker.
As you’re playing the long game, why not treat it as a literal game. Think of it like Monopoly and you’re the banker. You’ll make a few trips around the board, collecting dividends each time you pass GO, until that lucky day you land on Free Parking.
So how can you enjoy life as much as a game?
When we talk about keeping a long-term perspective, we’re essentially talking about your attitude towards the journey and not just the end result.
It’s all a matter of mindset and time.
While we have no control over the speed time flies past us, we do have control over how we spend it. Just like your savings will compound, there's an opportunity to start doing the same with your time.
As we slowly begin to build more space in our days, in essence, we're gradually getting into the mindset of being financially independent. So when the big day comes and your FI amount is in the bank you’ll already have the right lifestyle to match it.
So how do we build our balanced lifestyle while keeping our perspective over such a lengthy period?
This chapter will help you curate a balanced lifestyle that best suits your needs and values! Here are some ways to start planning and adjusting your life for the long term:
- Imagining the future
- Follow your happiness (and slow down)
- Investing time
- Building boundaries
- Learn along the way
- Tracking stats
- Celebrate the wins
- Ignore the punters
Imagining the Future
“Love the life you have while you create the life of your dreams.” Hal Elrod
What does it look like and what is life like when you’re financially independent? Start by asking yourself “What would I be doing if my FI number was in the bank today? How does that differ from my life now? Where can I bridge the gap and integrate those differences?”
Asking these questions helps to keep perspective of where you're going and builds anticipation for the day to come when you do reach FIRE. Over time your future self will become clearer as you test out your answers now in micro-form.
How do you know what your day will look like you ask? Start by researching what people do with their time post-FIRE. This might be through books, blogs or asking people in the FIRE community.
Follow Your Happiness (and Slow Down)
“The most important thing is to enjoy your life - to be happy - it’s all that matters.” Audrey Hepburn
Everyone wants to be happy. Just because you’re delaying gratification through investing, doesn’t mean you have to sacrifice your happiness for 10+ years as well! By focusing on what makes you happy now, this can give you huge insight as to what you may want to do more of, later in life post-FIRE.
A great way to start bringing more happiness into your life is to take note of what areas in your life currently bring you joy.
Is it spending time with family and friends, learning a new side-hustle or camping in the mountains for weeks at a time? Maybe it’s getting up an hour earlier to do yoga before everyone else wakes up, or planning a hike for the end of every month so you have something to look forward to. Perhaps you might like to call a friend after dinner, just to check in and say you’re thinking about them.
How can you implement more of these things into your life now?
It doesn’t matter how big or frequent the activity is, just taking the time to consider what currently makes you happy and then do more of it, can bring much more joy to your FIRE journey.
Slowing down an existing activity can be another way to enjoy a mundane task more. Instead of two-minute noodles, plan and cook yourself a three course meal with music and a glass of wine. Stop to smell the flowers or watch the birds on your walk, or sit at the cafe 15 minutes longer than usual simply to take in the atmosphere around you.
Make a list of up to 5 activities you'd love to make time for in your life. Plan to do one of these this week and see how it makes you feel.
Investing Time
“The key is in not spending your time, but in investing it.” Stephen Covey
A great way to keep balance while you wait for that magic number to build is to carve out time. This could be in the form of weekend getaways, mini-retirements, going part-time in your job or something as simple as an afternoon to yourself each month.
This allows you to get away from the hustle and bustle of your current work and home life, creating space to stop, think and reflect on where you are and where you’re going.
A lot of people on the road to FIRE use mini-retirements or going part-time as a way to test what FIRE’d life might look like. On those days (or months) off, they really test and analyse what works and to see what they want more of in life.
If that sounds a little extreme, smaller ways to bring space for thought into your life could be going for a local weekend away, a walk around the block or spending 15 minutes doing a meditation.
With the extra time, you could find yourself drawn to a new hobby or activity that brings you energy and joy. Or you might find you wish to travel full time or live abroad in a city with cheap living expenses (known as geo-arbitrage). The options are only limited to your imagination and desires.
These ways to invest time in yourself are fantastic for learning more about who you’ll be in the future, allowing you the opportunity to begin integrating and investing more time into you throughout your journey.
Can you organise a mini-retirement or afternoon off? What appeals to you the most? The best way to make it happen is to just do it! Book it in, and then plan what you’ll do later. Once you have the time off, take notes of what you find yourself drawn to with your newfound space.
Building Boundaries
“Boundary setting helps you prioritise your needs over other people’s wants.” Lauren Kenson
For those with busy schedules or friends who burn through their cash every weekend, boundaries might be just what you need. These are limits you create to help protect your time, money and keep you on track.
Personal boundaries are a good start, as they are rules you set for yourself. Start simple, such as leaving work at 5pm to spend more time with your family or placing a budget on your entertainment expenses to meet your monthly savings goal.
Then you can build up to bigger boundaries. If you're saving hard, you might set a boundary for friends in which you let them know you won't be spending money on fancy restaurants and you'd prefer to spend time with them over a drink at a wine lounge or a potluck picnic in the park.
Boundaries allow you to set clear expectations for yourself, your family, your friends and your work. As you're building wealth, your life will sometimes look very different from those still working the daily grind. Setting boundaries gives you the power to not be influenced by other people, helping to solidify the path you're on, while maintaining the respect of those around you.
One thing to note, your boundaries should empower you, and never feel like a sacrifice or burden. They are put in place to make your life better!
Do you have enough boundaries in your life? If you're feeling pressure from commitments or spending money, think about some limits you could put in place to make things easier for you and your journey ahead.
Learn Along the Way
"Knowledge is the compound interest of curiosity." James Clear
While some people are rearing to get to the RE (Retire Early) part of FIRE, others will be happy reaching FI (Financial Independence) and continuing to work for their love of learning or keeping themselves busy. It’s completely up to you.
The pursuit of knowledge can sometimes provide just as much value to your life as your share portfolio. This could be taking the time to watch DIY videos to learn how to do home renovations (that can save you thousands!) or you might like to build a veggie garden to supply half of your food. It could even be building up a blog about your passion that provides you with another passive income stream and knocks a few years off your required FIRE number!
Growing and building on your passions and knowledge now will entertain and keep you energised in the short term while helping you on the path to self-sufficiency in the long term.
What are 3 areas you could research that could prove invaluable in 10 years’ time?
Tracking Stats
“Tracking is a simple exercise. It works because it brings moment-to-moment awareness to the actions you take in the area of your life you want to improve.” Darren Hardy
There’s nothing better than watching your FIRE number grow. As your journey takes place over years, seeing and tracking your growth really gives you those bursts of motivation to keep going. While tracking every day is probably too frequent, updating at the end of every month or quarter can really shine light on your progress.
Tracking your investments not only shows how far you have to go but if you’re feeling stuck or down, can also remind you of just how far you’ve come. While we all want that perfect trajectory that points straight up, we know sometimes life gets in the way, and that’s okay. The beauty of tracking and planning is that it allows you to alter course as your life changes or expands. You might change jobs or have a child. While these events can often cause your growth to plateau, you’ll usually be back on course before you know it.
A good money tracker to get you started is in Vicki Robin’s book - Your Money or Your Life. This will set you up to monitor your income, spending and passive income change over time until you reach what is known as a Crossover Point - when your passive income is more than your spending.
If you don’t track your numbers yet, take the time to set this up over the weekend. Sometimes you’ll be amazed at what you find, and what your path to FIRE could look like. It might be shorter than you think!
Celebrate the Wins
“The more you celebrate your life, the more there is in life to celebrate.” Oprah Winfrey
While tracking the numbers is always fun, there’s plenty of other huge milestones zipping by on the path to FIRE. These are the moments to celebrate just as much as another gain in your share portfolio.
One way to celebrate your journey is to keep a gratitude journal or an achievements diary. A gratitude journal could simply be a daily account of everything you were grateful for that day. It can help you keep a positive mindset during downtimes and focus on those silver linings. An achievements diary is something you could record on a monthly basis. At the end of each month, you outline all the amazing things you achieved. As an example, it could be bigger achievements like buying a new house, or little everyday things such as a really fun night out with friends or baking a successful sourdough loaf.
What ways can you celebrate your wins along your journey? If you don't like record keeping, you could just dance on the spot or splurge on a nice dinner.
Ignore the Punters
“The stock market is a device for transferring money from the impatient to the patient.” Warren Buffet
So much can happen in the space between investing your first dollar to when you hit FI. From recessions, stock market fluctuations and even pandemics, there’s no smooth sailing when it comes to building your wealth.
It’s so important to choose wisely on who or what channels you listen to for your financial advice. It’s even more important to ignore questionable advice from unqualified sources that will be eagerly offered from all directions.
Some friends and family love to “help” here, especially those who've never invested. For example: “Shares are gambling and you’ll lose all your money,” or the classic, "Lithium batteries are the new gold, you should put your money in that!"
Major news headlines can often be another unreliable source. Events are often blown out of proportion from one day to the next: “Worst stock crash in history! Scratch that, now best stock gains in history!” Okay, that might be a slight exaggeration, but you get the point.
If you’re consistently investing over time, patience will get you to FI. Block out the negative news, allow the highs and lows to pass, and stay your course.
Still learning about investing? Start by reading books or articles from Warren Buffet, John C. Bogle and JL Collins. They share some very wise words and easy to understand advice.
Now you’re armed with some new insights, what changes can you make in your life to get you ready for FI?
Do you feel you’ve already created a balanced lifestyle and are well on your way? Or are you already looking up destinations for your mini-retirement right now?
By finding the right balance, and integrating a financially independent mindset, you'll learn to stop hurrying through today to get to tomorrow. You'll check in from time to time, knowing the trajectory is right, then sit back to enjoy today, right now, this moment, exactly as it is.
About Sarah from Keepin’ It Frugal | keepinitfrugal.com
Keepin’ It Frugal is a blog dedicated to living more with every dollar. It’s a home for people who know that by living a life of financial freedom, we gain the power to choose our work, holidays and home. Follow the adventures of Sarah & Laura on their path to FIRE, through frugality and wellness.
NOTE: Aussie FIRE is a free educational resource prepared by Pearler, with permission from the co-authors. At Pearler, we strive to make investing for your long term goals easier and fun, but we only provide general information and/or general advice. We don’t present you any options based on your personal objectives, circumstances, or financial needs. Any advice is of a general nature only. All investments carry risk. Before making any investment decision, please consider if it’s right for you and seek appropriate taxation and legal advice. Please view our Financial Services Guide before deciding to use or invest on Pearler.
