If you are a salaried employee working in a job you don't like for a boss you despise, you have probably often asked yourself what are you doing there.
Many people spend their entire working lives in this unfortunate position – and it is one of the reasons so many people are stressed and unhappy.
It is astonishing to see the difference in these same people if you meet them a few years after they have retired. They are often much happier people. They may not have a lot of money to spare, but they are living better lives.
Is it time to ask yourself some questions?
Many people are not living so much as existing; not questioning why they are working so hard, what they are striving for, or how they really want to live their lives.
Many people follow the well-trodden path of going to school, getting a tertiary education, getting a job, raising children and then retiring one day.
There is nothing wrong with this path, provided you derive satisfaction from your labour and feel a sense of purpose and self-worth. Sadly, however, this is not always the case.
If you are in the unfortunate position of not feeling satisfied, purposeful and worthy, perhaps it is time to ask yourself what you really want to do with your life. There are many sensible solutions – and perhaps it is time to FIRE yourself.
The case for FIRE
FIRE (Financial Independence and Retire Early) is a movement born in the USA. It consists of people who turned the traditional concept of working upside down. Its committed members can be quite extreme in their choices, but they offer valuable lessons for all salaried employees.
Financial independence is well understood by now. You need sufficient assets in order to earn enough income to cover your lifestyle costs. Generally, most people work their adult lives to achieve financial independence.
FIRE turns this concept on its head by getting people to focus on what they would need, at a minimum, to get by every day. From there, they work out how to achieve this minimum standard. Having achieved this minimum standard, they stop working completely or find meaningful work without too much concern about payment.
People who are serious about this lifestyle start by asking themselves the following kinds of questions:
- Do we, as a couple, need two cars?
- Do I really need a car that costs so much? What about a car that is a means of transport only?
- Do I need the latest smartphone?
- Do I need a cappuccino every day?
- Do I need to live in a big city/ in a house with more bedrooms than inhabitants?
- Can I grow my own food, not just as a hobby?
- Can I barter excess produce with other people, for essentials?
- If I am not able to stop working entirely, can I live a largely FIRE existence already, so that I can save 45-75% of my earnings to reach my goal?
Some of the changes above may seem extreme. However, you must identify your purpose. What do you really want to do with your time? How do you want to spend your life? If you find purpose in your life and are happy to spend your time as you currently are, congratulations! If you are not this fortunate, however, perhaps it is time to reconsider your priorities.
Most people belonging to the FIRE movement continue to do some side jobs, but they can earn sporadic income without undue financial pressure – and the additional income becomes a bonus for luxuries rather than necessities.
It would be a mistake to think adopting a FIRE lifestyle by choice is easy. Making financial and lifestyle sacrifices can be very difficult.
One of the best ways to change your spending habits is to join a group of like-minded people. These FIRE groups are quite vibrant in the USA, and people share ideas on saving and living frugally. They spend time together cost-effectively, i.e. cooking at home rather than going to restaurants. They arrange picnics or go hiking rather than going to movies.
Consider joining or starting your own group in South Africa. Alternatively, you can get a financial 'training buddy' – someone you can share your goals with, and who can help keep you motivated when times get tough.
- Warren Ingram is a wealth manager at Galileo Capital. Views expressed are his own. Contact him on @warreningram
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