So what is FIRE then?

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FIRE originally stood for Financially Independent, Retire Early – but there’s as many definitions as stars in the sky these days. Perhaps a better understanding would be:

What would you do if money was not an issue?

No matter what your current situation is, if you had enough money to cover at the very least your basic needs of food, water, shelter and the associated costs of life, what would you do? Would you keep working to build more security? Would you spend all your time on fun hobbies? Would you spend more time with your children? Would you travel more?

This is what I believe is the true definition of FIRE: the freedom to have choice.

How to get there

Why do you go to work in the first place? Unless you are a very lucky individual indeed it’s probably to pay for the costs in your life and to earn some money for fun activities along the way. I know that’s why I am currently employed!

There’s a simple (but not easy) path to get there:

  • Remove all debts from your life (credit cards, loans, mortgages)
  • Reduce your outgoings on stuff you don’t truly care about
  • Build your savings up by spending less than you earn
  • Build a passive income stream or three

This is the path I myself am currently going through and it won’t be achieved through a lottery win or inheritance. The UK has some pretty amazing benefits to help people save their money and keep it sheltered from the taxman, but that’s a story for another article. The most important point on that list is getting out of debt. And it seems the people of the UK are doing the exact opposite of this.

Why I think FIRE is important to spread

The ONS (Office for National Statistics) shows this debt increase in their latest report on UK household debt and provides some rather fancy graphs on how this is broken down, like below:

UK household debt up to March 2018 (source: ONS)

It’s worth having a look through the full report, but as you can see, overall – debt is increasing. Debt is becoming normalised. When you’ve been to university and come out with £30,000+ worth of student loan debt, you’re not going to think having an extra £3,000 on a credit card is that much of a problem.

The problem will only get worse

How many things do you ‘buy’ (rent) on a monthly basis these days? Your car? Your entertainment? Your music? Your food?! Advertisers know that most of us don’t have a lot of disposable cash lying around, so instead of the full upfront cost, these services are being presented as merely £x/month – because it sounds so much more affordable!

Of course, that’s not to say every service does not have value. I myself think that Netflix is good value at £8/month for the programs I enjoy watching, but there are far better, cheaper and easier ways to travel, feed and entertain yourself than the above.

The solution?

To stop following what everyone else is doing and determine what values are important to you. Work out what truly interests you in the world. Look at the bigger picture and ask yourself a very important question:

Who are you and what do you want to do with your life?

I share my thoughts on my own FIRE journey starting from here.

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