FIRE: Financial Independence Retire Early

The internet has been awash with the philosophy of FIRE. “Financially independent, Retire Early”. It’s an admirable goal. The main goal is to save the vast majority of your income while downsizing your lifestyle. Once you have hoarded a large enough stockpile of cash and developed a money tree, you can effectively live without any financial worries again.

And the catch?

The catch is, you have to maintain the same lifestyle when you retire as you had while building up your cash stockpile. This can be hard for a lot of people. Once you retire you will find yourself with a lot of extra time on your hands. And we all know that can lead to spending more money.

So the rules of FIRE

Downsize your living expenses massively!

Save a much as your income  as you can and invest into a money tree

Once you have saved 25 times your yearly expenses you can retire!

So for example, if you want to live on 30000 per year- you need to create a money tree of $750k. This allows for drawing down of 4% per year from your money tree. Where you have invested your money does matter here.

For instance, you can’t rely on term deposits or saving rates at banks, because they are lower than 4% per year. You want to get an average save rate of 4% + inflation, and maybe a few more per cent, this allows your money tree to keep growing.  So aim for something like 7 to 8%. Not too hard considering in the last few years, the NZ stock market has been doing 20%.

So how long will it take?

Let’s say you work your little arse off and earn 60k after taxes (~77k per year gross).  You’re a good saver, and manage to save and invest 30k per year, earning around 7-8% average. Everything going smoothly, you will have your money tree in 15 years.


That is crazy. After 15 years you don’t need to work ever again. I know it sounds like a lot of time, but the average working life is much greater and is probably going to be up in the 50-year mark.

Many hard-core FIRE people try to save much more than 50% of their income. They aim for extreme frugality and try to save around 75-80%. This slashes the time required to build your money tree. Down to only 10 years for the above example.

My Goals

I like the idea of FIRE, however, it is a bit radical for me. And besides, I don’t think I am that disciplined to save 50% of my income. There is also the fact that I have to pay a mortgage which makes it even harder to save a large amount. My aims are to save 30% of my income and to build up a money tree.

My idea of retirement is also slightly different. I don’t want to stop work altogether, as I get a great sense of achievement from it. Rather I want to use the money tree to subsidise my life, allowing me to reduce my working hours and pursue other hobbies.

So how am I doing?


I have been reading about this stuff for years, and over those years I have been saving only around 10%. But that is what I hope this blog will help me out with. It will provide me with more accountability and hopefully get my savings rate up to 30%.

Anyway, Let me know what you think about FIRE… And if you think you could be disciplined enough to live by its rules

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