How I Got Started With FIRE

Wait, what do you mean how you got started with FIRE? Do you mean FIRE as in exothermic combustion? Careful there laddie, explain yourself.

No sir, nothing as malicious as that – I meant FIRE as in Financial Independence Retire Early. It’s a pretty novel concept and sort of a movement which originated in the USA.

Here in Australia though, I haven’t really heard of anyone achieving FIRE.

We didn’t start the fire – it was always burning – since the world’s been turning.

Mind you, I don’t expect the ones who have “retired early” to sit home and play Call of Duty all day. I’m sure once you reach a level where you can retire young, you don’t. Life’s too short to sit around shooting virtual zombies.

But how did I start on this journey? Accidentally it would seem, here let me explain.

The very first conversation I had regarding retirement was in Year 10 Commerce. We were mucking around with my friend’s MD player (remember those?) when one of us said that the MD player probably costed around a week’s wages.

Hell yeah, I remember you!

This led the conversation to various scenarios and hypotheticals and we ended up trying to work out how much earnings you earn through a lifetime.

None of us really had a clue of what the average salary was or how many years made up a lifetime of work so we took random numbers in the air – $50,000 per year for 30 years.

By that age we could calculate simple multiplications fairly well so knew it amounted to $1.5m.

That’s a lot of money to a 16 year old. I know because I said at the time “that’s a lot of money”.

Maybe not in Zimbabwe…

Of course, it wasn’t until I received my first paycheck when I got a good dose of reality.

My 16 year old self didn’t factor that out of the $50,000 p.a. you have to pay tax and associated levies (e.g. Medicare). Punch it in a simple tax calculator and there goes $10k.

Of the remaining $40,000 – well you have to live somewhere don’t you? Let’s say you rent or pay board, that’s another $200/week gone. So you’re left with $30k (I like working with round numbers).

Out of the $30,000 remaining you have to eat – call it $100/week, that’s $5k a year.

From the original $50,000 – you’re down to half, and that’s not even including any social activities.

Social Activities.

Suddenly it will take 60 years to reach $1.5m.

Whoa, 60 years with what I assumed would be a 30 year goal – demoralising stuff.

Naturally though you would hope you’re not on $50k p.a. forever – as you gain more experience and move up the ranks, your earning capacity increases.

This is what happened to me, with each passing year and each new job opportunity my pay incrementally went up.

But I noticed a funny thing – my level of savings in the bank did not rise at the same rate as the level of my pay increases.

Almost got it Jimbo!

That’s when I really began to try and figure out what I should do to accelerate my earnings and reach that $1.5m number faster.

It’s taken me over 30 years but I think I might be onto it:

  1. Mindset
  2. Research
  3. Action
  4. Review
  5. Repeat

What do they all mean? Follow this blog and find out!

P.S. The real irony is that now I think the figure of $1.5m is too low to “really” retire – sigh, wish I was 16 again.

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  • Innocent Bystander

    Top of the day to you Frugal Samurai!

    Could you elaborate on the following:

    – What’s the ideal age you’d like to “retire”?
    – What’s the revised goal now that you feel $1.5M isn’t going to be enough
    – What would you be doing when you actually “retired”?

    And please don’t let the answer be “you will find out in my future posts” – I hear way too much wishy washy, insipid materials on a daily basis so enjoy the fresh air you bring!

    • The Frugal Samurai

      Hello Innocent Bystander, you will find out in my future posts “ducks for cover”.

      Seriously speaking – I have my goals and targets, at this moment it is at age 40 to be semi-retired and 50 to be fully retired, note when I say retirement I don’t mean sit around and watch daytime TV all day, it’s about the freedom to pursue your life’s projects without having the need to worry about your finances (wouldn’t we all!).

      What are those projects? To really share my knowledge and help others achieve their financial dreams. It’s mostly why I started this blog – I was fortunate to have read many, many articles and books written by people who were willing to share their journey, why not do the same for the next generation? Of course, would love to have the time to smell the roses and watch the kids grow up (don’t have any yet), maybe a bit of travel to see the ancient wonders of the world before they disappear – I’m a simple man, always have been so I don’t think I’ll be pursing any fancy material possessions.

      In order to achieve this I have a goal of accumulating $1m net in the next 5 years, then another $1m in the next 3 years, then $1m in 2, then $1m every year following. Who knows if I will get there but that is my aim – why not think big?

      Wow – here’s the inspiration for a new blog post!

      • Innocent Bystander

        For sure. Not everyone get to do or is doing what they love or passionate about. That’s a sad reality when the almighty dollar dictates how you should live. Of course, if money isn’t a problem, we’d see a lot of people live differently. No one truly retires, it just means that you don’t rely on a 9-5 shift just to put food on the table.

        Dream big? Beautiful. Don’t be disheartened if it falls short. Adjust expectations or sometimes there is nothing wrong with what you are doing, it just takes longer to bear fruits. For one, you gotta believe in what you are doing and fundamentally the idea has to be right. Number two is doing it through the proper channels. Then last but not the least is perseverance. Of course, sometimes you do hit a dead end and there is nothing wrong with that, perhaps the idea isn’t correct to begin it, so make adjustments and march forward again.

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