In the popular Hindi movie ‘Zindagi Na Milegi Dobara’ (You Only Live Once), the lead pair meets serendipitously in Spain where he, the proverbial successful young man, has gone reluctantly with his friends on a vacation long promised. As they move around town, he tells her that his dream is to earn lots of money and retire at 40 to which she retorts, “Dude, how do you know you will live to be forty? Seize the moment and live it to the full”. I remember this scene whenever my colleagues or friends speak of early retirement.
Author : Scott Rieckens
Originally Published :2019
Publication :New World Library
Pages : 224
Genre(s) : Non-Fiction, Business, Economics, Personal Finance, Lifestyle, Money Management
Scott Reickens is an Emmy Nominated Film/Video producer and a storyteller. His documentary by the same name, Playing with FIRE, telling the story of Scott and his wife Taylor, was much appreciated.
Scott begins by citing a research in Nature which says that it takes around $75,000 (or local equivalent) for a person to feel emotionally contented and happy about money. Anything more momentarily enhances happiness but not to a large extent.
Scott’s life story could have been that of any one of us- the dream job, high income, and an earning partner who shares your passions and splurges equally. Then comes the family- the kid and the expenses that follow. So the goal of retiring at 40 with a heavy bank balance seems to be in the horizon as you slog in more hours since you’ve not saved for the increased expenses.
Scott and his wife made a list of the ten things that make them happy and turns out they both love experiences and inexpensive things more than what they were spending on. So why were they spending on them in the first place? Because they felt they were entitled to do so coz they earned more money.
How to achieve Financial Independence and Retire Early
It’s simple, says Scott. A large part of wealth comes from savings, investing early and taking calculated risks with rentals. He doesn’t fail to add some more tips-
- Cut down on fun spending like electronics, clothes, toys and more.
- A lot of spending happens when we eat out, instead of cooking at home.
- Using credit card rewards to fund vacations
- Biking instead of car, cheaper house and shared nanny to save money
Scott shows with the finest detail how expenses pile up which are not necessary in the first place. Things that we fancy and buy because we feel we ‘need’ them but all we feel at that time is just ‘want’ them. These small luxuries and buys add up to a substantial purchase list at the end of the year. Most of this is unused, unwanted or absurd. Luxury cars don’t serve any better than your average roadsters, but eat up money through inflated EMIs. Eating at home costs far less than eating out even once or twice a week. This book proves an eye-opener in many ways. He stresses upon Self reflection, Cash (how much each thing costs and how much you can save) and Data (Ah! The bulwark of frugal living- knowing what you must know). Scott reminds us of Tim Ferris who made the term Geo-arbitrage (using geography to lower your expenses) popular.
Through a series of testimonials of couples who have used FIRE method in their lives, it gets clear that this planned way of living indeed works wonders in the long run. It allows you real financial freedom and the choice of retiring early to pursue your passions.
- That assessing your expenses and cutting them by careful thought goes a long way to save
- Savings, investments and optimal living can earn you more money than you could imagine
- Seek help from experts who understand personal finance better and can show you how to make the most of life
- Invest wise. Track all options and not just bank or insurance.
- Spend less than you earn, Invest the difference and track your expenses minutely
Why I recommend this book
Because it shows you that getting rich is as much about planning and saving money as it is about earning more. Just because you’re earning more doesn’t mean you are entitled to spend less without thinking of saving. I loved this book as an advice for young professionals who aim to retire at 40 but have no plan how they’d manage the lifestyle once the regular income dries up. The key is to earn and put your money to work after some years. That, according to me, is the chief lesson of Financial Independence and Retire Early.
Read also to know that money is fluidic. It must be put to use wisely. It must be employed. Money can downsize or upsize based on our idea of luxury. Having to choose between a good living and luxury living is a personal decision. I have recommended this book and the documentary to several people and earned some thanks on the way!
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