Asking on behalf of a friend, how to get to FIRE starting at 30 or even 40 ? - Seedly
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HC Tang

Asked on 14 Jan 2020

Asking on behalf of a friend, how to get to FIRE starting at 30 or even 40 ?

Happens to read this, share with all: https://thewokesalaryman.com/2019/12/16/over-30-its-not-too-late-to-fight-your-way-out-of-wage-slavery/

Any more practical way to start and earn scalable recurring side income ?

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Lim Boon Tat
Lim Boon Tat, Mathematics at Cambridge University
Level 6. Master
Answered on 21 Jan 2020

Hey! Education is the best investment, especially if you're starting late. There's tons of FIRE blogs are there, but if you're like most heartlanders in Singapore, with at least a 30 minute commute in the morning, i would suggest downloading the app Libby, where you can borrow ebooks from the National Library very user-friendly interface (wayyy better than the previous method of using Overdrive).

My top recommendation is the following book available as an ebook via Libby

Financial Freedom: A Proven Path To All The Money You Will Ever Need by Grant Sabatier. My personal review is that this book covers 95% of everything you need, including how to ask for a raise, how to start a side hustle, how to invest etc. If you need a great starting point, i think this is it. This was written by the blogger of millenialmoney.com and he also has a fairly informative podcast. Go check those out as well.

I guess i will end with: for almost anything, the best time to start was yesterday. But the next best time is today. And you dont have to start perfect, or start 100%, you just have to start. And i think the above book will give you more than sufficient strategies/tactics to get started in 90% the right direction.

Best of your luck.

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HC Tang
HC Tang

21 Jan 2020

This is so helpful 👍
Anant Shiva
Anant Shiva
Level 2. Rookie
Answered on 28 Jan 2020

Mr Money Moustache's article is a great starting point https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

He essentially outlines that cutting your spending rate is much more powerful than increasing your income. You can refer to the table in the article linked above and see that if you have a savings rate of 50%, you can retire in 17 years. Save 70% of your income and you can retire in 8.5 years.

So if you earn $50,000 a year, save and invest $25,000 of it, then you can retire in 17 years. This means that after retirement, you need to continue to live on $25,000 a year. But with geoarbitrage, you can stretch your money way further.

Another way to approach is to figure out how much money you need when you retire and work backwards. If you need $40K a year to live on, you need to work towards $1 million.

It's not that crazy, honestly. If you save $3500 a month (you and your wife, if you're married?) at 6% for 15 years, you'll have a million bucks.

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Sharon
Sharon
Top Contributor

Top Contributor (Jul)

Level 6. Master
Answered on 28 Jan 2020

Spend less, earn more (increase topline salary & get a side hustle), save more, invest in dividend stocks and/or growth stocks. Rinse & repeat for 10-20 years.

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HC Tang
HC Tang

28 Jan 2020

Thank you
John Smiths
John Smiths, Tax at Local bank in Singapore
Level 5. Genius
Answered on 19 Jan 2020

That's a good article to go on and it's basically about earning more active income (such as salary and side income) and passive income (such as dividend and rent) or start earning business income. On top of that, cut your expenses too.

Ask your friend to first choose the route that works best for him and commit to it. Otherwise, it's easy to get lost in your approach and end up in a worse position.

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HC Tang
HC Tang

19 Jan 2020

Great. Thank you. I'll definitely share with him 😀

Firstly, we need to have a complete understanding on our cashflow. Through this process, we will understand our earning ability and spending habit. Here is a guide to help you: https://www.blog.pzl.sg/understanding-your-personal-cash-flow/

Once your cashflow analysis has been completed, perform a detailed calculation on the amount of money that you need from the age you reach FIRE till the time you do not need the money anymore, e.g. life expectancy + delta.

After we have a complete figure, it is time to work backwards to find out how much money we need today.

To do so, create a budget that is capable of helping you to plan for the future. The best way to do this is via automation and this is how I do mine: https://www.blog.pzl.sg/how-to-create-a-monthly-budget/

While a budget helps you to save and grow your money for your future, it is always nice to have a guaranteed source of passive income, e.g. annuity, or channels that provide similar guarantees in life.

Scalable side income requires time to build. Start early and let compounding effect do the work for you. For instance, annuity, royalty, ads can be pretty decent starters.

Here is everything about me and what I do best.

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HC Tang
HC Tang

15 Jan 2020

Thank You!
MJ
Mickey J
Level 3. Wonderkid
Answered on 15 Jan 2020

I feel that the best way to get started is to build a plan that's tailored to you.

1) Know your expenses and optimise them, removing the ones that you don't need.

2) Give yourself a FIRE number. How much do you need to stop working, based on your expenses. A simple formula could be 25X your annual expenses, but factor in your personal milestones (e.g. getting married, having a kid, etc.)

3) Create a plan on how you intend to achieve your FIRE number and identify ways to accelerate it. Whether is it to rise up the corporate ladder faster, create other side incomes, etc.

Hope this helps.

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HC Tang
HC Tang

15 Jan 2020

Thank You!