SG Budget Babe
Asked on 28 Nov 2019
Given the uncertainties already on health/rental costs - adding in kids and their (future/heavy/uncertain) education costs seems to make the "FIRE" idea quite imprudent...
If you look at the overseas FIRE advocates, some of them have kids too.
Therefore, it is possible, but you would probably need to have a very supportive spouse and kids who are fully on board with the idea.
Honestly it's all just math isn't it?
Have passive income higher than current expenses and you can FIRE.
Instead of seeking out an arbitrary future goal, I'd rather focus on building good saving and investing habits, pursuing higher active income, and cutting down unnecessary expenses (and not living extremely frugally cause that can suck).
I believe FIRE shouldn't be the obsessive end goal, it should come as a consequence of good habits.
Thus, it starts before taking on commitments and liabilities. If you didn't have these habits when you were younger and free, it'll be difficult to start and force them when you already have a spouse, a mortgage, a car loan, and two kids.
But if you're starting a little later, it's still not a futile attempt, just do what you can and a little bit more. As long as you can retire one day, send your kids to school, and not be in debt in old age, it's good enough.
As I don't have kids, I'm going to look at it from another perspective and still say yes. My parents raised me and my sibling on a shoe string budget (mom is a housewife) and I have no doubt if she decided to work and invest and raise me (she's more than capable of that), she'd FIRE at around 50 years old. So as Hariz has said, it's all about the numbers. That was in a period of rapid growth in Singapore, so today you're probably looking at FIRE at a later stage if you have a kid, but still not impossible.
You just need to be prudent and pragmatic, diversify and create multiple income sources outside of work, teach children the importance of delayed gratification, and live well within your means.
If you think it won't work, then it won't. It is all about your mindset.
For me, I'm positive that I can still achieve FIRE even with kids. And I hope to have two, at least. Already have one right now and he's a bundle of joy :)
It all boils down to mindset, income and expenses.
Set your mindset right and believe that it is possible.
Grow your income, and create multiple sources of income.
Reduce your expenses and find cost-effective methods as much as you can.
The idea of FIRE has possibly it's cause in the recent (21st century) increasing trend to egotism, as well as social unrest and dissatisfaction with modern work situations.
Wouldn't it be nice to have a profession one loves to do up to her/his 70ies, 80ies, 90ies?
The proponents of FIRE possibly never experienced a satisfiying work situation.
Earning income cash flow only by financial products could in itself lead to longterm dissatisfaction, although I can imagine for myself favorably somehow reduced working hours and more time for my non-professional live. Maybe only this balance needs correction.
A hedonistic early pensionary life is possibly not associated with deep spiritual fulfilment.
To lead a fulfilled live we have to serve, but must not be exploited.
Just my thoughts.
I feel that countries like Sweden know better about a good balance, and care for employees is better over there, maybe. Would be nice to know how many persons in Sweden strive for FIRE. Maybe they strive more for a 'fire' (social place in the outdoors) ?
teach them about the movement when young. the benefits of FIRE can be felt when one starts saving when young. This is because the interest from savings and investments compound over time. When one starts at 15, the effect can be felt more pornouncly than when one starts at 30
I ask myself the same question too, as I've a newborn now.
I think the key question is our current age, combined income with spouse, savings, and expenses.
The key imperative is to have passive income that's higher than combined expenses, so that we can save up active income completely and then build a warchest for investment. Easier said though, hence I believe timing + opportunity is key. At the wrong age where there's a downturn, even if we want to invest but don't have the capital to do so, it could be futile as well.
Love kids. Need to plan to amass a lump sum to lock in before life stage changes. If not, the catch up will be harder with shorter life to compound and with greater expenses. Start somewhere NOW!
Actually there are others who managed to have kids and still achieve FIRE.
It is due to them looking at two main factors which are income and expenses.
Even without a high income, they managed to have low expenses to achieve FIRE.
One will need to be very meticulous on every money flowing to ensure that there is always excess retained.
Building multiple sources of income and knowing how to spend little enables one to achieve FIRE.
I write cool stuff about personal finance and money-saving hacks here.
The first step is always to go back to the basics on understanding our cashflow. This process allows us to understand how much time we are using to earn an income and how fast we are spending our money, alongside with whether these expneses are necessary. Here is more info about why it is important: https://www.blog.pzl.sg/understanding-your-personal-cash-flow/
Once this is completed, start to create a budget that takes into account current and future needs. While this often requires us to have an uncanny ability to foresee the future, this is also where it splits apart the normal people and those who are really serious on their future. Here is how I plan mine: https://www.blog.pzl.sg/how-to-create-a-monthly-budget/
Thereafter, have a comprehensive insurance portfolio summary to understand what we are covered for, whether we are over spending on insurance, as well as on our financial gap. I have summarised the rest of these benefits in this post: https://www.blog.pzl.sg/why-every-client-needs-an-insurance-policy-summary/
Now, we should be confident about ourselves and our capabilities and limitations. At the end of the day, it is how well we plan for our future and FIRE is definitely possible with the right planning and tools available todaty.
Here is everything about me and what I do best.