I can (theoretically) retire, so can you?! Part 3

Picture Credits to hustleventuresg.

This is part 3 of my I can (theoretically)  retire, so can you?! post.  Didnt mean it to be a trilogy. It's not as if it's a blockbuster or something. 😅

Part 1: Here

Part 2: Here

Yeah, so i was saying i think i have achieved FIRE, but the basic version Barista version since I would want to earn some bucks along the way. . I first came across this term 6-7 years ago when i first started this blog. The concept of it forms the basis of the endgame for my worklife, to retire early and stop working.  It is nothing daunting. The term FIRE sounds very cool and revolutionary , but the concept is really simple. It's just someone out there who has a very good marketing mind decided to just give it a cool abbreviation. FIRE! Which basically means Financial Independence, Retire Early.  This is how the world works. You need to make it sound and look cool and it will become the next trend. It's just like how sometimes you will think that the business concept of the billion dollar unicorn sounds like what you had been thinking about , but didnt act on it. 

When i used the term recently with a very close friend, he jokingly said "eh, i very scared that when you become a part time property agent, you will start to sell me all those investment ideology leh..what FIRE you talking about sia? The only FIRE i know is the discotheque leh. "

How did this FIRE movement become a worldwide movement? It's basically just math isnt it? Even the spreadsheet that is freely available online isnt that difficult in terms of math. You could have done the same thing on excel sheet using 5 or 6 rows.

Frankly speaking when i first read about it and toggle around with the "calculator", i was very excited as well. ( i am only human. :)). Then i realised, eh, isnt it similar to what most people already know? Simple math isnt it? If your daily expenses is fully covered by your passive income, then theoretically you can start to retire already no? Since work is a mean to have income to sustain one's life. Of coz, this is the most basic form.  Some people may want a more lavish lifestyle, so the daily, monthly or annual expenses will increase. Then if you dont want to continue to work, and you never strike toto, these expenses have to be taken care of by other income source, which is your passive income. 

On top of your expenses, you will want some buffer so in case of emergencies, you will not be panicking since you don't have a job. Then of coz inflation.  So basically it's your monthly expenses (x) multiply by buffer/contingency (y) and also inflation (z) x 12. So that's what you need to have in terms of passive income per year if you want to stop working, but of coz you can continue to work if you want, so whatever work income you have will go into growing of your portfolio. The lower your expenses, the earlier you can reach FIRE.  To me, this is really straight forward, but it's growing of portfolio that is extremely difficult. 

It's really important to start putting some amount of money into investment regardless of how small the amount maybe. You need to make your money work for you, and money attracts more money. Dont belittle the 100 dollars you put in per month. Perhaps you can also separate out your needs and wants. Instead of spending money on your wants, why dont you put the money to work? It's a small step to begin your investment but a big step towards FIRE, which ever version it may be.