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Retirement Discussions / FIRE Wannabees
|Subject: How to FIRE||Date: 8/9/2003 2:52 PM|
|Author: mazske||Number: 262 of 5129|
The way to FIRE is easy. You save up approximately 25 times your annual expenses and then you FIRE. Ok, how to do this you may ask.
First, you must be making money in some fashion in order to save up this money. That means you are more than likely working a job. There are many different jobs available out in the wide world. They may range from jobs you love that pay little to jobs you hate that pay a lot and many jobs that fall somewhere in between.
My recommendation is to find a career that you enjoy that pays fairly well. I may love to read, for example, but a job utilizing that talent may pay very litte. I may have great computer skills and jobs that utilize that talent may pay a lot, but I don't love jobs like that. So, I may have to settle for a job that pays in the mid-range that sometimes I really love, but other times I don't.
Now, I've touched in various government/military jobs in an earlier post. Jobs along these lines will many times have some sort of pension if you work X number of years.
There are many, many different types of "civilian" jobs. Most of these do not have your typical government pension, but they may have a 401K plan or something similiar. These jobs many times will pay more than a government job as well, but then you must factor in completely funding in your retirement versus having a government job that will fund a portion of your retirement.
In the meantime, no matter what job you end up in, you should live below your means, LBYM. That means you spend less than you make. Easier said than done, right?
Here are some basic tips for LBYM.
Evaluate each and every dollar that you spend. Yep, that means think about that 55 cents you spend every day on a candy bar and that dollar on a soda. $1.55 a day is $7.75 a week which comes to $387.50 for a 50 week work year. See how those dollars add up?
Now, let's say you want to buy a new couch this year. Instead of plopping down 2K for that nice lazy boy reclining couch, couldn't you shop around, be patient and wait until you find one on sale with $500 knocked off and 1 year of no interest?
Also, couldn't you peruse the papers until you found a nice, used lazy boy reclining sofa that looks as good as new that is marked down to $200. Trust me, these bargains are out there.
So, couldn't you at the same time start looking at thrift shops, yard sales and flea markets when it comes to outfitting your house/wardrobe. Now, this means you don't get hooked on yard sales where every week you are spending a hundred bucks at them, but you can pick up some great buys on things you "need".
Need?? Do you really need that new couch or will the old one last another 10 years? What about that new book that the library will be getting in next month where you can read it for free.
How about those expensive pharmaceautical drugs and doctors bill? Doesn't it make sense to exercise on a regular basis to keep yourself in better shape? Doesn't it also make sense to eat healthier for the same reasons.
As far as eating healthier, let's go back to the candy bar and soda example. Let's say you instead drank either water from the fountain or made a cup of green tea from tea bags that you brought with you. Hey, if I can go in 7-11 in uniform and make a cup of green tea, you can do it in the privacy of your own office. The health benefits of green tea are incredible so do yourself a favor and start drinking it.
Remember an apple of a day keeps the doctor away? There's is some truth to this.
What I'm trying to get at is that the healthier we all keep ourselves, the cheaper our medical costs "should" be. There is always that unknown factor that can get thrown in so there is never a guarantee.
Food is a big cost for a lot of people. Most supermarkets runs specials on a regular basis. Follow these specials. When chicken is marked down, buy extra chicken. Do the same when meat is on sale and fish is on sale. Stock up on soup when it's marked down and beans when they are marked down. Yes, initially you may get a surplus of whatever item is on sale, but over time you can obtain a good variety, all or most at discount prices.
Watch your utility bills as well. If it's overcast and 80 degrees, do you really need to use t