When we’re pursuing financial independence, we need to discover the right savings rate for our family. This is something that Nicole and I have had a lot of conversations about. How much is too much to save? And how little is too little to save?
I invited Scott Rieckens on the show because he’s been on a very similar (big-screen, public) path with his wife, Taylor. Scott is a 2-time Emmy nominated filmmaker, Executive Producer, and Co-Star of a new documentary called Playing with FIRE. This is a documentary that uncovers the growing community of frugalists, mustachians and valuists choosing a path to financial independence and early retirement.
Kristy and Bryce are Canada’s youngest retirees. They used to live in one of the most expensive cities in Canada, but instead of drowning in debt, they rejected home ownership. And what resulted was a 7-figure portfolio, which has allowed them to retire in their 30s and travel the world.
Their story has been featured in the New York Times, Forbes, Huffington Post, amongst many other publications. They’ve written a book on FIRE called Quit Like a Millionaire and it’s out this month.
In order to achieve financial independence, you need to first understand what your annual expenses are. That’s how much money you need to live comfortably every year.
Your annual expenses can include things like housing, transportation, food, utility bills, entertainment, travel and the many other things that make your life … well, your life!
For our family, I’ve found that number to range between $60,000 and $70,000 per year. That number is after taxes and it doesn’t include money for saving and investing.
With lower annual expenses, it would definitely be a lot easier for our family to become financially independent.
If we’re using the 4% rule to calculate how much to save to become FI, then we’d need $1,500,000 – $1,750,000. Considering I have around $4,000 in a taxable brokerage account at 37 years old, that’s going to take quite a while!
Financial independence and early retirement are huge accomplishments. Like running a marathon, becoming debt free or losing 100 pounds, they require focus, patience and a whole lot of perseverance.
This monumental financial status allows you the freedom to do what you want when you want and have the location independence you desire.
Author Deacon Hayes joins me today to talk about his new book, You Can Retire Early! We’re gonna review the ins and outs of how each and every one of us has the opportunity win at the game of early retirement.
Popularized by extreme frugality rock stars like Mr. Money Mustache, the Mad Fientist and Jacob from Early Retirement Extreme, the Financial Independence or FIRE community has grown in popularity over the past 5-10 years.
This is a subset of the personal finance world that encourages earning a solid income early in your life, saving a boat load of cash and retiring earlier than most of your peers.
For a frugal guy like me, this concept makes a ton of sense. Work hard, save and invest early so you can enjoy the majority of your life doing what you love.
But what happens when you’ve retired early? You still need something. You need a purpose or a goal to work toward.
I’ve been doing a lot of research and interviews lately about financial independence and early retirement. I guess I’m inspired! The idea of not having a full-time job eventually sounds pretty appealing to me.
Well, you might say, “There’s no way I couldn’t have a full-time job in the area I live in! I have to pay my mortgage, I like to eat healthy, I need health insurance. It’s just too expensive.” Higher cost areas like New York, DC, Chicago or San Francisco come to mind when we’re talking about higher cost of living. Even though these are some of the most expensive places to live in the US, our guest today proves that early retirement can be feasible even if you are in one of these high-rent areas.