Get out on pension At 40 or 45, it sounds like most people's dream.
Yet, in recent years more and more people in Europe and the USA have followed the FIRE movement (Financial Independence, Retire Early – Economic Independence – Early Pension), with the aim of acquiring financial independence and leave work decades earlier than the average worker.
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The philosophy of the movement FIRE based on a simple principle: you spend much less than you earn, you save aggressively – even 50% or 70% of your income – you invest the difference and you let the time and returns to «Work» For you to retire early.
For some
is the way to freedom. For others, an excessive sacrifice that denies
the joy of the present.
«We didn't turn on the heating – we were buying our freedom»
A typical example is Alan and Katie Donegan from Britain, who managed to retire when he was only 40 and she was 35.
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As Alan Donegan at the BBC describes, every winter they avoided opening the heat, wore more clothes and used thermophores. «It wasn't trouble, it was strategy.», he says features, explaining that their goal was perfectly clear: economic freedom.
FIRE: Movement or philosophy? A couple became financially independent, stopping work
The two almost never bought ready food and for ten whole years went to work daily with food from home. According to him, only this habit saved them about £40,000 in a decade.
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Katie.
Donegan, a former accountant in a financial company, also explains to the BBC that every pound they invested constituted
«One more step towards life they really wanted». When investment and investment
Their savings reached £1 million, they finally abandoned the job.
Life without car, alcohol and... unnecessary markets
The same philosophy follows David Scothern, a self-employed housing loan consultant from Sheffield, who estimates he will stop working at 46 years.
David Scothern plans to retire at 46 / Photo: Whatsap p
Speaking to Sky News, he explains that he left not only gambling – from which he used to be
addict – but also car, alcohol, smoking and a series
consumer habits.
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«Most jobs today do not offer real freedom or autonomy. The idea of working until the mid or late 60s seems extremely depressing to me», report.
Together with his partner they live with about £20,000 a year, while investing most of their family income in passive low-cost investment funds.
36-year-old moved from Chicago to Spain: He works 16 hours a week, is a semi-retired: «You have a life. Live it right»
Research: Six out of ten Greeks still do not save for their pension - Image in Europe
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He did.
But he warns those who want to imitate him that investments are not
Game. «If you can't explain in simple terms where you invest the money
You probably don't get it either.», notes on Sky News.
Economic independence instead of... perfect life
Similar path
followed by American educator Amy Minkley, who
She retired at 44 years.
As she told the BBC, she worked in private international schools in Japan, Singapore, India and Thailand, where she could save significantly more of her income.
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He didn't buy expensive clothes, he kept the electronic devices until they broke down, he cooked almost all meals at home and thought twice every important purchase.
Today she lives in Bali, where her investment income is much easier to cover her expenses.
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As a summary,
the same, «FIRE authorities
It's simple: spend less than you earn, invest the difference and give
time in your money to grow».
But it's not for everyone.
Despite its popularity, several experts point out that FIRE is not a realistic option for the large majority of workers.
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Carol Slife, head of BMO Private Wealth's strategic shopping, tells the BBC that most of her customers no longer seek to stop work as early as possible and get out early in retirement, but to achieve a better balance between work and personal life.
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As he points out, if one retires early but loses his friendships, health, or sense of purpose, then it is reasonable to wonder if the sacrifice was ultimately worth it.
In the same length
And Sarah Coles, head of her personal financials.
AJ Bell investment platform. Speaking to the BBC, he points out that the constant increase in cost of living
makes it increasingly difficult to implement the FIRE model.
However, it considers that
that several of its principles can benefit all: to begin
early savings, gradually increase pension contributions after
any salary increase and invest consistently.
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The new trend: less work than full retirement
Just because the traditional FIRE is considered too demanding, milder versions, such as the so-called «Barista FIRE».
In this model, investments cover most of the living costs and the remainder is supplemented through a flexible or part-time job, allowing more free time without full departure from the labour market.
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This trend
reflects a more general change in attitudes: fewer seek not to
ever work again and more have the choice to work alone
because they want it.
Can early retirement even affect the brain?
At the same time, new scientific data put another parameter into the debate.
Italy: 56-year-old played for 3 years his dead mother to continue collecting her pension
According to a survey by the National Bureau of Economic Research, published this year and presented by US News, early retirement from work at ages 51 to 64 was associated with a faster cognitive discount, while those who remained active professional showed better performance in cognitive function.
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The Professor
Economics of the University of California in Irving and its co-author
study, David Newmark, notes that work offers continuous
intellectual challenge and social interaction, operating elements
protective for the brain.
On the other hand, Shei Huang Khan, an associate professor at the University of Texas in Austin, explains to US News that those who go out early in retirement can maintain their spiritual health through volunteering, social activity, new skills and meaningful employment with activities that give meaning to everyday life.
Perhaps this is the greatest lesson of FIRE: economic independence is not an end in itself. The real question is freedom of choice. And this, it seems, depends not only on the amount of the bank account, but also on how one chooses to live when one acquires the time he so much sought.
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