Do you want to earn money that can sustain your lifestyle without working (financial independence)? Can you see yourself wanting to retire in your 40s or even 30s instead of waiting until the conventional 60 years old? Are you willing to make huge/extreme sacrifices for the near term?

What exactly is FI/RE

If your answer is Yes to all three questions, then welcome to FI/RE, an acronym for Financially Independent, Retire Early. FI/RE is a movement that propagates extreme frugality, a high savings rate and investment; Financially secure from passive income without relying on employment income.

1. The main aim of the FI/RE movement:

Be financially independent in the quickest time possible (while in your 30s) and having the power or flexibility to choose whether to continue working.

2. How FI/RE works

FI/RE focuses on:

    • controlling the outcome of his financial future,
    • creating and implementing comprehensive financial plans
    • preventing unnecessary expenditure
    • practice delayed gratification
    • exchanges costly expenses for comparable cheaper ones. For example
      • Meals – home-made rather than eating out
      • Entertainment – calling friends over to their home rather than going to a bar
      • Car – purchasing well-maintained second-hand instead of new.
    • Cherish what they already have, instead of wanting what they don’t have.
    • Consider saving for financial independence is an enjoyable experience. Saving money is a joy knowing their money is in good hands.

It’s all about leading your dream life, not the life dictated by society.

FI/RE advocates are just like you and me…., they buy things; they hang out. The only difference is that they look for cheaper ways without destroying the pleasure. They toss the money saved into assets (investments) that make up their wealth until a time the passive income from those assets are enough to cover the expenses of their desired “retirement” lifestyle.

For some individuals, it can be daunting or they straight up think it is downright impossible to reach financial independence through the FI/RE way. The core method of extreme savings/frugality living may not be everyone’s cup of tea.

Strategies to follow if join FI/RE

Adopt the following strategies for FI/RE:

1. First thing first – what does financial independence mean to you?

You need to decide whether you want or need to continue working. That decision lies with knowing what your life objectives, values and what inspires you to achieve financial independence and early retirement. Define and visualize your life after financial independence.

Dislike for your job should not be a reason for early retirement.

2. Decide on your “FI/RE number” – total money needed to be retirement-ready

How much you need (your net worth) for you to be financially independent? This depends on your answer to the above “Define and visualize your life after financial independence”. As a rule-of-thumb, once the total value is 25 times your annual expenses, you have attained financial independence.

Consult a financial advisor if figures or number-crunching are not your thing.

3. Debt has no place in FI/RE – get your debt down to zero

FI/RE requires sped up wealth-building, thus having debts is a big hurdle. Debts usually carry higher interest than most investment assets. Use whatever excess funds you have to clear off debts first especially credit card debts.

4. Save, save, save – to accomplish FI/RE, extraordinary savings is an absolute necessity.

Extraordinary savings is the main pillar to accomplish FI/RE. A 40% to 60% savings rate is not uncommon among the FI/RE community. By saving at such a high rate, FI/RE proponents aim to retire early and live off small withdrawals from accumulated funds.

For many people, especially those in lower-income range, this is the killer principle. To them, it’s simply not workable to save at such a high rate. But according to some existing FI/RE advocate, the 40% – 60% is just a number to point out the importance of high savings and living frugally if you want to achieve FI/RE status in about 10 years’ time. Newbies can start saving say at 20% or whatever rate comfortable to them. BUT there must be progression. Even 1% progress at a time is acceptable.

The priority is the FI (financial independence) side. Achieving FI is not an automatic reason for RE (retire early). You may still work after FI if you still enjoy working. But now working become a choice and not out of necessity.

5. Simple living (frugality) is the foundation to achieve FI/RE

Frugality in FI/RE’s books is not about being cheap. Rather it’s about not spending your money without thinking. Spending should be intentional and matters to you.

Sacrifices/delay gratification/minimalism is at the core of FI/RE.

Simple living involves various voluntary measures to simplify a person’s way of life. For instance, decreasing our belongings or improving self-sufficiency. This also usually referred to as minimalism.

People happy with what they already have and buying what needed and not wanted – that’s simple living!

Simple living differs from forced poverty because it is a voluntary way of life.

6. Seek opportunities to increase your income

Equally important is your income. You need to find more ways to increase your investable fund if you want FI/RE. Whether it’s a side hustle, part-time job or freelancing, additional income plays a big role to speed up FI/RE.

7. Invest the money saved

Don’t put all your money into savings and FD. There are other investments that give you better returns over the long term. Invest in low-fee investments such as an index fund, rental properties and passive income streams.

Get help from a financial advisor if you are not comfortable in managing it. You can get confused with the myriad of investments out there.


Would FI/RE work for you? That depends on a lot of factors but 2 important one that pops out so glaringly:: how much can you earn and how much can you save. It is essential to have enough earnings to save while still fulfilling your primary needs. Ultimately, the decision to pursue FI/RE lies with you.

As there are many variables involved with each individual having their own specific circumstances, it’s often best to seek the advice of a financial advisor to help in your decision-making.


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So, is FI/RE right for you?