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The Dream of Retiring Early
The Dream of Retiring Early TEXT KAROLINA GUSTAVSSON ILLUSTRATION FILIP ZAWADKA
Do you ever sit in the library hard at work, plowing textbooks, wondering where else you could be right now? Do you ever find yourself loathing the idea of studying 50 hours per week, just to be able to slave away in an office for 40 years before retiring?
Imagine having lots of time for your friends, family and local community. The freedom to take jobs purely based on what you find stimulating. Being able to move long term or travel without worrying about how to pay the bills. Being able to be home with your kids when they are small. In a nutshell, more freedom than you have today. A freedom that most people won’t have until they’re in their 60s. There’s a movement for this, called Financial Independence Retire Early — or FIRE for short. One could even go as far as to describe this as a lifestyle. I decided to investigate this dream and interview my friend Aiman who is pursuing FIRE. What’s your reason for pursuing FIRE? - Mainly I want to not have to choose an occupation based on what’s profitable, but instead being able to do what I feel like — stand up, tutoring, cleaning up the ocean from plastic… have time for my future kids. It's about having the freedom to choose.
For most of human history retirement wasn’t a thing, we simply didn’t live that long. If you look at how many tens of thousands of years humans have been around, retirement is actually a fairly new concept. During the 19th and 20th century, retirement policies were implemented in industrialized nations as a consequence of economic development and longer lifespans. Let’s fast forward to the ‘90s: many consider the book ‘Your Money Your Life’ by Vicki Robin and Joe Dominguez to be the starting point of the FIRE movement. It gained a cult following since it made a lot of people question their relationship with money and time, as well as provide concrete advice on how to change it. From there FIRE slowly but surely gained momentum and blew up as blogs and podcasts spread the word. Popular names within the community include Mr Money Mustache, Grant Sabatier and Tanja Hester. They are all well known to their followers for showing the way to financial independence through books and blog posts.
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For people who are new to this idea, what should they know? - It’s eye-opening that if you save 10% of your pay you can take a year off every tenth year, if you save 25% you can take a year off every fourth year, and if you save 50% you can take every other year off. Combine this with the concept of compound interest and you will eventually be generating more income passively than you spend. However, to achieve this you have to understand money, and make financially rational decisions. In some ways, you need to operate more as a business than as a person. Maybe you're asking yourself how to achieve this after graduating as an average student? The key lies in saving a large chunk of your income, investing it and when it reaches a critical mass — let compound interest do the work. In
