How Close Are You to Getting FIRE-d?

Published: December 10, 2020 | Updated: December 17, 2020 | Posted by: Ricky Publico | Personal Finance


fire method of retirement

Excuse my clever pun. I’m not talking about the hot fire or the unemployed kind of fire. Instead, I’m talking about the kind of fire that’s so good, it had to be an acronym. That’s right, how close are you to getting FIRE-d? That’s a question you should be asking yourself because the FIRE method of retirement is something you should consider aspiring.

What is FIRE Movement?

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Before we answer the burning question, let’s first define what the FIRE method of retirement is. FIRE means Financial Independence/Retire Early and it involves retiring in your late 30s or early 40’s instead of the traditional retirement age at around 60. It started gaining traction in 1992[1] and since then, millennials have subscribed to the idea of retiring early.

There are many ways to get started with the FIRE movement, but it usually involves saving a lot and growing your money to a huge amount that you won’t need a job to sustain your lifestyle. It sounds like a pipe dream, but it’s entirely doable as long as you put your mind to it. Retire early and follow your passion without anything holding you back. That’s the FIRE-d life.

So at this point in your life, do you have the right mindset to start the FIRE method of retirement next year? Find out how financially ready you are in this short FIRE quiz that’s totally lit, yo.

Read more: Retirement Fund 101: Plan, Save and Invest for Early Retirement

Are You Ready to Get FIRE-d? Answer Truthfully!

fire method of retirement

1. Here’s one that hits close to home. You’ve finally received your 13th month pay! What’s your initial plan on how to spend it?

a. Immediately add it to my savings account and investment funds. Savvy!
b. Immediately add it to my home renovation and repairs. Nice!
c. Immediately add it to your travel fund for next year. Sayonara!
d. Immediately add the latest iPhone to your online cart. Ka-ching!

2. Your friends invited you to a COVID-safe get-together this weekend. What will be your response?

a. “I can’t. I have to finish some side projects for next week. Have fun though!”
b. “I can’t. I don’t have a budget for a get-together. Maybe next time?”
c. “As long as I’m not paying, I’m going! Where’s the party?”
d. “Just tell me when, where, and I’ll pay for all your drinks!”

3. Exchange gift time! What kind of gift are you expecting from your special someone (just pretend you have one)?

a. Cash! I’d rather choose my own gift or save the money instead.
b. My SO and I would probably agree to a spending limit.
c. My SO and I would just shop together and treat it as bonding time.
d. I’ll send my wishlist and have my SO shop for it immediately.

4. Another fun part of the holidays is the noche buena. How do you prepare this year’s festive meal with your loved ones?

a. From shopping for ingredients to cooking them, I budget and manage everything.
b. I delegate tasks to the rest of my family, but I usually spearhead everything.
c. I bond with my family by preparing everything together a day before.
d. I contribute by ordering from Instagram and other food delivery services.

5. And once the vaccine reaches the country, what are you most excited about for your new-found freedom from the pandemic?

a. I can finally open another bank account and attend financial seminars!
b. I can finally shop for new furniture and other home appliances!
c. I can finally go out and fulfill my travel plans from 2020!
d. I can finally attend concerts and enjoy the nightlife scene again!

Read more:

FIRE Method of Retirement Quiz Results

fire method of retirement

Mostly A’s. You’re all FIRE-d up! You have the mindset of someone who is determined to take control of your retirement and that’s good. Keep saving up and keep working on growing your money. In ten years time, you’ll be ready to enjoy the money you’ve worked so hard to earn. Just don’t forget to treat yourself a little once in a while.

Mostly B’s. You’re close to getting FIRE-d, but not quite. That’s okay! You probably have other obligations to attend to other than working on your retirement. As long as you’re responsible when it comes to spending your money, you’ll be back on track in your FIRE method of retirement journey in no time.

Mostly C’s. You’re on your way to getting FIRE-d, but you have a long way to go. That’s okay, too! You’re always free to prioritize whatever and whenever you want. Just remember to hit the perfect balance between spending for your wants and saving for your needs.

Mostly D’s. You’re far from getting FIRE-d, which can be a bad thing. If you’re not interested in retiring early, at least save some money for the near future. Don’t just spend all your money now on wants and worry about your needs later. Financial irresponsibility can take its toll before you know it. It’s never too late to do a 180 and start getting your act together.

Final Thoughts

Want to enjoy your earnings at an early age? Then you should consider joining the FIRE movement. As long as you have a money-savvy state of mind, working towards the FIRE method of retirement will be a breeze. Let this short quiz serve as a wakeup call. Who knows, maybe getting FIRE-d will kickstart the life you’ve always wanted to live.

This article also appeared in The Manila Times.

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Source: [1] Financial Independence, Retire Early (Investopedia, 2020)