Frugality, austerity and investment to live for years of income without having to work to pay the bills. This is what is proposed by the retirees young and followers of the movement FIRE , which originated in the united States and that responds to the terms "financial independence, early retirement". The fans of this style of life they promote to save half of the revenues and devote them to investment in order to reach financial freedom. In this way, retirees, young people manage to survive on the income generated and maintain a simple lifestyle without great expense for many years.
as he explains in his blog the financial planner and president of charles Schwab Foundation, Carrie Schwab-Pomerantz, this current is born with the aim of achieving a philosophy of life based on personal values than on material possessions with the ultimate goal of retiring at an early age that will allow them to pursue what they like the most instead of having to get up early every morning to sign in at the office . The three basic rules, as summarized Schwab-Pomerantz, are the following: avoid debt unnecessary, prioritize the savings and spend under the possibilities of each one.
In essence, if one wants to make reality the dream of early retirement, you must bet "for getting the most out of every dollar". "In comparison with the common goal of saving between 10 and 20% of revenue, for example, the adherents of the movement, FIRE advocate, save 50%," notes Schwab-Pomerantz. To calculate the money that would be necessary in the face of an early withdrawal, should think about how much money we would need in the first year without working and multiply that by 25 , adds this expert.
"I spent years without going on a paid vacation, summering in the village. And I still have a car in property" (Esmeralda Gomez, author of "Your key to financial freedom")
In Spain, the senior data scientist at BBVA and author of "Your key to financial freedom" (grupo Planeta), Esmeralda Gomez, defends that also it is possible to retire before the age of 50 with discipline and multiplying the sources of passive income . "It is not as important starting point, but the plot plan for the long term. I started from scratch. The important thing is to grow in all senses: to grow as a person so that our environment and heritage can grow in line and be balanced, otherwise, the estate of the person will fall apart or be adjusted to the level that you can assume that the person who manages it," explains Gomez-.
in order To achieve the final goal, Gomez recommended to increase the percentage allocated to savings as time passes and income increases and the experience . "The strategy to follow in the early years is to allocate savings and investment 30% of our income. Until we accumulate some savings, there is that to allocate more to saving and then starting from a point, to invest. But then, the higher the percentage destined to invest and save, the shorter the journey to retirement. The last year, I I put the 60% of income to savings and investment ". adds.
Esmeralda Gomez - ABC
"there is Not a clear stance, there are people that focus more on the savings, others that focus more on the generation of passive income high, and other in both options. What defines all persons that are part of the movement is that have a own criteria of thinking , otherwise, you could never get to belong to a movement for the minority not spread in the society," says the author of "Your key to financial freedom".
In keeping with the style of life of the adherents to the movement FIRE, Gomez advised austerity. "I spent years without going on a paid vacation, summering in the village. And I still have a car on property. I take and pick up my child on scooter. In contrast, I've already made several master's and invest in housing. Life is the sum of small choices", sums up.
The method of the preahorro
Also there are also mixed methods that do not opt for full retirement, but in order to save money to achieve years of financial freedom. Here is the strategy of the preahorro defended by Luis Pita, author of the book "Ten worst car that your neighbor" and who says that if today to leave your job, you could keep your current expenses over 14 years. In this sense, Pita urges to "live below our means", to devote so automárica to the investment 20% of our salary, to look for a good financial advisor and not to incur any debt, except the mortgage to afford the housing."passive income have a great advantage. Although they require an initial investment of time or money, then do not require your work" (Luis Pita, author of "Ten worst car that your neighbor")
in Addition, Luis Pita encouraged to generate passive income to supplement the monthly salary and that can be achieved through rental of dwellings, stock dividends, rights or "royalty" and the automated sale of products. "Passive income have a great advantage. Although they require an initial investment of time or money, then do not require your work. That's why we generate an enormous amount of financial freedom," noted Pita.Updated Date: 16 September 2019, 04:00