Financial Independence Retire Early

What is FIRE?

It’s a thought that encourages you to save and invest aggressively which eventually helps you achieve financial independence and the option to Retire Early

Do you enjoy your

current life?

• Spacious and Lavish Home
• Exotic Vacations
• Experiential Dining
• Latest Gadget
• Luxurious Assets

If Yes

Then you need to rethink about FIRE

WHY?

Because F.I.R.E. is achieved for a Different Purpose and has a very different pathway

A Reference

Check

• Can you control Lifestyle Upgradation (Lifestyle Inflation)?
• Can you practice Delayed Gratification?
• Can you ignore Social Expectations?
• Can you stop Impulsive Consumerism?
• Are you comfortable with the Fear of Missing Out (FOMO)?
• Can you Pay-off your Debts shortly and Not Acquire More?
• Do you have Bad Financial Habits?

Why do you want to

achieve FIRE?

• Pursue Your Passion
• Financial Security
• Work-Life Balance
• Flexibility & Autonomy
• Improved Mental Health

When and How do you want to

retire?

Retire Early with a Simple Life

Lean FIRE - Focuses on extreme frugality, allowing you to retire with a minimal budget. This approach requires significant lifestyle adjustments but enables quicker retirement

Retire at a Comfortable Age with a Substantial Corpus

Fat FIRE - Involves saving and investing more to maintain a comfortable standard of living post-retirement. While it takes longer to achieve, it offers greater financial flexibility.

Retire Early but prepared to work part-time

Barista FIRE - Allows individuals to leave full-time employment while taking on part-time or freelance work to cover some expenses, blending partial retirement with income-generating activities.

What does it take to

attain FIRE?

• Extreme Saving
• Limited Spending
• Aggressive Investing
• Rapid Income Growth

What are the things to consider when

planning for FIRE?

• Food - Dining out and grocery bills
• Utility Payments - Payments towards utilities and facilities
• Healthcare Cost - Health expenses tend to increase as age progresses
• Unforeseen Expenses - Unforeseen expenses like a life threatening disease or disaster could impact the corpus accumulated
• Transportation - Work-related commuting costs may decrease, but leisure travel expenses might increase
• Leisure Activities - Many early retirees dream of indulging in travel, entertainment, and hobbies, which need to be factored in the estimated budget

How much would you

need to save?

The F.I.R.E. number (Basic Calculation) = Current expense X 25

Example
Mr. Aryan desires to attain the F.I.R.E. movement at age 45. His annual expense is ₹12 Lac.

Corpus required = Annual Expense X 25--> 12 Lacs X 25--> = 3 Cr. Corpus

How much would you

need to save?

The F.I.R.E. number (Multiple factor consideration)

Example

Mr. Aryan is 25yrs and desires to achieve fire at 45yrs and assuming to live till 85 yrs. His current expenses per month are ₹1 lakh.

Value of 1 lakh after 20 yrs at 5% inflation = 2.65 Lakh

Total corpus required for 40 yrs of post retirement life = 7.76 Cr.

Monthly SIP amount required to achieve the retirement corpus = 72,168

The above calculation is for illustration purpose only and does not in any manner indicate performance of any scheme or index. Past performance may or may not be sustain in future. inflation is calculated at 5% while Tax is not considered in the calculation.

The above illustration is calculated at 12.62% and 7.85% assuming the investment is made in the Sensex and Crisil composite bond index. The return is basis a 10 year rolling return mean from 1/06/2014 to 31/05/2024.

What can you learn from the

FIRE Movement?

• Start dreaming and planning for retirement
• Find ways to keep your expenses low
• Look for ways to boost your income
• Make saving and investing a priority

Things to keep in Mind if the

Plan Fails

• You may have to go back to working
• You will be older than today
• You will need to start the accumulation phase again

Food For Thought

The journey of a thousand miles begins with one step.

~ Lao Tzu

FIRE does not mandate early retirement but instead makes working optional. But it is possible only when you gain control over your financial life.

Disclaimer

An Investor Education & Awareness Initiative by Mirae Asset Mutual Fund.

Views expressed here cannot be construed to be a decision to invest. The statements contained herein are based on current views and involve known and unknown risks and uncertainties. Whilst Mirae Asset Investment Managers (India) Private Limited (the AMC) shall have no responsibility/liability whatso- ever for the accuracy or any use or reliance thereof of such information. The AMC, its associate or sponsors or group companies, its Directors or employees accepts no liability for any loss or damage of any kind resulting out of the use of this content. The recipient(s) before acting on any information herein should make his/her/their own investigation and seek appropriate professional advice and shall alone be fully responsible / liable for any decision taken on the basis of information contained herein. Any reliance on the accuracy or use of such information shall be done only after consultation to the financial consultant to understand the specific legal, tax or financial implications All Mutual Fund investors have to go through a one-time KYC (Know Your Customer) process. Investors should deal only with Registered Mutual Funds (RMF). For further information on KYC, RMFs and procedure to lodge a complaint in case of any grievance, you may refer the Knowledge Center section available on the website of Mirae Asset Mutual Fund

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