It’s an equation that seemed insoluble. Without a job, no money, but with a job, no time to enjoy life. However, some have just found a way to split their fortunes by working hard for 10 to 20 years, only to retire at just 40 years old. This technique even has a name: the FIRE method.
The retirement age is still the subject of heated debate between workers and their government. However, some have decided not to leave it to politicians to make this decision for them.
They want to retire at age 30 or 40, following the principles of the FIRE method to achieve this. But should you let yourself be tempted?
A revolution from the United States
In the USA as in France, few people can imagine retiring before the age of 60. And across the Atlantic as in Europe, few workers can boast of having a job that is both fulfilling and flexible, enough to give them the impression of watching life go by without really having the opportunity to enjoy it.
But this pattern of life is no longer inevitable. Because in the United States, a revolutionary method has just been popularized. Her name? The FIRE technique, for Financial Independence & Retire Early. It would therefore allow you to retire at 30 for the luckiest and 40 for the others.
The principle is simple. We worked hard for around ten years before starting our reconversion by living on annuities thanks to the money saved. Because to be able to afford this dream, you will first have to make big savings. And that will require sacrifices.
The 4 principles of this technique
To be able to stop working in our forties, we will need to follow four simple principles. The first is save. The FIRE method is based above all on limiting expenses. Because the greater our financial needs, the longer we will have to work to raise enough money. And time is what we no longer want to waste.
The second principle, set a tight budget not to exceed. We will therefore have to eliminate the superfluous and concentrate on the essential. Some fans of this method manage to put up to 70% of their income aside every month. An extreme lifestyle that sometimes requires returning to live with your parents…
The third principle, plan a budget for your retirement. The project designers estimate that we can stop working at 25 times the total annual expenses saved. Get your calculators on!
The fourth and final principle, make your money grow. You must therefore invest to receive a small annual income. Stocks, real estate investments, investments, and the savings made must in turn generate money.
Should you let yourself be tempted?
If this method makes tempting promises, we must keep in mind that it only works for one category of people: those who have a comfortable salary and can therefore generate significant savings every month. Moreover, nothing says that it will keep its promises. For example, what to do in the event of a bad investment? Finally, if the prospect of retiring at 40 is tempting, we fear the previous 15 to 20 years which seem to be quite simply sacrificed… Is the game worth the candle?
Although we must therefore remain cautious, there is still reason to draw inspiration from this technique. Understanding that every time we buy a product, we pay for it with our money but also with our time, the time we spend working, should help us review our consumption habits.
