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FIRE Up our personal finance journey. Just do not forget property.

F.I.R.E is a very famous term for personal finance journey which I guess all personal finance writers would write about. It says Financial Independence and Retire Early. (FIRE) Personal finance journey is meanwhile an even larger topic and is usually very different for everyone.

By the way Financial Independence and Debt free are two different things. The former says we do not need to worry about money. It could also mean we can stop holding full time jobs for example. The latter says we have no debts. It does not say anything else about our financial status. Now, let’s talk about Financial Independence.

personal finance journey
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Lots of money. Does Financial Independence means we have a lot of money? A lot more than what we could finish spending? Probably that may happen if we have super wealthy parents. Or our idea got billions of fundings and we earn millions in salaries. Then again, even that is not certain if we read about all the news about the lifetime savings of some older folks being squandered away within years by their kids. Or how some startups eventually fail.

Reduce expenses tremendously. Or financial independence simply meant the ability to manage our expenses so that it is way below what we earn, no matter how much or how little we have. I think this is a more appropriate way of thinking about it. As this is a kopiandproperty.com newsletter, I need to remind all personal finance writers again that SAVING MONEY by renting versus buying does not cut it because when your income stops,your rental does not… So yes, reducing expenses also sometimes meant that we need to actually invest today. 

In brief, Financial Independence means the amount of money we need is BELOW the amount of money we have. Let’s aim for this yeah. It usually does not happen unless we work on it actively to start making the money flow in passively…

Now, let’s talk about Retire Early. Do we need to retire early? Find something we like and keep doing it passionately. if we love what we do, why retire? Now, this has got nothing to do with senior citizens still having to clean tables or wash plates in some food courts just because they claim they are still healthy. Just be objective about it. No one loves cleaning tables after someone has eaten and dropped gravy on the table and washing dirty plates?

Stay REAL. So, let’s aspire to build up enough wealth which could last us until they day we say bye bye to this wonderful world. Oh yeah, My wish? One day when I am financially independent, I wish to lecture in a university in my hometown (Ipoh) and my salaries, I will donate 100% of it to a charity of my choice but it has to be based on my schedule availability and a subject I love. If I retire early, then that’s what I will do. What about you?  

So, this is the reality everyone. It’s way beyond just managing expenses by not buying that expensive handphone and settling for a cheaper one instead… way beyond just savings extra RM58 from downgrading the broadband package and then telling the world I saved so much… way beyond just trying to have another income stream.  All these are great to do but one thing all F.I.R.E writers must put into their consideration is property.

Statistically? If room rental remains the same, then it’s RM500 x 12 months x 25 years = RM150,000. This is just the rental of one room and not other expenses. If you really understand, then you will have to realise that property will always be that biggest expense. This is why it is COMPULSORY. Happy reading kopiandproperty.com and do share to more personal finance writers who may need to also have a property related strategy too. Cheers. 

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Next suggested article: ALWAYS in this order. Salary – Savings – Invest. Which stage are you?

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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