• Kale

FIRE: The Beginners Field Guide

Everything new FI/RE members need to know from day 1.

Welcome to the jungle.

Whether you are here because you are absolutely fed up with your asshole boss or because you just heard about the FI/RE community, you have come to the right place.

I will provide much guidance in this piece, but before you go any further, go join the Financial Independence Retire Early Reddit forum (here). That forum is the home to us all and can provide excellent motivation/guidance/time-killing reading material.

Now, let's keep this simple and define exactly what FI/RE is (for the true beginners).

Financial Independence Retire Early is a global movement of individuals who want to accumulate exactly enough wealth to 1) never have to worry about earning more money for their basic living needs 2) want to tell their boss to go fuck off and 3) want to embrace life post-FIRE (including pursuing/continuing a job or hobby you are passionate about or simply sitting on a beach with the ones you love).

Once you've read that, you are probably thinking "why doesn't everyone do this?".

Well here's the kicker. It's pretty fucking hard (at first) to accumulate the wealth needed.

I've written tons of other blog posts on what the exact number is, but for the sake of this article, most can generally assume $700,000 would do the trick.

That amount would provide you with 20-40 years of income (via earnings + drawdowns) based on your lifestyle & is likely to get you to the social security/Medicare/retirement account no-penalty phase of US life.

An early recommendation: Avoid conversing about starting/chasing FIRE with about 99% of people. The uninitiated do not/will not ever understand and are on track to be broke as fuck forever (expect: smirks + "I'd love to do that but I just don't make enough/saving is too hard/math makes my head hurt). Stick with FIRE friends & your fam that cares.

Let's also address some of the earliest key points:

- If you make less than $20,000/year, saving may simply be impossible - circle back as your salary goes up

- Saving & investing are "hard" until you automate them entirely

- To FIRE, you will have to sacrifice

- FIRE doesn't happen overnight, it can take 10-20 years even if you are dedicated

- DEBT is a FIRE killer, you need to focus on paying any student debt/credit card debt off right away

- FIRE burn out is real - pace yourself and make sure you enjoy the ride

- FIRE members typically save 20-70% of their income (fact), but it starts with saving 5%

- FIRE doesn't have to be entirely about quitting your job (although it's one of the most fun parts)

Got it? Good.

The next step early on in the journey is tapping into the best books/audiobooks published for FIRE.

If you're like me, the library is your best friend, but Amazon works too.

Here are a few I'd recommend:

Your money or your life

I will teach you to be rich


These books are best paired with a weekly dosage of podcasts (if you're into podcasts). Here are the top options:

Stacking Benjamins

The Dave Ramsey Show

So you ordered the books and tuned into the podcasts.

Now it's time to review the admin ESSENTIALS.

  1. Open a better checking/savings account

  2. Set up auto transfer

  3. Open a brokerage account

  4. Set up auto transfer

  5. Fully match your employer retirement plan

  6. Adjust (if possible) all retirement plan selections to Roth

  7. Get a better credit card

  8. Compile the info for all of your debt

  9. Start shopping at Walmart/Aldi/Lidl

  10. "Rent-hack" (see if you can find a cheaper/value rental option when your lease is up)

Notice that "make a budget" is not on my admin item list.

Budgets suck and do not work. With this FIRE system, you will simply transfer over a specified amount of savings & investing each month and then spend away with whatever money you have left. Much, much, better.

Let's work through these one at a time:

Open a better checking/savings account

Let's keep this really simple.

Use NBKC for your checking account.

Use Froogal for your savings account.

Take the 20 minutes it takes to open both of these accounts, transfer the bare minimum you need in cash-on-hand to your checking (to cover rent & your credit card bill), and send the rest to the savings account.

Set up auto-transfer from each direct deposit to your savings account afterward. Start small ($100/month) and slowly increase the amount each month. This is how you get your savings rate up to 50%+.

These are the best options you have right now.

Open a brokerage account

Let's keep this one simple as well.

Robinhood or Vanguard.

Both have the total market index fund (mutual fund or ETFs) that you need.

Same deal as the savings account but possibly a bit less at first - set up an auto-transfer of $50/month into this account from your direct deposit.

Fully match your employer retirement plan

This is pretty simple.

Go into work tomorrow and email/ask your HR rep or manager and ask if they match retirement contributions (401k, 403b, etc).

If yes, have them adjust your contribution to MAXIMIZE how much your employer contributes. This varies by company, but typically your employer will match 50% of your contributions up to 6%.

This is free money. To this immediately if you have not done so already.

Adjust all retirement plans selections to Roth

Retirement account types are confusing.

So let me simplify.

The best retirement account for you - through your employer or set up individually - is a Roth IRA.

Money added to a Roth IRA is taxed on the way in, grows until your 62.5+, and can be withdrawn tax-free afterward.

Since you are likely to earn more over the years, this is likely the lowest tax rate you will have for quite some time (SO TAKE ADVANTAGE OF IT).

Get a better credit card

It's time to reevaluate what credit card you are using.

Depending on your credit score, I recommend using a credit card associated with your biggest monthly expense (aside from rent).

This is typically groceries so Amazon and Walmart are great options.

Both have 5% cash-back on purchases (amazing) and a decent 1-2% on other purchase items.

Compile the info for all your debt

This is incredibly important at the start of your FI/RE journey.

Make an Excel spreadsheet of every dollar of debt you have currently, the interest rate on each of the loans, and when the loans are due.

If the number is crazy, you are not alone.

To not let where you are at now stop who you will become tomorrow.

Now that you have a detailed list, make a note if any of the debt is forgivable (some student loans are). This is crucial.

Next, make a plan of attack - highest rate loans FIRST!

Froogal Club Loans are coming soon too which will help destroy these loans.

Start shopping at Walmart/Aldi/Lidl

This one may sound silly, but a ton of people are wasting thousands of dollars they could be saving/investing by shopping for the same products at the WRONG STORES.

Discount grocery vendors are crucial to your savings plan. Take advantage.

In tandem, limit your meals out. Yes, this includes happy hours.

Eat (drink) before and get an appetizer at the restaurant of choice.

Grocery pickup (offered at least by Walmart) can also save you a ton of time.

Rent "Hack"

I know, very millennial/Gen Z type recommendation.

But aside from food expenses (which have now been minimized by using Walmart), your next biggest monthly expense is housing.

Many people have not taken the time to explore other rental options in quite some time.

It is very possible that you could be living in a nicer place for less money right now.

Moving sucks - I completely agree. But you can rent a Uhaul for $75 a day to move locally.

So essentially if you can reduce your rent by anything more than $5, the move pays for itself.

More often than not you can reduce your rent by hundreds which translates into thousands every year.

Do yourself a favor and hop on Zillow this week and check out your options.

Do all of the above as quickly as you can.

Then circle back for the Field Guide Part 2.

Happy saving.

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