What it Takes to FIRE

[firewhen]

Probably have seen lists like this before, but here's another and feel free to add to or disagree:

Decent income (but doesn't need to be outlandish)
Growing up in a middle class household, perhaps even where money was tight (not absolute but creates a mindset)
If married, spouse thinks similarly (and don't get divorced)
Certainly helps to have a pension
Willing to invest (stock market or real estate) but don't chase the latest sure thing of the moment
Be satisfied with life and not needing material things
Not caring what the neighbors are buying/doing
Enjoy saving/watching the nest egg grow
Stable lifestyle (no fancy cars or crashing cars or keep moving)
Spend what you need, not what you make
Can visualize what life would be like outside the 9 to 5 routine

[CaseInPoint]

It's important to mention that the above list will provide a certain type of frugal retirement. Nothing wrong with it, but while many people are willing to live that way, many others would not.

To FIRE with a much better lifestyle, I would start the list with things like:

- earning much more money than the average America for many years,

- saving much more than the average American for many years, and

- waiting until you have much more investable assets than the average American.

When your annual expenses amount to 2-4% of your total investable assets, you're ready to FIRE. The exact number depends on whether you're going to retire in your 40s, 50s or 60s (if you can consider retiring in your 60s as ER at all).

[Marquette]

What it takes to retire well:

Spend less than you net. Save the difference.

What it takes to FIRE:

The above plus a better percentage, a bull market, or time (start young). Having all three helps.

I think your list is good too ;-)

[NW-Bound]

Originally Posted by firewhen

Probably have seen lists like this before, but here's another and feel free to add to or disagree:

Decent income (but doesn't need to be outlandish)
Growing up in a middle class household, perhaps even where money was tight (not absolute but creates a mindset)
If married, spouse thinks similarly (and don't get divorced)
Certainly helps to have a pension
Willing to invest (stock market or real estate) but don't chase the latest sure thing of the moment
Be satisfied with life and not needing material things
Not caring what the neighbors are buying/doing
Enjoy saving/watching the nest egg grow
Stable lifestyle (no fancy cars or crashing cars or keep moving)
Spend what you need, not what you make
Can visualize what life would be like outside the 9 to 5 routine

The list fits me, except for the pension thing !

May I add "Be your own grease monkey"?

Just kidding.

[kombat]

I tend to think of there being 2 lists: one of mandatory factors that you must have in order to retire comfortably, and a second list of factors that all contribute to FIRE, but you don't necessarily need them all. The more factors from the second list that apply to you, the sooner you can FIRE (or the higher your standard of living if your FIRE date is fixed). For example, I think the following are the mandatory factors you need in order to ever retire at all:

• Live below your means, save the difference, at least 10% of your net.

That's it. If you do that, you'll eventually be able to retire. It may not be glamorous, it may not be "early," but you'll eventually get there, even if you know nothing else about money and investing. The following list are all factors I think can accelerate your arrival:

• Live in the smallest house you're comfortable in.
• Don't have kids.
• Don't get addicted to always driving brand new, fancy cars.
• Develop a good knowledge of investing, understand why "fees matter."
• Work at a job with a pension plan.

My wife and I are totally ignoring the first item, and we don't have any company pensions, but we've stuck to all the rest. If we downsized our home, we could certainly retire sooner and/or better, but this way, we get to live in a huge, nice house while we're waiting.

[CaseInPoint]

Originally Posted by kombat

I tend to think of there being 2 lists: one of mandatory factors that you must have in order to retire comfortably, and a second list of factors that all contribute to FIRE, but you don't necessarily need them all. The more factors from the second list that apply to you, the sooner you can FIRE (or the higher your standard of living if your FIRE date is fixed).

Right on, kombat.

[Finance Dave]

Originally Posted by firewhen

Probably have seen lists like this before, but here's another and feel free to add to or disagree:

Decent income (but doesn't need to be outlandish)
Growing up in a middle class household, perhaps even where money was tight (not absolute but creates a mindset)
If married, spouse thinks similarly (and don't get divorced)
Certainly helps to have a pension
Willing to invest (stock market or real estate) but don't chase the latest sure thing of the moment
Be satisfied with life and not needing material things
Not caring what the neighbors are buying/doing
Enjoy saving/watching the nest egg grow
Stable lifestyle (no fancy cars or crashing cars or keep moving)
Spend what you need, not what you make
Can visualize what life would be like outside the 9 to 5 routine

I agree with all you've written...and here's a few more:
* Start saving for retirement early (I started at age 18)
* Do an "income needs" assessment (I've seen several studies that show those who have tried to see what it takes are more successful at meeting their goals)
* Protect yourself - this is a generic statement, and can include everything from having good insurance (umbrella policy for those with high net worth) to not doing drugs, watching your weight, managing diseases, and wearing your seatbelt.

[NW-Bound]

Originally Posted by Finance Dave

* Protect yourself - this is a generic statement, and can include everything from having good insurance (umbrella policy for those with high net worth) to not doing drugs, watching your weight, managing diseases, and wearing your seatbelt.

Yes, the umbrella policy. It costs me a few hundred bucks/year (my wife keeps track of that), and it frees my mind of some worries.

[SecondCor521]

It's obviously really a YMMV item, but receiving an inheritance or two doesn't hurt.

2Cor521