Speaker 1: The Fire Movement, what it is, and how to be
Speaker 1: a part of this very powerful financial movement, A biginners guide.
Speaker 1: Welcome back everyone to Sugar Mama's Fireplay. So today we're
Speaker 1: talking about one of my favorite topics when it comes
Speaker 1: to personal finance, and that is the Fire Movement. If
Speaker 1: you've ever dreamt of having financial independence, retiring early, and
Speaker 1: having freedom over your time, this is the perfect episode
Speaker 1: for you. But before you get too excited, let me
Speaker 1: be clear. Fire is not a get rich quick scheme.
Speaker 1: It requires patience, discipline, and a really strong commitment to
Speaker 1: a long term financial strategy. So in today's episode, I'm
Speaker 1: going to break down exactly what the Fire movement is
Speaker 1: all about, the benefits, the challenges that come with it,
Speaker 1: and most importantly, give you a step by step guide
Speaker 1: to follow so you can see for yourself how you
Speaker 1: can start working on your own financial independence. So relax,
Speaker 1: sit back, and let's talk about this very powerful, exciting
Speaker 1: movement that's changing people's lives forever. All right, First of all,
Speaker 1: let's kick off and just explain the basics the one
Speaker 1: io one of what Fire really is. So Fire stands
Speaker 1: for financial independence, retire really and the core principle behind
Speaker 1: it is very simple. It's about saving and investing aggressively now,
Speaker 1: earlier in life, so that you can build enough wealth,
Speaker 1: a great fat nest egg, to be able to quit
Speaker 1: your nine to five job and just live a life
Speaker 1: on your own terms. Now, traditionally, we most of us,
Speaker 1: have been told, and we've witnessed through our parents and
Speaker 1: perhaps our grandparents and great grandparents, that we work until
Speaker 1: we are sixty five in some cases seventy, and then
Speaker 1: when we retire, we live off our savings or superannuation,
Speaker 1: or sometimes a government pension. So the Fire movement completely
Speaker 1: challenges this, It turns it upside down, and it's about
Speaker 1: encouraging people to take control of their financial future far
Speaker 1: earlier in life, and actually, you know, not have to
Speaker 1: wait until you're in your sixties or seventies to actually
Speaker 1: enjoy the fruits of your hard work. Work hard now,
Speaker 1: go aggressively, and then retire early and actually be able
Speaker 1: to be young and fit and full of energy to
Speaker 1: enjoy all the fruits of that hard work, not delaying
Speaker 1: until later in life. Now, Fire isn't a one size
Speaker 1: fits all, which I think a lot of people assume
Speaker 1: when they first hear about it. There are different types
Speaker 1: of fire, which I'll explain in a moment, but some
Speaker 1: people really aim to retire extremely early. I've seen situations
Speaker 1: whe people that have retired in their thirties or forties,
Speaker 1: whilst others actually want to reach financial dependence so they
Speaker 1: can have I guess a greater flow or balance, like
Speaker 1: work less, take more holidays, or have like a passion
Speaker 1: project on the side without having to have that financial
Speaker 1: stress linger. So that's essentially what the fire movement is.
Speaker 1: It is about financial independence earlier in life. Now, why
Speaker 1: would you want to do this? Well, okay, there are
Speaker 1: a few reasons why someone want to pursue the fire movement,
Speaker 1: but here are just a few. The first one, obviously
Speaker 1: is freedom over your time. You no longer work by force,
Speaker 1: you work by choice. You have enough income to pay
Speaker 1: the bills, You can decide how you want to spend
Speaker 1: your time, whether you want to go to work today
Speaker 1: or whether you want to maybe go on holiday tomorrow.
Speaker 1: So it really brings back that choice and that freedom
Speaker 1: and that time and even a luxury back to the
Speaker 1: person who's controlling their fire. The second benefit to fire
Speaker 1: is obviously less stress about money. Financial independence means having
Speaker 1: enough money to cover your lifestyle without actually having to
Speaker 1: rely on earning a paycheck from somewhere else or by
Speaker 1: physically doing something. It's really about building passive income. Passive
Speaker 1: income is money that you earn whilst you sleep at night,
Speaker 1: so you completely eradicate that sort of pressure and stress
Speaker 1: to have to go to a job every day and
Speaker 1: show up and put a suit on, or stare at
Speaker 1: a computer screen, or work with people that you don't
Speaker 1: necessarily like. The other thing is it gives you more
Speaker 1: opportunities for personal growth. When you're not tied up to
Speaker 1: a full time job, you have obviously more time to
Speaker 1: explore those passions, those hobbies, travel, even start a business
Speaker 1: on the side. You have this choice with fire and
Speaker 1: then of course allows better work life balance. You may
Speaker 1: not necessarily want to completely retire and up shop, but
Speaker 1: instead you might want to maybe look at part time work,
Speaker 1: or look at doing some passion projects or even doing
Speaker 1: some volunteers. So it doesn't necessarily mean you completely quit
Speaker 1: the workforce, unless of course you want to. But you
Speaker 1: just have a complete flexibility. You might decide, okay, well
Speaker 1: I'm going to take a six month contract job, but
Speaker 1: then for the remainder of the six months of the year,
Speaker 1: I'm going to actually switch off, relax, do some courses,
Speaker 1: do some charity work, and of course travel so you
Speaker 1: have a greater sense of work life balance, and of
Speaker 1: course that closing improving your own health and fitness along
Speaker 1: the way. So now that we've spoken about the benefits
Speaker 1: of firelet it's actually talk about the negative side, the
Speaker 1: challenges of fire. Because there are challenges of fire. There
Speaker 1: is a reason why not everyone is part of the
Speaker 1: fire movement, and I'd say these are the key reasons
Speaker 1: why people get stuck or don't commit long term to
Speaker 1: see the results and all the beautiful benefits. So all right,
Speaker 1: the fire lifestyle is not really for everyone. It requires
Speaker 1: extreme discipline and patience. You have to be incredibly intentional
Speaker 1: about saving and also saving and investing, and for most
Speaker 1: people like myself as well, that includes cutting back, cutting
Speaker 1: back obviously on luxuries, but also cutting back on things
Speaker 1: that are sort of in between needs and wants. You've
Speaker 1: also got to be incredibly patient. The more financial freedom
Speaker 1: you want, the more passive income you want, the more
Speaker 1: time it's going to potentially take all the biggest sacrifices
Speaker 1: that are needed. So you need to understand that and
Speaker 1: make peace with that and accept that if that's what
Speaker 1: you want, you've got to build it. If it was
Speaker 1: that easy, everyone to be doing it. The other downside
Speaker 1: of the fire movement is the potential for burnout. And
Speaker 1: this is something again i've actually seen a lot of.
Speaker 1: So you know, initially people are full of motivation, which
Speaker 1: is fantastic, but three months in a year in some
Speaker 1: people have had to go to such extreme lengths, you know,
Speaker 1: juggling multiple jobs and saving you know, up to say,
Speaker 1: seventy percent of their income. This ends up being exhausting
Speaker 1: and when you're going at this aggressive pace, it is
Speaker 1: not sustainable. And the problem is when we're burnt out,
Speaker 1: a couple of things tend to flare up. We then
Speaker 1: have a blowout where we undo all our hard work.
Speaker 1: You see that often with people who've been trying to
Speaker 1: pay off debt aggressively and then they just something happens
Speaker 1: and they get a trigger and then they go and
Speaker 1: blow it all on new credit card debt, and you know,
Speaker 1: they're back to almost square one again. It's exactly the
Speaker 1: same with any strict diet where you've got to cut
Speaker 1: out huge amounts of your normal every day diet. You
Speaker 1: do it for a week or two, maybe three, and
Speaker 1: then you just something happens and you know, you overindulge
Speaker 1: in all of those things that you try to cut out.
Speaker 1: So you've got to be very careful of having a
Speaker 1: finger on the pulse with burnout. And I'll come and
Speaker 1: talk about that in a second. The other downside of fire,
Speaker 1: and this is a really big one that no one
Speaker 1: talks about enough, and that is inflation and market risk.
Speaker 1: So the thing with the fire community, it's not based
Speaker 1: on necessarily just savings, no cash accounts. If you want
Speaker 1: long term financial freedom, you've got to be investing. And
Speaker 1: typically for a long term financial freedom independence has got
Speaker 1: to have a certain amount of risk involved, which typically
Speaker 1: falls into the the property market and equities. So the
Speaker 1: investment portfolio you're building and creating that passive income has
Speaker 1: got to last for decades. And if you're dealing with
Speaker 1: these types of assets like for example, shares and property,
Speaker 1: these are assets such are naturally and it's very normal
Speaker 1: to be very volatile. They have downturns, and those downturns
Speaker 1: can be dramatic and can really create an emotional reaction
Speaker 1: in a negative way that then triggers a knee jerk
Speaker 1: reaction that often comes with a regret. So you need
Speaker 1: to understand what the risk versus reward equation is, where
Speaker 1: it fits with you, where your risk profile is, and
Speaker 1: you invest accordingly, and you're also ready to weather the
Speaker 1: storm when those market downturns hit. The other important element
Speaker 1: of this is the rising costs. So this is where
Speaker 1: a lot of people who've thought they set themselves up
Speaker 1: for a lifetime of fire actually sadly and unfortunately, and
Speaker 1: I don't say this to patronize them, but they've basically
Speaker 1: had to go back to work because the rising cost
Speaker 1: of living and the recent impact of inflation has really
Speaker 1: eroded into their strategy. Now this doesn't mean it's completely
Speaker 1: you know, you can't avoid this from it. You need
Speaker 1: to understand the impact of inflation, the impact of rising costs,
Speaker 1: and make sure that your portfolio and your financial strategy
Speaker 1: prepares for this in a proactive way and you know
Speaker 1: how to navigate it if you hit certain boundaries where
Speaker 1: you see your investment portfolio being hit with volatility and
Speaker 1: of course the rising cost of living. This is why
Speaker 1: it's so important to make sure you build enough passive income,
Speaker 1: ideally a little bit more passive income than what you need,
Speaker 1: so that you never eat into the capital and you
Speaker 1: never force into a situation where you have to crystallize
Speaker 1: losses and sell things because your passive income no longer
Speaker 1: covers your cost of living because of inflation. So always
Speaker 1: obviously keep that in mind. But you need to prepare
Speaker 1: for this and have safety nets in place. And of
Speaker 1: course a lot of people don't realize if you set
Speaker 1: yourself up for financial independence retirement early earlier in life,
Speaker 1: sand your thirties, you need to also keep into consideration
Speaker 1: your natural lifestyle evolving. I know one person in particular
Speaker 1: who created successful fire strategy in their late twenties early thirties.
Speaker 1: Everything was going great. They had so much freedom, so
Speaker 1: much time, so much choice, so much travel. And then
Speaker 1: they met someone and they decided to have a family,
Speaker 1: and seeing what their cost of living changed you with
Speaker 1: children with childcare, with having to have a bigger home
Speaker 1: with more bedrooms, that person had to return back to work.
Speaker 1: Of course, they didn't have to return back at the
Speaker 1: same pace that their friends were to keep up with
Speaker 1: the living expenses, but their fire strategy wasn't able to
Speaker 1: evolve with them. Not that that's necessarily a bad thing
Speaker 1: at all. I don't think so. I think it's an
Speaker 1: exciting thing and great to be able to back in
Speaker 1: the workforce and using your brain. But you need to
Speaker 1: keep that in mind. How much flexibility do you need
Speaker 1: for financial independence? How much do you want and you
Speaker 1: will things like retiring, maybe having a healthcare scare, maybe
Speaker 1: wanting to live in a different country where there are
Speaker 1: different tax rates and different cost of living. How is
Speaker 1: your financial fire strategy going to evolve with you and
Speaker 1: your needs? Think about these things if you want a
Speaker 1: really robust one. And then the fourth downside i'd say
Speaker 1: of the fire movement is social challenges. Not everyone is
Speaker 1: on board with the fire movement. Again, again, if everyone,
Speaker 1: whiles everyone be doing this, there are going to be
Speaker 1: family and friends who may not necessarily understand your choices.
Speaker 1: If they see you being incredibly frugal with your spending,
Speaker 1: they see you aggressively saving every penny, They see you
Speaker 1: investing every dollar and maybe taking risks with it comes
Speaker 1: to investing that they wouldn't necessarily take themselves. You may
Speaker 1: find it a confronting experience and it can at times
Speaker 1: feel isolating. However, whilst these people may not understand what
Speaker 1: you're doing or may judge you even or think that
Speaker 1: you're missing out on amazing opportunities in life, such as
Speaker 1: travel or those spontaneous that ativities like going to a
Speaker 1: concert and all those wonderful things, you also need to
Speaker 1: know that you actually have a lot of power within
Speaker 1: you to inspire those people who may be judging you
Speaker 1: or maybe criticizing your personal financial decisions in life. So
Speaker 1: understand that it goes both ways, but it definitely can
Speaker 1: be isolating, particularly if you're having to say no, I
Speaker 1: can't come to dinner, or no I can't go to
Speaker 1: that concert, or no, I can't go on a holiday
Speaker 1: this year. It can feel incredibly lonely. But again, turning
Speaker 1: to a community online is a great opportunity to help
Speaker 1: find that support and also obviously that motivation to keep going.
Speaker 1: And I say, for someone who's been investing for a
Speaker 1: very very long time, not just as a financial planner
Speaker 1: but myself personally, and if you can push through these
Speaker 1: particular challenges or downsides, the rewards are most definitely worth it.
Speaker 1: I never have regretted investing, all right, So let's move
Speaker 1: on now. To a step by step guide as to
Speaker 1: how to do fire for yourself. Now, this is the
Speaker 1: one step that I think a lot of people miss
Speaker 1: because they just are so motivated and decided to get started,
Speaker 1: and if they haven't done this, when they hit challenges,
Speaker 1: this is where things can start to go wrong. So
Speaker 1: in best time, please and listening to step one and
Speaker 1: doing something about this. So this all starts with your mindset.
Speaker 1: So the first step is understanding fire is a marathon,
Speaker 1: not a sprint. There are going to be moments of frustration, disappointment, sacrifice,
Speaker 1: and even boredom, and you are going to be it's
Speaker 1: like watching paint dry when you're watching your investment portfolio grow.
Speaker 1: But if you can stay committed, dedicated, keep showing up,
Speaker 1: this is essential and your future self will most definitely
Speaker 1: thank you. So what I would recommend for you is
Speaker 1: to do a list, a list of at least ten
Speaker 1: points as to why you want to do this for yourself,
Speaker 1: so that your mindset shift happens and you understand what
Speaker 1: you are doing and why, so that when those setbacks
Speaker 1: and challenges happen, you are strong, you are resilient. Yes,
Speaker 1: they may get you down for a day or two.
Speaker 1: But once the clouds pass, you're back on it and
Speaker 1: you hit the ground running again because you know your why.
Speaker 1: So bullet point, why do you want financial freedom and independence?
Speaker 1: Perhaps it's something really deep and personal. You want to
Speaker 1: break the pattern you maybe grew up in poverty or
Speaker 1: grew up in a financially volatile environment. You want to
Speaker 1: create consistency, You want to create stability, you want to
Speaker 1: create peace of mind. Also, you might think, well, I
Speaker 1: really am passionate about helping people. This is going to
Speaker 1: help me. Having financial freedom and independence is going to
Speaker 1: allow me to give back. It's going to give me
Speaker 1: more time for my children. It's going to allow me
Speaker 1: to afford to educate my children or educate my grandchildren.
Speaker 1: Least at least ten important points to you as to
Speaker 1: why this is important to you and what your true
Speaker 1: why is really about, and go as deep as you
Speaker 1: possibly can. The more you write down, you'll be surprised
Speaker 1: how much more flows, and how much more was lingering
Speaker 1: around in your heatheart and soul that you now actually
Speaker 1: understand about yourself. It's quite beautiful experience, So please do
Speaker 1: this mindset work. Step number two is to know what
Speaker 1: type of fire you want so before you start, you've
Speaker 1: got to get clear, crystal clear. There are various versions
Speaker 1: of fire, so you need to work out which one
Speaker 1: actually resonates with you. So here are just a few
Speaker 1: to consider. Number one is the lean fire movement. So
Speaker 1: this means living off a minimal budget, literally living off
Speaker 1: the scent of an oily rag, and you aggressively save
Speaker 1: and invest absolutely everything in order to be able to
Speaker 1: retire as soon as possible. Now I should point out
Speaker 1: with the lean fire strategy, yes you are living in
Speaker 1: a very lean way, but you're also creating a very
Speaker 1: lean fire strategy because you're trying to retire as soon
Speaker 1: as possible. You may have actually not given that passive
Speaker 1: income a love time to flourish and grow and compound
Speaker 1: to give you a comfortable fire strategy. So yes, it
Speaker 1: means living lean today, but also potentially living lean tomorrow
Speaker 1: as well. Not necessarily a bad thing, but for people
Speaker 1: who are happy to live on a very type budget,
Speaker 1: they like that that fits in they're with their lifestyle.
Speaker 1: This is potentially the path to choose because obviously it
Speaker 1: means they can retire earlier, but they're also be able
Speaker 1: to maintain that type budget for the rest of their lives.
Speaker 1: The second one is the fat fire movement. So this
Speaker 1: means of course saving and investing aggressively, but you're doing
Speaker 1: it more to retire with a higher standard living, so
Speaker 1: it's sort of one up from the lean fire strategy.
Speaker 1: You are trying to build more passive income so that
Speaker 1: you have greater freedom, greater choice, more time, more luxury.
Speaker 1: This is probably one of the ones which I probably
Speaker 1: recommend and probably resonate with. Then of course there is
Speaker 1: the coast fire strategy. So this is reaching a point
Speaker 1: where your investments grow on their own and allow you
Speaker 1: to slow down without having to stress about additional savings,
Speaker 1: so you are in on a regular basis. It's not
Speaker 1: necessarily as aggressive from a time point of view, but
Speaker 1: you are being consistent over a longer period of time,
Speaker 1: and you are focusing on the power of pounding interest
Speaker 1: where you can get to that sweet spot where that
Speaker 1: passive income now grows on its own. It's being reinvested,
Speaker 1: and you can obviously take some of that income if
Speaker 1: you don't want to reinvest it with it adding value
Speaker 1: to your life and never involves tapping into the actual
Speaker 1: capital or eating into your savings. So the Coast fire
Speaker 1: strategy is very much focused and it has a strong
Speaker 1: bias towards long term growing passive income for that freedom.
Speaker 1: Then there is the Barista fire, and I think this
Speaker 1: is one that I think is a really healthy one
Speaker 1: that I think is really achievable, and I think would
Speaker 1: fit into a lot of people's lifestyles, particularly you know,
Speaker 1: people who are having a family. So this is enough
Speaker 1: having enough financial freedom in order to be able to
Speaker 1: cover most of your living expenses. But you still need
Speaker 1: to work, but maybe on a part time basis or
Speaker 1: on a sort of a contracting basis, so you still
Speaker 1: have your finger on the pulse. You're still getting experience
Speaker 1: in the workforce, you're still adding value to the world.
Speaker 1: You're still acts of service and doing all those important
Speaker 1: things you might have like a business that you work
Speaker 1: on part time, or you might have a part time job,
Speaker 1: or you're doing contracting work. But your living expenses are
Speaker 1: also supplemented by that passive income or that investment portfolio
Speaker 1: that you have built over time. So the last three
Speaker 1: ones I think are I think the most healthy. You know,
Speaker 1: I'm coming from someone with twenty two years experience in
Speaker 1: financial planning. They allow their realistic. I feel they allow
Speaker 1: the best of both worlds. They allow you to keep
Speaker 1: using your brain, keep making sure that you have your
Speaker 1: skills there, you know, adding value to the world. But
Speaker 1: also it understands that your life is changing and evolving
Speaker 1: and you're still building up that passive income. You can
Speaker 1: still have that, particularly with a burist one, to earn
Speaker 1: extra money that you continue to contribute towards your investment portfolio.
Speaker 1: So you need to spend time exploring which one resonates
Speaker 1: with you the most, and which one you decide that
Speaker 1: you want to jump on and be as part of
Speaker 1: your own financial strategy. And of course you can. You
Speaker 1: don't have to pick one to stick to it over time.
Speaker 1: You might want you to go start with a lean one,
Speaker 1: the lean fire movement, and then move towards, say the
Speaker 1: coast fire movement. It's completely up to you. But understand
Speaker 1: the different different categories and which one resonates with you
Speaker 1: the most. You don't necessarily into pigeonhole yourself. Then step
Speaker 1: number three, and this is the most important one we
Speaker 1: must all do if we want to do this, that
Speaker 1: is to start start investing. Start investing as soon as possible,
Speaker 1: but invest consistently. So the key to fire is making
Speaker 1: your money work for you. That is passive income, and
Speaker 1: this means investing in assets that generate passive income such
Speaker 1: as tibot ends, rant earning interest. So these types of
Speaker 1: assets to create that passive income are stocks, they are ETFs,
Speaker 1: listed investment companies, investment properties, and of course high DAN
Speaker 1: savings accounts or even bonds for security. So you really
Speaker 1: need to focus on the assets that will provide few
Speaker 1: long term sustainable growth and sustainable passive income through cash
Speaker 1: flow so that you don't actually have to actively rely
Speaker 1: on yourself to actually earn and make money. But I
Speaker 1: will say this, if you want long term growing, sustainable
Speaker 1: financial freedom and independence, you've got to be looking at
Speaker 1: two dimensional assets. Now I've spoken about this and lots
Speaker 1: of other podcasts, so if you want to learn more,
Speaker 1: definitely go listen to my episodes on investing in listen
Speaker 1: investment companies, investing in shares, investing in property. But essentially,
Speaker 1: a two dimensional asset is an asset that grows in value.
Speaker 1: So you know, a stock that grows from say ten
Speaker 1: dollars to eleven dollars, but it also creates an income
Speaker 1: stream and that income stream grows with the capital growth,
Speaker 1: so that ten dollars stock may pay, for example, fifty
Speaker 1: cents for the one year the stock goes up for
Speaker 1: simplistic terms, to eleven dollars. Next year, that passive income,
Speaker 1: that dividend is now fifty five cents. See how you've
Speaker 1: got two sets of growth happening. You've got growth in
Speaker 1: the passive income, the dividend income, and you've got growth
Speaker 1: in the capital value. Now, of course, yes, shares, property,
Speaker 1: these two dimension types of two dimensional assets are volatile,
Speaker 1: and they are long term investments. They're not selling you'd
Speaker 1: invested in for say two years, five years, or even
Speaker 1: I think seven years. They are long term growth. But
Speaker 1: my point is you want your passive income to be
Speaker 1: growing organically. You want that passive income obviously to be
Speaker 1: in reinvested, which helps it grow, but you want to
Speaker 1: have that element of two dimensional passive income growth. That
Speaker 1: will then mean with your passive income that you live off,
Speaker 1: it can help keep up with inflation, or even better,
Speaker 1: it exceeds inflation, so that you always earn more passive
Speaker 1: income than what you want. And that is what I
Speaker 1: would actually call the Rolls Royce fire strategy, which is mine.
Speaker 1: Now I will talk about this at the very end
Speaker 1: of the episode my own financial strategy, the Rolls Royce
Speaker 1: one that I'm ultimately working towards, and if you like,
Speaker 1: I will do a separate episode, but you need to
Speaker 1: let me know if you actually want that. But I
Speaker 1: want to continue on with the steps as to one
Speaker 1: on one on the fire strategy. So step number four,
Speaker 1: if you want to do this, is you've got to
Speaker 1: increase your income. Now, as I mentioned, we need to invest.
Speaker 1: So how do we start investing if we don't have
Speaker 1: any money to invest? And this is why I say
Speaker 1: step four, You've got to increase your income. Whilst savings
Speaker 1: is obviously crucial for everyone's financial well being to a
Speaker 1: certain degree, you've got to earn more so you can
Speaker 1: accelerate your fire journey. That is, earn more money so
Speaker 1: you can invest more. So we need to think outside
Speaker 1: of the squares to what additional things you can boost
Speaker 1: your income. So things like starting up a side hustle,
Speaker 1: doing some freelancing or consulting work, asking for a pay
Speaker 1: rise or a promotion, or applying for a new job,
Speaker 1: up skilling, investing in yourself, doing some additional training, and
Speaker 1: you may be a deployment or a graduate diployment, or
Speaker 1: even looking into a master's to increase your earning potential.
Speaker 1: The more income you can earn, the more money you
Speaker 1: can then funnel into investments, which means you're going to
Speaker 1: reach financial independence so much sooner. But I will point
Speaker 1: this out to come back to one of the downsides
Speaker 1: of risks. I touched on the concept of burnout, which
Speaker 1: is what a lot of people have done in their
Speaker 1: financial strategy when they've gone to aggressively too quickly. If
Speaker 1: you want to do something like this, take on a
Speaker 1: side huse le, do freelancing, take on an extra job,
Speaker 1: work a weekend, you invest in your skills, do a
Speaker 1: master's an NBA. You need to understand you've got to
Speaker 1: look after your energy. Do these things if you can,
Speaker 1: imburst in spurts and the moment your body says all right,
Speaker 1: I'm exhausted, I'm tired, I need a break, listen to
Speaker 1: it and take that break. You never want to get
Speaker 1: to a point where you completely burn yourself out that
Speaker 1: you can't actually then enjoy your financial freedom and independence.
Speaker 1: You're burnt your run down, and this is when we
Speaker 1: become sick. And also when we're tired and run down,
Speaker 1: we're not concentrating, and this is when accidents happen. So
Speaker 1: you really got to be in tune with your body,
Speaker 1: in tune with what your body needs. When you have
Speaker 1: the you're in the optimal zone and you are happy
Speaker 1: to do those extra hours, work that weekend shift, take
Speaker 1: on that new risk with your business, that's great. Do
Speaker 1: those then, But the moment you feel some pullbacks and push,
Speaker 1: some signs that you're not well. You are starting to
Speaker 1: be tied, you're sleep deprived, you're not regulating your emotions
Speaker 1: like you normally would, that is your sign to slow
Speaker 1: down and give yourself a break. And that's why I
Speaker 1: like to apply the principle of burst and spurts to
Speaker 1: my financial strategy, my fire strategy, so that when I
Speaker 1: need to, I listen to my body and go all right,
Speaker 1: I've gone hard. I've like declutted a whole part of
Speaker 1: stuff and sold it. I need a break. I need
Speaker 1: to catch my breath, I need to reset, I need
Speaker 1: to recharge, and that's when I'll just be quiet. It
Speaker 1: doesn't mean I got and spend a lot of money
Speaker 1: and under all the hard work. It just means I
Speaker 1: lay low for a bit, go under the radar and
Speaker 1: just sit. Let my investments stay as they are, don't
Speaker 1: touch them, let my savings stay there. I don't touch them,
Speaker 1: but I listen to my body, and I try to
Speaker 1: refuel my body in a really kind way that doesn't
Speaker 1: involve money. Things like going to bed early, having a
Speaker 1: warm bath, jumping in the ocean, spending time with nature, disconnecting,
Speaker 1: doing a digital detox for a weekend. All those little
Speaker 1: things that helped me get my energy levels back, my
Speaker 1: focus back, and reconnect with my wife, as I talked
Speaker 1: about in step one, that mindset. And then step number
Speaker 1: five your emergency money. As we have spoken about in
Speaker 1: many episodes, life can be incredibly unpredictable and the last
Speaker 1: thing you ever want to be is forced into position
Speaker 1: where you have to sell your investments because you didn't
Speaker 1: have enough emergency money or we didn't have any emergency money.
Speaker 1: You must have a separate, dedicated savings account purely for
Speaker 1: emergency and yes, if you have a mortgage, the redrawer
Speaker 1: or offset account is fine as long as it's a
Speaker 1: dedicated account purely for emergency money. Now, there is no
Speaker 1: Madam formula for how much emergency money you need. Even
Speaker 1: though I have recently seen people recommend three to twelve
Speaker 1: months worth of living expenses, you need your own definition
Speaker 1: of financial security when it comes to emergency money. I know,
Speaker 1: for our family, when we had seventy thousand dollars worth
Speaker 1: of expenses come up, and actually we had more than
Speaker 1: seventy thousand dollars, it wiped all of our emergency money
Speaker 1: because we only had seventy saved up. So that was
Speaker 1: a big wake up call for me to realize and
Speaker 1: reassess that as a family of five, Tom and I
Speaker 1: both work for ourselves, so we don't have no super guarantee,
Speaker 1: and we don't have annually or sick leave or long
Speaker 1: service leave. We needed more, and our emergency money I
Speaker 1: worked out to be was actually in excess of one
Speaker 1: hundred thousand dollars. Whereas someone who is young has no
Speaker 1: financial responsibilities, you know does has maybe a lot of
Speaker 1: annual leaves saved up, has lots of sick leaves saved up.
Speaker 1: You may not necessarily need one hundred thousand dollars. You
Speaker 1: may only need twenty thousand dollars or twenty five thousand dollars,
Speaker 1: But sit down and work out how much emergency money
Speaker 1: you need. And if you ever want to learn about
Speaker 1: this in more detail, mindful Money, I have a chapter
Speaker 1: dedicated to show you how to work out how much
Speaker 1: emergency money you need. But promise me this that emergency
Speaker 1: money is separate from your living expense account. It is
Speaker 1: separate from your holiday savings account, it is separate from
Speaker 1: your investing account. It is purely for your emergency money.
Speaker 1: Trust me on that you never want to just have
Speaker 1: to sell everything up because you didn't plan and prepare
Speaker 1: for an emergency. Nobody is immune from emergencies, and no
Speaker 1: one is completely resilient and protected from emergencies. And no
Speaker 1: one has ever said to me, geez, I wish I
Speaker 1: didn't have so much money in emergency money. Okay, And
Speaker 1: then step number six, the final step, track your progress
Speaker 1: and adjust so reaching financial dependence and retiring early. It's
Speaker 1: a long term game plan. It is not going to
Speaker 1: happen overnight. It might happen overnight, but it's highly unlikely
Speaker 1: unless you win the lottery. But for this reason, it
Speaker 1: is so important that you track your savings, you track
Speaker 1: your investments, you track your growing passive income, and of
Speaker 1: course you track your living expenses. You've got to understand
Speaker 1: what you are doing and what is working and what
Speaker 1: is not working, and in that review process, make those
Speaker 1: tweaks and changes and adjustments. Look at what you need
Speaker 1: to cut down, what is creeping up, what is getting
Speaker 1: out of control, What is a potential challenge, what is
Speaker 1: a potential risk. What investments are generating the best and
Speaker 1: most passive income for you is their ability to maybe
Speaker 1: to invest more in those assets so that you can
Speaker 1: achieve your goals sooner. You also need to track the
Speaker 1: progress for pure motivation. When you actually see that this
Speaker 1: is working, you now have your first thousand dollars a
Speaker 1: year in passive income, it is a really powerful moment
Speaker 1: because it is your sign that you are doing the
Speaker 1: right work and to keep going. And next time you
Speaker 1: come back and you look at that progress. Now you
Speaker 1: earn fifteen hundred dollars a year in passive income. You
Speaker 1: can get excited. You can see that there is light
Speaker 1: at the end of the tunnel. This is working. All
Speaker 1: those sacrifices, its hard work, that commitment, the dedication is
Speaker 1: paying off. Your life is looking very different. Your future
Speaker 1: is exciting. Your future is filled with financial harmony and
Speaker 1: freedom and luxury and time and choice. That is going
Speaker 1: to be your key source of motivation for when tough
Speaker 1: times happen, when those setbacks happen, when those challenges happen,
Speaker 1: because you can come back and see how far you've
Speaker 1: come in a very short period of time, and that
Speaker 1: will allow you to give you the faith and confidence
Speaker 1: to get back on the bandwagon. Sure, you might feel sad,
Speaker 1: you may feel frustrated, but you will go back to
Speaker 1: this game plan because you know it's worked, it pays off.
Speaker 1: So there you have it, the beginner's Guide to the
Speaker 1: Fire movement. Whilst it definitely does take discipline at a
Speaker 1: shitload of patients, the ultimate reward at the end of
Speaker 1: the day is freedom. Freedom for you and I know
Speaker 1: for myself, freedom is priceless. Now, as mentioned, I call
Speaker 1: my own fire strategy Roles Voice strategy. It is something
Speaker 1: that I am working towards actively. Every day, I'm reviewing,
Speaker 1: I'm tracking and adjusting and tweaking my strategy. I have
Speaker 1: my emergency money or building along the way bubbling away
Speaker 1: and I am constantly saving, reviewing my budget and investing.
Speaker 1: So if you would like me to make a special
Speaker 1: episode where I share with you what my rolls. Royce
Speaker 1: Fire strategy is please leave me a rating review and
Speaker 1: say canna, please share with us your roles Royce Fire
Speaker 1: strategy because when I see those reviews and hopefully you
Speaker 1: give me a good rating, I pray I will then
Speaker 1: make sure that I make that as a priority for you,
Speaker 1: because I listen to what you say, I listen to
Speaker 1: what you want, and I always try and deliver it
Speaker 1: to the best of my ability for you, because I'm
Speaker 1: serious about helping you guide you, motivate you, and inspire
Speaker 1: you to take better decisions with your money. Now, if
Speaker 1: you enjoyed today's episode, I would love it if you
Speaker 1: can make sure you are following this show, Sugar Mams
Speaker 1: Fireplay so you never miss episode. It goes live everyone
Speaker 1: Monday morning at five am, so that you start you'll
Speaker 1: week off on an inspired and motivated note. And of course,
Speaker 1: if you're enjoying listening to this channel, I'd love to
Speaker 1: hear from you. I'd love to hear about what you
Speaker 1: want to hear more of. I'd love to hear what
Speaker 1: particular episodes you really loved, and even episodes that you
Speaker 1: didn't actually like. I appreciate your feedback. I promise you
Speaker 1: I will take it on constructively and yes, I promise
Speaker 1: you I will listen wholeheartedly. So please send me a message,
Speaker 1: maybe on Instagram or of course, as you said, you
Speaker 1: can leave me a rating review and leave your feedback there.
Speaker 1: Now until next time, stay focused, stay patient, and keep
Speaker 1: working towards your own financial freedom and as always, keep
Speaker 1: that financial fire burning right with him. This is Sugar
Speaker 1: Moments fireplay